On Hamiltonian democracy and Paterson

Cross-posted from Channel Surfing:

The Nation has a piece by Richard Kreitner on Alexander Hamilton’s real legacy — a financial system tilted toward investors and a failing New Jersey city that Hamilton essentially created.

Hamilton’s theory was that

industrial America would indirectly benefit the many because it directly benefited the few. “It is a truth as important as it is agreeable, and one to which it is not easy to imagine exceptions, that everything tending to establish substantial and permanent order, in the affairs of a Country, to increase the total mass of industry and opulence, is ultimately beneficial to every part of it,” he wrote. “On the Credit of this great truth, an acquiescence may safely be accorded, from every quarter, to all institutions & arrangements, which promise a confirmation of public order, and an augmentation of National Resource.” Today, we call this trickle-down economics. Hamilton made it the cornerstone of our political order.

The result was an comic bubble that burst in 1792 — and sent numerous Hamilton cronies to jail. Paterson’s population fell from 500 to 43, he writes, and the public-private partnership created to underwrite the city’s creation proved a disaster, thanks to its lack of accountability and surfeit of privilege.

Founded on Hamilton’s hypothesis that the pursuit of private gain could be harnessed to serve the public good, Paterson was a failure from the start.

Paterson rebounded two decades later “after Eli Whitney invented the cotton gin and Jefferson’s controversial embargo of 1807 and the War of 1812 forced the United States to develop its own manufacturing,” made possible, as well, by “the exploitation of slave labor.” The Silk City grew — until labor conditions and rampant inequality led to a massive and violent strike. What followed was a century of collapse.

If Paterson was a pioneer of industrialization in the United States, it was also a pioneer of deindustrialization: In the 20th century as in the 18th (and today), arrangements that relied on the coincidence of the interests of the few with those of the many were in danger of fraying the moment those interests became misaligned.

Ultimately, Kreitner writes, Paterson

was used by its industrial titans so long as it made no claims on their wealth, and abandoned as soon as it did. Ever since, it’s been ignored—by the nation of which it was to be a model and by the wealthier, whiter communities in its own backyard.

I haven’t seen the musical, but it is clear it is not meant as history. The casting choices, the hip-hop songbook, the focus on Hamilton’s origins, all play into the American mythology and contradict the current anti-immigrant zeitgeist in important and transformative ways. The real Hamilton, however, also offers important lessons — about the failures of the American economy, inequality and crony capitalism.

Poverty at record rates in NJ, report says

Cross-posted from Channel Surfing:

Legal Services of New Jersey issued its annual poverty report, which found that more people in the state had trouble making ends meet in 2011 than at any time since the late 1950s.

The report‘s top findings were:Benchmarks2013

1. Record Poverty.

In 2011, poverty in New Jersey reached a record high not seen for the past 50 years. Census data going back to 1959 show that the official poverty rate of 10.4 percent in 2011 has not been surpassed in the last fifty years.

2. Nearly One-Third Face Significant Deprivation.

Using the Real Cost of Living, the portion of the state struggling to meet basic needs is dire — 31.5% were below 250% FPL in 2011. More than 2.7 million residents, or about 31.5 percent of the total population, were living in true or actual poverty in 2011; they were grappling to meet basic necessities.

3. Record Child Poverty.

Record number of children were living in poverty in 2011. About 780,000, or 38.5 percent of all children, were below 250% of FPL in 2011. Of these, 31.2 percent were below 200% of FPL and 14.7% were below 100% of FPL, all record highs for the state.

4. Extreme Poverty In Certain Municipalities.

Municipal poverty was highest in Camden, where 64.5 percent of the total population lived in households with incomes below 200 percent of FPL, followed by Passaic with a poverty rate of 59.5 percent, Lakewood at 55.9 percent, Paterson at 53.3 percent, Trenton at 51.5 percent, and Newark at 50.4 percent.

5. Child Poverty In Extreme Poverty Municipalities.

Child poverty rates were highest in Camden — 79 percent of all children were below 200 percent of the FPL in 2011. In another six places – Passaic, Lakewood, Paterson, Trenton, Newark, and Union City — more than 60 percent of children were below 200 percent of the FPL.

6. Continued High Unemployment.

In July 2013, the unemployment rate in New Jersey was 8.6 percent, substantially higher than the 4.6 percent at the onset of the Great Recession, and even higher than the current national average of 7.4 percent. The most recent data for July 2013 shows that New Jersey had the seventh highest unemployment rate in the nation.

7. Record Food Insecurity.

Food insecurity reached another all-time high in 2011. A sizeable portion of New Jersey households did not have enough food for all their members in 2011. Data from a three-year period (2009-11) show that 12.3 percent of New Jersey households were food insecure at some point during that period, and 4.5 percent had very low food security, meaning that the food intake of one or more household member was reduced or their eating pattern disrupted due to lack of resources. This represents a record high for the fifth consecutive year.

8. High Level of Medically Uninsured.

Working-age population below 200% FPL had very high rates of uninsurance in 2011. Working adults with low incomes were much more likely than either children or the elderly to be without health insurance coverage. In 2011, a sizeable proportion of working adults with incomes below 200 percent of the FPL were without health insurance — 41.7 percent of working adults below 50% FPL, 38.2 percent between 50-99% FPL, and 42.4 percent with incomes between 100-200% FPL.

9.Poverty Correlates with School Districts Needing Improvement.

School districts failing to make adequate progress were more likely to be located in high poverty areas. During 2011-12, 19 category “A” school districts (poorest in the state) were identified as needing improvement. The “J” districts (considered the most affluent in the state) did not have any schools identified as needing improvement. In addition, the number of “A” district schools needing improvement has increased significantly in the past three years. During the 2009-10 school year, 13 failing districts fell under the “A” classification. By 2011-12 school year, the number rose to 19, a 46 percent increase. In all three years, no “J” district schools were identified as needing improvement.

Officials with Legal Services said about a quarter of the state’s residents were considered poor in 2011″nearly 1 percent
higher than the previous year and 3.8 percent more than pre-recession
levels,” according to NJ.com.

“This is not just a one-year or five-year or 10-year variation,” said Melville D. Miller Jr., the president of LSNJ, which gives free legal help to low-income residents in civil cases. “This is the worst that it’s been since the 1960 Census.”

The numbers could get worse, LSNJ said (according to NJ.com):

The report warned Census figures for 2012 to be released this month may be higher. Those numbers are expected to show some of the impact from Hurricane Sandy, which took a bite out of the state’s economy and destroyed a large amount of affordable housing.

New Jersey is not alone, Miller said.

In 2011, the federal poverty rate was the largest it had been in 18 years, according to the Congressional Research Service.

“The Great Recession was the worst major economic event since the early ’30s,” Miller said. “It’s taken longer for the U.S. to come out of it.”

NJ Spotlight: Small-Business Group Asserts Minimum Wage Hike Would Jeopardize Jobs

From my story today on NJ Spotlight:

Tens of thousands of jobs would be lost in New Jersey if the state’s minimum wage increases, according to a study by a small-business coalition.

The claim adds new fuel to the debate over hiking the state’s minimum wage, less than five months before voters determine the fate of a $1 increase and proposed indexing of the state’s minimum to inflation.

The study by the National Independent Business Federation says that New Jersey could lose about 31,000 small-business jobs over the next decade if the referendum question passes. The reason, according to the study, is that the wage hike and indexing would increase business costs and create a level of uncertainty for business owners about their labor expenses.

Supporters of the wage hike, however, say the study is misleading and does not account for the widespread impact that increased wages would have on the economy. The boost in income for low-wage workers will act as a stimulus, they argue, because workers earning the minimum or near the minimum will then spend money they currently do not have, which will create additional revenue for small businesses.

The minimum wage increase will be on the Nov. 5 ballot as a constitutional amendment, along with the election of the governor and the entire state Legislature.

To read the entire story, go here.

NJ Spotlight: ‘Renters: Hurricane Sandy’s Invisible Victims’

I have a story at NJ Spotlight today on the plight faced by renters displaced by Hurricane Sandy.

Steven Zitz moved to Sayreville when he was in high school and had lived in the Sayreville-South River area for the past 20 years. He had his own business as a house painter and had been working regularly despite the stagnant economy.

Superstorm Sandy changed all that.

His aunt’s house, where he was renting a room, was badly damaged. He lost his work van and has been staying with an uncle in Brooklyn since the storm, unable to work and unable to qualify for government assistance.

“I’m in a very tough spot,” he said. “My back is not only to the wall, it’s through the wall.”

Zitz is one of the thousands of renters who still find themselves scrambling to rebuild their lives. While state and federal agencies have assisted 21,000 renters, several thousand more have likely fallen through the cracks, though the number is difficult to pin down, advocates for low-income residents say. Unlike property records, such as deeds and mortgages, the state does not require that lease agreements be filed with the counties. And many landlord-tenant arrangements are informal, operating on a month-to-month basis.

State officials say they are doing what they can for renters and that the state’s recovery plan includes what the administration calls “a range of rental housing activities designed to replenish rental housing stock lost to Sandy, rehabilitate affordable rental units left uninhabitable by Sandy, and provide affordable housing for special needs populations.”

For more, read here.

When a choice amounts to no choice at all

This story from The Times of Trenton today is not about parenting, though that is the frame in which it is being reported. The story is about the difficult and dangerous decisions poor parents are forced to make everyday and the consequences they often face.

Sheena Johnson was arrested in April after police found her living in a Ewing storage locker with her two sons, ages 5 and 10. She apparently had been living with a boyfriend and, when they broke up, she found herself without a place to live. Her answer, which she now says was an error in judgment, was to move into the storage locker. She apparently had been living there for about a month when she was arrested (she also faces charges that she slashed the tires of her boyfriend’s car). According to an April 30 story in The Times,

He said the family went to restrooms at local businesses to brush their teeth and use the bathroom and were eating granola bars, applesauce and other packaged foods. Johnson told police she sometimes got a hotel room or brought the children to friends’ houses to shower, Mennuti said.

Her trial on abuse and neglect charges is supposed to start today, according to the Times. The story is a troubling one because, as the judge in the case points out, there are services available for families in need. At the same time, the reality is that most of these services are stressed beyond their limits, with shelter space now at a premium. There are also issues of trust, with many low-income families assuming the worst of social welfare agencies.

Her lawyer, Dan Toto of Lawrence Township, says

the Johnson case is fundamentally about people living outside the margins and struggling to make ends meet.

 

“She doesn’t have a substance abuse problem, she doesn’t have a drug problem, she’s just poor,” he said. “They’ve made that a crime now.”

I’m not sure I would go that far, though there are many laws on the books that make the lives of the poor more difficult than they need to be. In this case, the use of the storage locker may have seemed like an expedient way of gaining shelter, but it also was not healthy for the children. It was a bad decision on Johnson’s part, but may have been one of the few decisions available.

And that is our fault. We have made it too easy to become poor in this country, while also eviscerating the programs designed to help the poor and making sure that the stigma of poverty is debilitating. There is not enough affordable housing in New Jersey or nationally, especially for those at the lowest rungs of the income ladder, and there are not enough jobs that pay living wages, let alone poverty wages.

Sheena Johnson’s bad decision may cost her custody of her family, along with her freedom, but aren’t we culpable to some degree for creating a system in which her choices were so limited as to be almost no choice at all?

Minimum wage campaign kicks off

An NJ.com story on today’s official kick-off of Raise the Wage’s official campaign to pass a state referendum that would increase the minimum wage from $7.25 an hour to $8.25 and index it for inflation shows the shortcomings of this kind of approach. While Raise the Wage — a coalition of unions and other organizations — intends to focus on grassroots organizing, its kick-off press conference featured the biggest names in New Jersey Democratic politics, which meant that the coverage was going to focus on, well, politics.

Here is the lede:

Two Democratic candidates for U.S. Senate, the party’s nominee for governor and top union leaders this morning kicked off a campaign to raise state’s minimum wage.

What follows, interspersed with some quotations about the need for a higher wage, is essentially more of the same — which unfortunately implies that the campaign is less about the wage-hike than about Democratic politics.

The issues, as some of the speakers apparently made clear, is about ensuring that low-wage workers earn enough to survive and the need to decouple the minimum wage from politics by tying it to the Consumer Price Index. The wage, which was last increased to $7.15 in 2005, though a federal increase pushed it to $7.25 in 2009. The wage, according to New Jersey Policy Perspective, is now worth $6.17 an hour in constant 2005 dollars. Gordon MacInnes told me back in January that, had the 2005 wage kept pace with inflation “it would be $8.52 an hour.”

That, Booker said at today’s press conference (NJ.com) is the crux of the issue.

“You look all around this region and poor working people are having to pay more for rent, more for food, more for gas, more for transportation, more for tuition,” Newark Mayor Cory Booker, the frontrunner for the Democratic U.S. Senate nomination, told about 65 people gathered at the New Hope Baptist Church. “All of these costs going up but minimum wage has stayed the same.”

Critics of the hike say will cost jobs, that it is too much of a wage hike too soon and that the escalator clause is bad policy. Gov. Chris Christie vetoed a Democratic bill that would have increased the wage to $8.50 with cost-of-living adjustment for just that reason.

Assembly Speaker Sheila Oliver disputed those claims:

“You will hear all kinds of arguments about why New Jersey can’t elevate the minimum wage. It’s a job killer. Businesses will leave the state. A host of different arguments,” Oliver said. “But we continue in New Jersey to provide tax breaks for millionaires, corporate tax incentives for businesses. But we will turn our backs on the lowest wage earners in the state?”

Polling shows the wage hike to be popular, though it has not received a lot of attention. It has been — and likely will continue to be — overshadowed by the governor’s race and now the U.S. Senate rate. The Raise the Wage campaign should bring it more exposure and, hopefully, the debate over the wage increase will get its own full hearing by the voters between now and November.

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