Wonkbook: 50 years after the March on Washington, the jobs and wealth gaps persist

August 19, 2013

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(Photo by UPI)
(Photo by UPI)

Here's a stat for you, via Zachary Goldfarb: "Fifty years ago, the unemployment rate was 5 percent for whites and 10.9 percent for blacks, according to the Economic Policy Institute. Today, it is 6.6 percent for whites and 12.6 percent for blacks. Over the past 30 years, the average white family has gone from having five times as much wealth as the average black family to 6 1/2 times, according to the Urban Institute...Twenty-one percent of blacks lack health insurance, compared with 13 percent of whites, according to the Kaiser Health Foundation."

Something else happened 50 years ago, too: The March on Washington. President Obama keeps a framed program in the Oval Office. He's quick to remind visitors that the name of the rally wasn't "The March on Washington," or even "I Have a Dream." It was "The March on Washington for Jobs and Freedom." Jobs have always been an inextricable element of the fight for racial justice.

Later this month, Obama will speak at the the 50th anniversary of Martin Luther King Jr'.s march. Much of the focus will be on economic justice. Previewing the speech to Goldfarb, Valerie Jarrett says, “If you look at poverty or unemployment, they disproportionately affect people of color. People who don’t have health insurance are disproportionately of color. There is inevitably an overlap in addressing racial equality at the same time you’re trying to create economic empowerment.”

Given the politics, the White House quietly know that that's all there can be. A tax cut specifically targeted at African-Americans, for instance, would probably get Obama impeached. But addressing these yawning gaps through overlap policies risks letting African Americans fall yet further behind. The policies to help them don't move nearly as fast, or have nearly the heft, of the economic forces buffeting them.

In the Financial Times today, Tim Harford writes about buzzy new research from economists Steve Kaplan and Joshua Rauh that compares compensation for titans of various industries. The idea that weak corporate governance is driving the rise of the one percent, they write, doesn't hold up, as partners at law firms are seeing a rise similar to CEOs of companies, as are sports stars. The idea that social norms are changing doesn't quite fit, as the heads of private companies are doing better than the heads of public companies -- and public-sector leaders haven't seen anything like the rise in salaries of private-sector ones.

"The uncomfortable truth," writes Harford, "is that market forces – that is, the result of freely agreed contracts – are probably behind much of the rise in inequality."

During the first March on Washington for Jobs and Freedom, the enemy was clear: Laws that robbed African Americans of the freedom to get jobs. That meant the remedy -- difficult as it was to achieve -- was clear, too.

Today, the culprit is more diffuse, and harder for the government to grapple with: An economy where workers are free to get jobs but few are available and even fewer pay well paired with a world in which those already doing well have an easier time doing even better.

Wonkbook's Number of the Day: $930 million. That's how much sequestration cuts from federal housing-assistance programs.

Wonkbook's Graphs of the Day: FRED added stimulus data.

Wonkbook's Top 5 Stories: 1) the many dimensions of inequality; 2) Obamacare and Medicare; 3) 95 percent chance of anthropogenic climate change; 4) the NSA's Not Saying Apologies; and 5) criminal-justice reform.

1) Top story: Inequality, or inequalities?

For Obama, 50 years after historic march, economic equality the path to racial justice. "When he speaks later this month on the 50th anniversary of the March on Washington for Jobs and Freedom, Obama will be at the confluence of efforts to reduce racial and economic divisions. As the president addresses a crowd from the steps of the Lincoln Memorial on Aug. 28, current and former advisers say, he will want to impress upon listeners how progress toward racial equality will require progress toward economic equality. Obama, who keeps a framed program from the “March on Washington” in the Oval Office, has said he has often reminded people that the march was as much about what he called economic justice as a demonstration for civil rights." Zachary A. Goldfarb in The Washington Post.

Sequestration crunches low-income housing program. "When Krystal Bearden returned home from hospital after emergency surgery in June, she was greeted by a letter informing her that the rent on her government-subsidised dwelling would increase by almost $1,000 a month...The voucher programme, passed under the 1937 Housing Act, subsidises rent for low-income families. But sequestration has forced federally funded housing authorities to freeze new vouchers, push families into smaller homes and cut back on how much rent they are willing to subsidise – leaving the families to foot the rest of the bill." Gabriel Muller in The Financial Times.

...And how sequestration killed research rabbits. "'I have riffed one postdoctoral fellow and euthanized many beautiful, rare and expensive transgenic rabbits that were new, exciting models for testing new therapies for human retinal degenerations. We petted them, played with them, fed them treats. Now they are dead. I blame Congress directly for that.'" Sam Stein in The Huffington Post.

Most of US is wired, but millions aren't plugged in. "Administration officials and policy experts say they are increasingly concerned that a significant portion of the population, around 60 million people, is shut off from jobs, government services, health care and education, and that the social and economic effects of that gap are looming larger. Persistent digital inequality — caused by the inability to afford Internet service, lack of interest or a lack of computer literacy — is also deepening racial and economic disparities in the United States, experts say." Edward Wyatt in The New York Times.

Test for Fed's next chief: quelling dissent. "During nearly eight years running the Federal Reserve, Chairman Ben Bernanke's signature style has been managing by consensus. He has given colleagues wide latitude to speak their minds at closed-door Fed meetings and in public. He also has worked behind the scenes to find common ground among the 18 other strong-willed Fed governors and regional bank presidents when he has had to make big policy decisions. With Mr. Bernanke expected to give up the helm when his term ends in January, his leadership style, and the style of his potential successors, warrant extra scrutiny. An already divided Fed could become more fractious when Mr. Bernanke departs, with important implications for the central bank, markets and the economy." Jon Hilsenrath in The Wall Street Journal.

Explainer: 3 questions for Larry SummersMatthew O'Brien in The Atlantic.

...But there's been no sign of remorse at end of Bernanke years. "U.S. markets are backing up Ben S. Bernanke’s assertion that he has the best inflation record of any Federal Reserve chairman since World War II. Since Bernanke took office in February 2006, inflation as measured by the personal-consumption-expenditures price index has averaged 1.9 percent. Criticism from Republicans, including House Speaker John Boehner of Ohio, that the Fed’s stimulus would spark a rapid acceleration in prices is unfounded, bond yields show. Traders anticipate prices will rise at a 2.17 percent rate in the next decade, near the Fed’s 2 percent goal." Caroline Sales Gage in Bloomberg.

A profile of Janet Yellen. "In interviews with more than a dozen people who have worked closely with Yellen, the portrait that emerges is of a careful and deliberate thinker who has been mostly right in her assessments over the tumultuous past six years of crisis, recession and grinding recovery. She has been a strong intellectual force within the Fed, a tough taskmaster for staff and single-minded in her desire to push down joblessness. She has been less inclined to wring her hands over the risks that the Fed’s easy money policies could create new bubbles or stoke inflation." Neil Irwin and Ylan Q. Mui in The Washington Post.

Explainer: Economic data coming your way this weekAmrita Jayakumar in The Washington Post.

HARFORD: Why we should care about inequality. "There are two reasons we might: process and outcome. We might worry that the gains of the rich are ill-gotten: the result of the old-boy network, or fraud, or exploiting the largesse of the taxpayer. Or we might worry that the results are noxious: misery and envy, or ill-health, or dysfunctional democracy, or slow growth as the rich sit on their cash, or excessive debt and thus financial instability...[W]hat really should concern us is that the two reasons are not actually distinct after all. The harmful outcome and the unfair process feed each other. The more unequal a society becomes, the greater the incentive for the rich to pull up the ladder behind them." Tim Harford in The Financial Times.

GLANZ: Is Big Data a big economic dud? "What is sometimes referred to as the Internet’s first wave — say, from the 1990s until around 2005 — brought completely new services like e-mail, the Web, online search and eventually broadband. For its next act, the industry has pinned its hopes, and its colossal public relations machine, on the power of Big Data itself to supercharge the economy. There is just one tiny problem: the economy is, at best, in the doldrums and has stayed there during the latest surge in Web traffic. The rate of productivity growth, whose steady rise from the 1970s well into the 2000s has been credited to earlier phases in the computer and Internet revolutions, has actually fallen." James Glanz in The New York Times.

Music recommendations interlude: The Eagles, "The Long Run," 1979.

Top opinion

BLOOMBERG: 'Stop-and-frisk' isn't racial profiling. "[T]he NYPD targets its manpower to the areas that suffer the highest crime levels. Ninety percent of all people killed in our city — and 90 percent of all those who commit the murders and other violent crimes — are black and Hispanic...That the proportion of stops generally reflects our crime numbers does not mean, as the judge wrongly concluded, that the police are engaged in racial profiling; it means they are stopping people in those communities who fit descriptions of suspects or are engaged in suspicious activity." Michael R. Bloomberg in The Washington Post.

KONCZAL: Conservatives don’t get that some problems are public, and it’s hurting them. "Conservatives spend a lot of time discussing how inequality isn’t as big as we think, or how the poor have a much better life because certain durable goods are cheaper, or how austerity and liquidation are better for the overall economy than stimulus. But what they really think is that these don’t belong in the realm of the public, and that’s the realm of policy." Mike Konczal in The Washington Post.

KRUGMAN: One reform, indivisible. "[E]ven in 2011 Mr. Obama wouldn’t give ground on the essentials of health care reform, the signature achievement of his presidency. There’s no way he would undermine the reform at this late date. Republican leaders seem to get this, even if the base doesn’t. What they don’t seem to get, however, is the integral nature of the reform. So let me help out by explaining, one more time, why Obamacare looks the way it does." Paul Krugman in The New York Times.

DICKSON: Public goods easiest to deliver through US states. "[T]hanks to local and state spending, infrastructure funding across the US is in better shape than many realise. Behind this, and underlying the willingness of Republicans and Democrats to work more pragmatically at city level, is the fact that the value of public goods is greater the nearer you are to them – and thus the more willing you are to pay for them" Martin Dickson in The Financial Times.

SINGER: We need a war on coal. "If we are wish not to be totally reckless with our planet’s climate, we cannot burn all the coal, oil, and natural gas that we have already located. About 80 percent of it—especially the coal, which emits the most CO2 when burned—will have to stay in the ground...According to Daniel Schrag, director of Harvard University’s Center for the Environment and a member of a presidential science panel that has helped to advise Obama on climate change, “Politically, the White House is hesitant to say they’re having a war on coal. On the other hand, a war on coal is exactly what’s needed.”" Peter Singer in Slate.

Inspiring comebacks interlude: Get off the ground, dust yourself off, and get going.

2) Just like Medicare?

Obamacare's hurdles higher than Medicare's. "President Barack Obama says he’s not worried that all the Obamacare fights will kill the law — because people fought the creation of Medicare and Social Security too, and now they’re more popular than ever. Democrats have always wanted to believe Obamacare would follow the same pattern: Opponents tried to block passage of the new programs, but once they became law, the public saw the benefits and the opposition faded away. But this time there’s a difference. Political opposition to Obamacare is still as strong as ever, more than three years after it was signed into law." David Nather in Politico.

Norquist: Obama would take Obamacare delay to avoid shutdown. "Anti-tax advocate Grover Norquist predicted that President Barack Obama will agree to delay implementation of the bulk of his health-care law set to take effect on Oct. 1 and avoid a government shutdown. “They’ve been delaying whole sections of it, again and again and again,” Norquist, president of Washington-based Americans for Tax Reform, said on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “It’s going to be increasingly difficult for the White House” not to delay other parts of the law." Heidi Przybyla in Bloomberg.

Some fear health law could give members of Congress and their staffers abortion coverage. "An attempt to fix a problem with the national health-care law has created a situation in which members of Congress and their staffers could gain access to abortion coverage. That’s a benefit currently denied to them and to all federal employees who receive health insurance through the government’s plan...[T]he proposed regulation did not explicitly address abortion coverage. Under the health-care law, insurance plans in the new markets may cover abortion unless a state passes a law prohibiting them from doing so. Plans offering coverage of abortion, however, may not use federal funds to pay for it. Federal tax credits to help the uninsured afford coverage must be kept apart from premiums collected for abortion coverage." Ricardo Alonso-Zaldivar in The Associated Press.

British comedy interlude: Do you speak English?

3) 30 percent chance of rain today in D.C. and a 95 percent chance of anthropogenic climate change

Report: UN panel finds it's 95 percent likely humans cause of climate change. "Scientists say it is at least 95 percent likely that humans are the main cause of climate change, largely by burning fossil fuels, Reuters said of the findings in the draft Intergovernmental Panel on Climate Change report. That’s up 90 percent from the last report in 2007, and far surpasses the 66 percent in 2001." Zack Colman in The Hill.

U.S. energy boom helps fuel Obama’s export goal. "The value of US fuel exports has grown faster than other goods and commodities during Barack Obama’s presidency, according to a Financial Times analysis, emerging as a driving force behind his goal to double exports by 2015...According to Census bureau export data reviewed by the FT, the value of petroleum and coal exports more than doubled from $51.5bn in the year to June 2010 to $110.2bn in the year to June 2013. This placed it at the top of the rankings of export growth. Oil and gas exports were second, with a 68.3 per cent increase over the same period but based on smaller nominal values." James Politi in The Financial Times.

New rechargeable flow battery enables cheaper, large-scale energy storage. "MIT researchers have engineered a new rechargeable flow battery that doesn’t rely on expensive membranes to generate and store electricity. The device, they say, may one day enable cheaper, large-scale energy storage. The palm-sized prototype generates three times as much power per square centimeter as other membraneless systems — a power density that is an order of magnitude higher than that of many lithium-ion batteries and other commercial and experimental energy-storage systems." Jennifer Chu in MIT news.

This might be the creepiest thing I've ever seen interlude: How deep does the uncanny valley go? Because I think we've found the bottom.

4) NSA stands for Not Saying Apologies

NSA defends spying amid privacy violations. "John DeLong, the agency’s compliance director, said cases of intentional wrongdoing were rare and that none of the errors cited in the audit were made on purpose. “People need to understand that these are not willful violations, they are not malicious,” DeLong told reporters on a conference call yesterday...“The documents demonstrate that the NSA is monitoring, detecting, addressing and reporting compliance incidents,” Josh Earnest, a White House spokesman, said yesterday in a statement on the disclosure of the audit." Chris Strohm and Gopal Ratnam in Bloomberg.

Glenn Greenwald's partner detained at Heathrow airport for nine hours. "The partner of the Guardian journalist who has written a series of stories revealing mass surveillance programmes by the US National Security Agency was held for almost nine hours on Sunday by UK authorities as he passed through London's Heathrow airport on his way home to Rio de Janeiro. David Miranda, who lives with Glenn Greenwald, was returning from a trip to Berlin when he was stopped by officers at 8.05am and informed that he was to be questioned under schedule 7 of the Terrorism Act 2000." The Guardian.

Good advice interlude: How to negotiate your job offer.

5) Movement on criminal-justice reform

States revisit mandatory jail time. "Aponte is among an estimated 2,100 so-called juvenile lifers across the country - inmates sentenced to lengthy prison terms without parole - who hope for a reprieve in the wake of a 2012 U.S. Supreme Court ruling, Miller v. Alabama. The decision determined such sentences are cruel and unusual punishment and therefore unconstitutional. The court ruled, 5-4, that the proportionality of the sentence must take into account “the mitigating qualities of youth,” such as immaturity and the failure of young people to understand the ramifications of their actions. In part to head off an avalanche of expected appeals, at least 10 states have changed laws to comply with the ruling." The Associated Press.

...That includes conservatives. "Five days after he announced his candidacy for governor of Virginia, Republican Ken Cuccinelli II showed a side of himself seemingly at odds with his reputation as a tough law-and-order conservative. The Virginia attorney general stood proudly at a news conference in late 2011 announcing the exoneration of a Richmond man who had spent 27 years in prison after being falsely convicted of rape. Cuccinelli had personally championed the man’s innocence, a sign of the broad evolution in Cuccinelli’s views on crime and punishment that would also lead him to argue that a frugal government should be more discerning about whom it puts behind bars." Jerry Markon and Fredrick Kunkle in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

We’ve covered the world in pesticides. Is that a problem? Brad Plumer.

How Ticketmaster ruined the concertgoing experience, and how it might be savedLydia DePillis.

Conservatives don’t get that some problems are public, and it’s hurting themMike Konczal.

Et Cetera

New twist on same-sex marriage legal fightJess Bravin in The Wall Street Journal.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.

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Brad Plumer · August 18, 2013