Income inequality—shrinking

As government transfer payments to low-income households exploded in the last 50 years, their labor-force participation collapsed and the percentage of income in the bottom quintile coming from government payments rose above 90%.   WSJ Incredible Shrinking Income Inequality – WSJ

"Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo." – Joe Biden, May 22, 2020

Of course, that doesn't tell the whole story. An increase in the federal corporate tax rate to 28 percent as proposed would raise the U.S. federal-state combined tax rate to 32.34 percent, highest in the OECD and among Group of Seven (G7) countries, harming U.S. economic competitiveness and increasing the cost of investment in America. When businesses are taxed more they either move to another country or raise our prices. So who is Biden kidding?

Few people could get elected promising to raise your taxes, but Biden isn't few people. He's just Barack Obama 2.0.

Is Booker buying votes?

"Sen. Cory Booker (D.-N.J.) is proposing a plan—the American Opportunity Accounts Act—that he calculates will provide $46,215 to every 18-year-old in the lowest income bracket by giving them annual subsidies in a federally managed savings account."

This ought to qualify Booker as a Presidential candidate buying votes.

If they are truly low income, and qualify for federal and state benefits, like SNAP, EITC, Section 8, Medicaid, TANF, negative income tax, home energy assistance, school lunch, breakfast and snack, going all the way back to Head Start, SSI, child care, grants and loans for college or trade school, plus about 100 other transfers, $46,000 would probably be a reduction.

Is a college degree a good ROI?

One of the reasons Columbia University can claim that poverty among young children was at 45% during the Obama years is that pesky threshold the academics and bureaucrats say is needed to support a family. Let's say you've dumped the kids' deadbeat dad, finished college and gone on for your dream degree--a Master's in Library Science (today the degree title may use the word information or technology, but you know what I mean). You've got debt, but everyone says a college degree is the ticket to the middle class. $32-$35,000 isn't terrific, but not unusual for a beginning MLS degree in a small city, and it varies state to state, but so does the poverty threshold. Probably the para-professionals in the library who've been working 20 years earn more, but you'll have that pride of possession and benefits that far exceed the private sector. According to our government, that salary is low income, and you'll need at least $50,000 in a medium sized Ohio city to climb out of that category. 

The largest number of children in low income households are white, but the highest percentage are minority (36% white; 29% Asian; 69% black). The fact sheet I'm reading (Basic Facts about Low-Income Children: Children under 3 Years, 2015) does mention education and jobs to climb out of the low income category, but ignores marriage.

If you try to work the internet on ROI for a college degree, you get--guess what--articles written by academics urging you to take on a 4 year college cost of $140,000.  And why not?  They need to keep those seats filled in college xyz.

More have slipped into lower income group under Obama

At the county level we've lost a lot of ground under Obama. "Based on poverty rate estimates for all 3,141 counties for all ages, 26 percent (820 counties) had a statistically significant increase in poverty between 2007 (the year before the most recent recession) and 2014. Only 1 percent of counties had a statistically significant decrease in poverty during that period."

The recession was "over" in June 2009, yet the middle class has lost out and some have slipped downward. Finger wagging (Obama), criticizing the GOP (Hillary) and creating additional expensive government programs (Bernie) won't take the place of sound economic policies.

http://www.census.gov/did/www/saipe/data/highlights/files/2014highlights.pdf

Why do Democrats talk about the gap instead of life style?

Facebook sent me a memo about what I wrote on November 1, 2014.

"This is why the Democrats have to talk about a gap rather than quality of life and consumption.

The typical poor household, AS DEFINED BY THE U.S. GOVERNMENT, has ...

• a car and air conditioning, two color televisions, cable or satellite TV, a DVD player, and a VCR.
• If there are children, especially boys, the family has a game system, such as an Xbox or PlayStation.
• In the kitchen, the household has a refrigerator, an oven and stove, and a microwave.
• Other household conveniences include a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker.
• The home of the typical poor family is in good repair and is not overcrowded.
• The typical average poor American has more living space in his home than the average (non-poor) European has.
• By its own report, the typical poor family was not hungry, was able to obtain medical care when needed, and had sufficient funds during the past year to meet all essential needs."

The immigrants who come here probably know this; the media and politicians don't seem to.

Notice what is soaring?  College tuition and fees, not health care. Government is heavily involved in college loans.

Unequal childhoods and unequal adulthoods

https://www.youtube.com/watch?v=2xq_iCMgP2Q

It will take about an hour to watch this lecture by Annette Lareau as she follows up her original research (early 2000s) on children in middle class and working class families, with how they did as young adults. I’d noticed in stores how differently some parents talk to their children (who may be in the shopping cart).  Although these days, they may be talking on the phone!  Often I wish they’d just shut up.  My goodness, they talk and talk and talk.  But some don’t.  Low income parents talk much less to their children, and by the time kids get to school there is an enormous gap in vocabulary.  But her research goes a lot deeper—about how middle class families “untie knots,” research ways to do things better, get the better school, or teacher, or activity. They have different social networks, they marry different people, and live in different neighborhoods which have different schools.

It’s worth watching.  But I don’t buy any government solution for this which we’ll hear from the academics.   The common complaint will increasingly be “white privilege,” but Lareau found similar attitudes in black and white families who are in the same socio-economic class. Fathers are more likely to be present in the middle class families; parents have more education; more sibling rivalry in middle class families; more talking; more boredom among middle class kids; and middle class kids stay “younger” longer with fewer responsibilities.  Race was not as big an issue as values and attitudes. Many middle class teaching approaches are the opposite of what works with low income kids. Drilling and memorization work well for them—just not for the teachers. Immigrant parents seem to have stronger academic standards for their children which may be lost by the 3rd generation.

There are 79 means tested programs for the poor and low income

Lumped together they loosely comprise “welfare” in the jargon of the people, but that means jobs for government workers.

There are 79 means tested programs to help the poor and low income and about 49% of that is medical and most goes to children, disabled and elderly. Only 8% for able bodied, working age adults. So good luck at cutting anything. It's about $19,000 for EACH American counted as "poor" by the Census. About 6% of the budget is for those "welfare" type programs, and 4.8 % of GDP for social security (Medicare is going to pass SS in 2040). We've all paid into Social Security, Medicare, and worker’s compensation, so many people don't like the word "entitlement" for those, even though we are entitled to them through our contributions. http://www.heritage.org/.../examining-the-means-tested...

What if Obama stops smoking?

And millions of others? Health care costs will increase. Yes, smokers die younger and will not require all that expensive care in their old-old years. That sounds crass, but if you ever ran the numbers on all this "healthy" eating, exercise, and no-smoking stuff, you'd find wonderful reasons to be healthy, but saving the government money isn't one of them. But also, if they stop smoking, we'll have to find other ways to pay for all the SCHIP "children" (who are adults) who don't need government health care.

On Feb. 4, President Obama signed legislation that reauthorizes and expands the State Children's Health Insurance Program (SCHIP). Earlier in the day, the House — on a 290-135 vote — passed the Senate version of the SCHIP legislation that expands insurance to an additional 4 million children. The new law also gives SCHIP an additional $35 billion over the next five years. The extra $35 billion in costs would be funded by a 62-cent-per-pack increase in the federal tax on cigarettes and other tobacco products. The new law removes a restriction that prevented states from enrolling middle-class children without first proving that nearly all poor children had been enrolled. Some states found it difficult to meet that criterion. Former President Bush twice vetoed similar legislation. AIS Health

Since more low-income and poor people than rich people smoke, this is an additional tax on the poor. Raising the tax doesn't cause them to stop--it just takes their discretionary money from another pot--like groceries. Another example of taxing the poor to help the middle class.

"The release of a scant one-page summary for 21 years of care brought some criticism to the Obama campaign – especially when compared to the thousands of pages of medical records released by McCain. Obama promised reporters that if there are additional health-related questions, his campaign would make that information available. “In terms of additional records, if there are particular things that people have questions about, then we’d be happy to give that information,” he said." ABC News

If you were poor or low income

sitting on the edge of the bottom quintile, hoping to move up a notch, which would you prefer:

1. a job in an Ohio coal mine in Appalachia at $25/hour, or a job at an interstate McDonald's at $8/hour serving the people from Columbus and Cleveland who come down to see the fall colors in Appalachia


2. the opportunity to shop at a Walmart on the outskirts of your community once a week, or driving 60 miles after filling the tank for the round trip to a Walmart 2 counties away to shop once a month


3. living in your humble 2 bedroom home which grandpa bought in a not so great neighborhood near your friends and church, or being pushed into a balloon mortgage out in the suburbs by developers who bought the land with the help of city council rezoning to "revitalize" the down town


4. being denied access to military recruiters who might make promises and come through on 50% of them, or hang out on the street corners with your friends and do a few drugs


5. a job that has potential but no guarantees, or the security of a steady income stream from WIC, low income housing support, food stamps and SCHIP


6. a used automobile that's not very fuel efficient or bus transportation that might get you within 2 miles of shopping and the doctor's office


7. a used automobile that's not very fuel efficient or a fancy 10 speed bike and snappy lycra shorts with matching helmet

Don't answer based on your income or education in 2008, answer truthfully what you would do if your income was $20,000 a year. Think local, not global, as the tree huggers would say. You can't create another scenario. This is my fantasy, not yours.