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Archive for the ‘economic justice’ Category

Over the past few decades and especially since the onset of  the “Great Recession,” city, county, and state governments around the country have had to cope with increasingly dire budget deficits. The go-to solution for many policy makers has been to make large funding cuts to programs that address poverty and inequality.

While this may help balance some budgets in the short term, recent reports find that not addressing poverty and inequality, especially child poverty, ends up costing billions more in the long term.

In 2007 the Center for American Progress released The Economic Costs of Poverty in the United States: Subsequent Effects of Children Growing Up Poor. In it they found:

Most arguments for reducing poverty in the U.S., especially among children, rest on a moral case for doing so—one that emphasizes the unfairness of child poverty, and how it runs counter to our national creed of equal opportunity for all.

But there is also an economic case for reducing child poverty. When children grow up in poverty, they are somewhat more likely than non-poor children to have low earnings as adults, which in turn reflects lower workforce productivity. They are also somewhat more likely to engage in crime (though that’s not the case for the vast majority) and to have poor health later in life. Their reduced productive activity generates a direct loss of goods and services to the U.S. economy.

What’s more, crime often imposes large monetary costs to the taxpayer, costs associated with administering our huge criminal justice system. And their poor health generates illness and early mortality which not only require large healthcare expenditures, but also will  impede productivity and ultimately reduce their quality and quantity of life.

How much does childhood poverty end up costing the country?

The Center for American Progress’ report results suggest that the costs associated with childhood poverty  to the U.S. total about $500B per year, or the equivalent of nearly 4 percent of GDP.

In 2008 the Human Services Policy Center at the University of Washington released The Cost of Child Poverty State by State which broke down those costs by state.

The annual cost of New York’s 888,000 children growing up in poverty?

$33.4 billion.

Thanks to the New York State Community Action Association’s recently released 2010 New York State Poverty Report we can break that down by county.

The annual cost of Erie County’s 39,528 children growing up in poverty?

$1.51 billion.

This begs the question:

When running government like a business, does it not make sense to invest in ending poverty?

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Developer Mark Croce will be receiving a $1.35 million hand-out from New York State tax payers to turn a vacant downtown building into an “upscale boutique hotel at Franklin and West Huron streets.” Croce is “convinced there’s a market for an upscale boutique hotel that offers larger rooms with some unique amenities.”

This handout is coming in the form of a Restore NY grant which is intended to “stabilize neighborhoods and revitalize urban areas.”

Which neighborhood is being stabilized here?

Who will benefit from this kind of urban revitalization? The “upscale” market Croce is convinced is out there–we’ll say those households making more than $150,000/year–accounts for about 3% of households in Buffalo.

In other words, $1.35 million of public money will be used to provide a tiny part of the community with presidential suites, pent-houses, and “unique amenities.”

This is money that could be used to stabilize or revitalize the neighborhoods of the 30.3% of people living in poverty in Buffalo, still the third poorest city in the country. This money could even be used to provide basic housing to the hundreds of individuals and families that are homeless on any given day in Buffalo.

Instead this public money will be used to help a wealthy developer provide upscale hotel suites for wealthy travelers and community members.

The County is also looking to tear down buildings in downtown Buffalo. In an effort to avoid being held responsible to Constitutional standards for jails and prisons, the county wants to build a new multimillion dollar county lockup downtown.

Hotels for the wealthy, expensive jails for the rest of us.

Is this how the people of Buffalo and Erie County want their money spent?

Does this benefit the whole or even very much of the community?

Or does it continue to subsidize wealthy developers and their clients while a third of the city lives in poverty?

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GreenJobsForum-6

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We just got this message from our friends at PUSH:

We need volunteers!

One of PUSH’s national partners, National People’s Action, is bringing the Federal Reserve to Buffalo!

With millions of regular people caught in the grip of foreclosures, ballooning mortgages and predatory loans the Fed is traveling to cities hard-hit by the economic crisis to hear about the urgent need of reform and PUSH wants everyone there!

We need boots on the ground and people on the phones to get the turnout we need at this meeting. If you think you can canvass or phone-bank with us beginning on Monday, June 29th through July 15th, please give us a call at 716-884-0356 or shoot me an email, harrison@pushbuffalo.org

If you’d like to canvass, please show up to the office at 4 and if you’re interested in phone-banking, show up at 5.

The neighborhood needs to turn out to meet the Fed because we need access to credit, banks that invest in our communities, and green jobs that pay us a living wage! Real People have Real Power! Again, please lend us a hand canvassing or phone-banking, we would love to see you.

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The Subprime Crisis has helped force thousands of Americans into homelessness and it is hugely important that the Fed steps in to reform.  The National Coalition for the Homeless recently released  a report that details the effects of the Subprime Crisis on homelessness:

Foreclosure to Homelessness 2009: the Forgotten Victims of the Subprime Crisis

We need you to help bring people out to tell the Fed how the Subprime Crisis has affected people in Buffalo.  Volunteer to canvass or phonebank and try to bring anyone you know who has been affected by predatory lending.  The meeting is:

July 16th, 6pm
Trinity Episcopal Church
371 Delaware Ave, Buffalo

They’ll be here soon so it’s time to get moving!

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One of the main purposes of the Poverty Challenge is to dispel myths and stereotypes about homeless and low-income people and shift our attention to the economic and social inequalities that create and perpetuate the grinding poverty in Buffalo.  A dominant message in our society is that poor people are to blame for their poverty.  That they make bad choices and do not try hard enough to get out of poverty.  Hopefully by taking the Challenge, people will be able to see how difficult it is to live in poverty, let alone move out of poverty with out any outside assistance.

Where do we focus if we shift our attention away from poor people being the cause of their own poverty?  One place that we can focus on is the very intimidating and complex issue of economic inequality.  Obviously there are a number of different sources of economic inequality and it is impossible to separate complex social inequalities from these already complex economic inequalities.

But in his second Poverty Challenge blog Aaron Bartley, of PUSH, touches on one source of economic inequality that has been a major part of Buffalo’s long term economic bottoming out:

Today’s General Motors bankruptcy is symbolic to me of the millions of industrial jobs lost in this country over the last forty years, and all the pain and suffering that continues to cause Buffalonians and others.

A recent Buffalo News article also reported the bankruptcy and what this means for GM workers in WNY.  In “Layoffs slated at GM’s Tonawanda plant”, Matt Glynn reports that the General Motors Corp. engine plant in the Town of Tonawanda will likely face layoffs of up to 261 workers.  Layoffs at this plant are not new; in 1989 the plant employed 4,350 people, in 2003 the plant employed 2,003 people, and after this latest round of layoffs the number could go down to 610 workers.

These were jobs that, through the efforts of local unions, had good wages and benefits.  The kind of jobs that helped build the modern American middle class and kept thousands of local families living comfortably with relatively secure futures.

The loss of these jobs has forced thousands of workers into unemployment and as other industries left the area, local workers were left with few options for employment.  Many of the jobs left in the Buffalo area for high school graduates (which is the highest level of education many people can complete because of financial restrictions among other reasons) are low paying, benefit-less, service sector jobs that are often times part-time.

As Bartley pointed out, the GM’s bankruptcy is symbolic.  It means the loss of even more of what’s left of the well-paying jobs that employed thousands during Buffalo’s heyday.  As made clear through the Challenge, losing income (through both unemployment and the replacement of good paying jobs with very low paying jobs) means not being able to eat and pay the bills; it means that one will be forced into poverty.

Economic changes and inequalities like the layoffs at GM plants are a large part of what has made Buffalo the third poorest city in America.  Policy and action in the area must take into considertaion the loss of  well-paying jobs like the ones that GM offered and strive to create more well-paying jobs.

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According to a recent Buffalo News article the New York Power Authority is working on a deal with Yahoo!, the Internet giant, to bring them into WNY.  The speculated deal would include giving Yahoo! power discounts totaling $101.2 million over the next 15 years.  The plant Yahoo! is planning to build would create 125 jobs, which means that New York Power Authority would be spending $809,940 over the course of the contract for every job created.

A couple of quotes from the article about the potential deal:

  • Referring to the amount being spent on each new job, “‘It’s exceptionally high, even for high-tech,’ said Greg LeRoy, a national expert on economic development subsidy programs.”
  • “‘There are a few other deals we’ve seen over the years in that neighborhood, but it’s stratospheric. It doesn’t have much company,’ said LeRoy, executive director of Good Jobs First, a nonprofit research and advocacy group based in Washington, D.C.”
  • “‘On a number basis,’ said Power Authority President Richard Kessel, ‘this doesn’t look like the greatest deal in the world, but we can’t look at the numbers alone.'”

Power Authority President Richard Kessel is correct; we can’t just look at the numbers.  We also have to look at what kinds of jobs these are and where they will be located. As far as location, Yahoo! is looking at building its plant in rural areas like Cambria, Lockport or Pembroke.  What kinds of jobs will these be?  An interviewee in the article described these jobs as “high-tech”.  This means they are sure to require at least a bachelor’s degree or some training.

A quick look at the NFTA’s website shows no public transportation to Cambria or Pembroke from Buffalo and no morning bus runs to Lockport from Buffalo. There also does not appear to be any scholarship or training programs for interested but unqualified workers associated with the deal. There will basically be no way for a low-income individual living in Buffalo to get a job at this potential plant if they do not have all the required qualifications and even if they do have the right qualifications, there will be no way for them to get to the job if they do not own a car, which is impossible for most low-income people.

If the deal goes through, this publicly subsidized plant will not create living wage jobs for the 1/3 of Buffalo that lives in poverty.  This is not to say that communities like Cambria, Lockport, and Pembroke don’t need these jobs but could that $101.2 million do more good for more people in our community if it were given to a company that agreed to locate close to the areas that need the jobs most?  To companies that will train some of the city’s thousands of unemployed workers?

If the city, county, or state ever hopes to end poverty and homelessness in Buffalo, it must make poverty its most important focus.  In deals like the one being hashed out with Yahoo!, our administrators and elected officials must ask themselves if huge deals like these will create good jobs close to the communities that need the jobs most.  Looking at the Poverty Challenge Budget it becomes clear that one of the major things that keeps people in poverty is their low-income.  Many of the jobs that are available in the city are service sector jobs that pay very little, are often part-time, and offer few if any benefits.  If the majority of jobs in a community pay poverty-level wages, then the majority of people in that community will stay in poverty.

Another aspect of the Poverty Challenge Budget that is sure to keep people in poverty is transportation.  Using private transportation (or owning a car) will automatically blow your budget and put you into debt.  But most of the decent paying jobs are outside the city, in places where there is little or no viable public transportation.  The job that may help you get out of poverty is then out of reach becasue you can’t afford the transportation to get there and you have to settle for the minimum wage jobs in your neighborhood (which are harder than ever to find becasue of the current recession).

You could go down the list of items and expenses in the Poverty Challenge Budget starting with the low-income (due to the lack of jobs or the existence of only low paying jobs in your community), the high cost of rent/utilities, the cost of transportation, the cost of cell phones (very necessary for prospective employers to call you back) and see all the expenses that keep 1/3 of Buffalo in poverty.  If our public officials ignore the poverty level budget and don’t address the need for living wage jobs, affordable rent, affordable transportation, etc. then thousands of people in Buffalo will continue to be impoverished.

The Yahoo! deal is another decision being made by public officials that does not have ending poverty as a  primary concern or even as any concern at all.  Deals that will create the kinds of jobs that will allow people to get out of poverty must be the ones we consider first if we have any desire to end poverty in Buffalo.  The $101.2 million deal with Yahoo! is a deal that is being created without any concern for the thousands of impoverished people in our community. (more…)

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That may seem like a ridiculous question.  Part of the reason I came to Buffalo was because I thought it was probably the most affordable place to live in the state*.  But the Center for Housing Policy‘s recently released report entitled Paycheck to Paycheck serves to remind us that for many working people, owning a home or even renting a 1BR apartment in Buffalo is unaffordable.

The report compares the wages of 60 occupations with the wages necessary to afford the cost of an average home ($100,000 including all associated costs) or the Fair Market Rent for a one-bedroom or two-bedroom apartment in different states and metropolitan areas.  Housing  is usually considered affordable if it amounts to 30% of your budget.  For example, CHP calculates the income needed for a one-bedroom apartment by multiplying the Fair Market Rent for a one bedroom apartment by 3, which would roughly give you the income needed for that month to afford the apartment.  That monthly number is then multiplied by 12 to get the yearly income necessray.

The report found that while the wage necessary to afford a home decreased (much of that having to do with declining home prices) the wages for many occupations, construction-related occupations in particular, still are not high enough to afford a home and in severe cases a two-bedroom apartment.  Fair Market Rents continued to increase in most areas, which is very troubling given the big increases in unemployment and that renting is usually the more affordable option for low-income people.

The homeownerhsip and rental information for Buffalo, a town that most people consider a very cheap place to live, is also very troubling.  Fair Market Rent for a two-bedroom apartment increased from $704 in 2008 to $723 in 2009, a 2.7% increase.  Even more disturbing are the number of service sector wages that are not high enough to afford a one or two bedroom apartment, let alone a home.

Consider these graphs which show the income needed to afford a home, one bedroom, or two bedroom apartment in Buffalo along with the incomes of a selection of service sector occupations (which represents a large portion of the employment available in Buffalo):

Annual Income Needed to Afford a Home

homeownership 1

Other occupations that did not earh enough to afford a home included: hairdresser, home health aide, housekeeper, janitor, laundry worker, nursing aid, office clerk, packager, parking lot attendant, receptionist, retail salesperson, school bus driver, security guard, stock clerk, stock mover, telemarketer, and wait staff.

(more…)

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