Toward Some Understanding of ISIS
We were inspired to plow through the lengthy piece in part
by the Obama Administration's care to avoid referring to ISIS as "radical
Islamists" or even religiously motivated. So the publication of some thoughtful
discussion defining the background and goals of ISIS looked to be helpful. And it does seem that fundamentalist Islam is
exactly what ISIS is about, according to Mr. Wood's commentary. The term "fundamentalist" is not
used here in any judgmental sense, but as a pure description of a group that
takes the Koran and the words of Muhammad quite literally.
Wood further describes that ISIS is concerned
mainly with a specific territory in Syria and Iraq, not with capturing or
destroying other parts of the world. So,
for instance, the Charlie Hebdo
attack in Paris in December was not an ISIS event, but apparently led by an al
Qaeda affiliate. Control over specific
territory is part of the definition of the caliphate ISIS believes it is, so
taking action in places far removed from that location is less important to
their mission. Eventually, spreading the
caliphate across the world is important, but only as an outward movement from
their present position.
State Department spokespeople have also suggested that the
most effective way to put down the evil of ISIS may well lie in social and
economic programs to promote the welfare of its people, to create job
opportunities for them perhaps. We would
agree with that to some extent. If the
populace of the ISIS region were prosperous, they might be less interested in
fighting against people they see as enemies.
However, Wood's material makes clear that economics is well down the
list of ISIS priorities. Its priorities
are better defined by religious rubrics and Sharia social arrangements. We'd guess that its adherents are genuinely less
interested in material prosperity and in devising projects to bring that about.
Finally, among the highlights we emphasize for you
here, Wood suggests that the Obama
Administration approach using air strikes and "proxy warfare" may
well be the best way to wear ISIS down.
A major armed invasion, rather than scaring them, could actually please
them: they believe an apocalypse is coming and a huge onrush of Western troops
might simply signal the start of that process.
We don't know enough to express reasoned opinions on these
views, but at least they now have some context and definition. If you have more elaborate thoughts, please
do share them. We ourselves are left,
this Lenten season, with a simple sentence that has been personal to us since
9/11: "Love your enemies and pray
for those who persecute you."
Putting a Face on Economic Inequality
Perhaps you have read the press
coverage over the past couple of weeks about James Robertson, a factory worker
in Rochester Hills, Michigan. Until two weekends ago, James walked every day, Monday through Friday, from his home in
Detroit to the factory, a total hike for him of 21 miles a day. He also traveled some segments of his commute
on buses, but they did not cover the whole route. James had had a car, a 1988 Honda, but it
broke down irreparably in 2005, and since he could not afford a replacement, he
began his daily walking routine. Despite
the burden, Robertson has had perfect attendance at work for 12 years, rain,
Over time, Blake Pollock, a bank vice
president who passed Robertson frequently, noticed this hardy walker along a
road where there obviously weren't very many pedestrians. He began picking Robertson up, and they
became friendly. Then, young Evan Leedy,
a computer science student at Wayne State University, learned about Robertson
and set up a crowd-funding site to raise some money to buy him a car. The hope was that they'd get about $5,000 to
purchase some good, reliable used one.
Instead, there is about $350,000. A story appeared in the Detroit Free Press
in the wake of all the interest, a car
dealer donated a 2015 Ford Taurus. Leedy
and Robertson were to have met last week with financial advisors to set up
trust accounts for maintaining the car and its associated expenses.
Robertson's job pays $10.55 an hour, well
above Michigan's minimum wage of $8.15 an hour but not nearly enough for him to
buy, maintain and insure a car in Detroit.
According to one insurance information website, Detroit has the highest
car insurance rates of any city in the country.
Those of us in New York and some other major cities have no real
appreciation for the life turmoil that can ensue when one's car breaks down in
car-centered locales. We have access to
prolific public transportation; they don't.
The only thing they can do is walk.
This Is Exactly What Trinity
Institute Was About
We relate this story after
attending Trinity Institute in late January.
The vignette highlights exactly the kinds of people whose situations
constituted much of the discussion there.
As we noted in our preview post, the subject was income inequality;
speakers mainly emphasized concerns over those at the low end of the income
In our example here, Robertson is
distinctive for getting befriended by people with sufficient means to help him
out of his tough circumstances. Such
personal attention is surely rare for folks in his position. A Trinity speaker, Rachel Held Evans, a
blogger on these issues, highlighted the fact that she herself has befriended a
couple of people in a low-income range.
Getting to know them closely gives her a special appreciation for them
as individuals just like herself but with the extra burdens of trying to get
along with insufficient resources. It
brings the poverty issue into sharp relief, rather than confining it to the
vague picture one gets just reading tables of numbers.
Some Commentary on What Being
Numbers and lists can be helpful,
though. Barbara Ehrenreich's
presentation brought us surprise and even shock as she listed a collection of
local ordinances in cities and states around the country that interfere with
the public's treatment of the homeless.
In some Florida cities, for instance, it is illegal to share one's own
food with homeless people on the street or in a park. Ms. Ehrenreich, who noted that she is not a
religious believer, expressed the opinion that such regulations hardly seem
Christian to her. We all agreed, and
quite audibly so. When introducing Ms.
Ehrenreich, Robert Scott, the director of Trinity Institute, spoke favorably of
the fact that her book Nickel and Dimed
remains a familiar
read on these issues even 14 years after its publication. Ehrenreich replied that while she is gratified
that the book is still read, she is very unhappy indeed that the problems and
circumstances she describes there in fact remain relevant after such a long
time. We again agreed. Further, some local jails actually bill
inmates for room and board expenses.
Would you believe??
Her presentation was part of a
session on "class" matters; she was obviously emphasizing the
difficulties that attend being poor, that is, the simple lack of sufficient
income. One of the panelists, R. R. "Rusty"
Reno, editor of First Things
, further argued that class comes first, that is,
social position and one's cultural orientation.
Without sufficient "social capital", people cannot be
permanently lifted out of economic poverty.
He was especially concerned about families headed by single
mothers. Few agreed with this viewpoint,
especially Reno's comments about single parenthood. Still, our own reading and even some material
we've written here indicate that such two parents in a home are important in
the improvement of the whole family's station in life.
These arguments brought the discussion to what might be done
to lift the lower classes into better life positions. Education holds a key place here. On the Friday evening, we watched Robert
Reich's film Inequality for All
, after which he answered questions from his
office in Berkeley, California, via Skype.
He suggests that most education efforts focus on advanced,
graduate-level work, and not enough on ordinary schooling for young children. We need education of all kinds. At the Saturday morning session on what we
can do about inequality, Nicole Baker Fulgham added weight to those views on
education, much as her work which we cited here
in early December relative to the racial concerns over the killing of
African-Americans by police in Ferguson, Missouri, and Staten Island, New York.
Plentitude Helps Everyone
Live More Sustainably
There are other facets to
improving quality of life and diminishing economic differences. Juliet Schor, author of True Wealth, was the
keynoter at that Saturday session; she brought attention to innovations in the
organization of economic activity, which lead to what she calls
"plentitude": collaborative grass roots efforts that involve urban
farming, food co-ops, small business financing through crowd-sourcing and
credit unions. In our example above, that crowd-sourcing tool indeed helped James Robertson get his
car. And one of the
efforts the Archbishop of Canterbury (who was another of the keynote speakers) has
promoted in own his local church-work in Great Britain is credit unions, which
can displace ultra-expensive payday lenders.
Other kinds of economic sharing include open-source software, like Linux
and Wikipedia, and forms of transportation, such as car and bicycle-sharing
Churches Provide Facilities
and Teach About Love
How can the church contribute to
all of this? At Thursday evening's
worship service, the Archbishop told us of efforts in Liverpool – one of
England's poorest regions – in which the Anglican bishop and the Roman Catholic
bishop worked together to set up relief efforts for unemployed coal
miners. At Saturday's panel
presentations, Nicole Baker Fulgham explained how the education efforts of her
group, the Expectations Project, are centered in churches, where tutoring and
after-school activities can take place, which deepen education
opportunities. Other speakers brought us
back to Rachel Held Evans's theme of befriending those with different positions
in society; churches' outreach efforts make this part-and-parcel of their
mission. At the same time, we were
admonished that when we ask questions about people's needs and desires, we have
actually to listen to their answers and be prepared to take actions toward
their fulfillment. That's part of
"loving our neighbors" and sharing in the Kingdom of God.
Walmart Announces Pay Raises!
And one final note as we were "going to press"
with our article, Walmart, the store everyone loves to hate, announced today
that they are raising the wages of thousands of their lowest-paid workers and
making their work schedules more orderly and predictable. This will hurt the company's profits in the
short-run, but it is in direct response to the current concerns about the
income gap. The Walmart Foundation also
announced a parallel plan to work with local community colleges and other
nonprofits to increase educational and advancement opportunities for their
employees. Social pressure is having an
effect. We'll talk more about these
actions – Walmart isn't the only one – as time goes on. All of everyone's commentary about inequality is having an impact!
Links to Presentations and
Besides the presentations, be sure to enjoy
the choir's anthem at the opening worship: "The Dream Isaiah Saw". https://www.trinitywallstreet.org/video/church-anthem-leaves-us-speechless
that its title among the individual links is "Church Anthem Leaves Us
Speechless" – and it did! Also, if
you need to be cheered up or have your spirit raised, watch the two Melanie
DeMore segments; Ms. DeMore is called a "vocal activist" and she is
indeed inspiring. First, for the Friday
morning session, https://www.trinitywallstreet.org/video/friday-melanie-demore-musical-gathering
and second, on Saturday morning, https://www.trinitywallstreet.org/video/saturday-melanie-demore-musical-gathering
. Watch the audience each time get into the
spirit of Ms. DeMore's songs. Regarding
the very last song, "Standing Stone", perhaps the way we began our
discussion here about James Robertson, who walked to work, means that a whole
collection of people around the country are "standing stones" for him
and they stood by him, wanting to help him get to his job every day.
Finally, just yesterday, February
17, we found more gifts from Trinity Institute in the form of a brand new course
from the website ChurchNext. It features
an introduction to plentitude by Juliet Schor and applications from community
and church groups. https://www.churchnext.tv/school/catalog/course/economic-equality-and-the-church-with-trinity-institute-for-groups
. We only just learned about ChurchNext
as we were preparing to attend Trinity Institute, and they have numerous
courses on a variety of church- and spirituality-related issues; not all of
their presenters are Episcopalian, but several denominations are represented,
giving a broad perspective. The cost is
quite nominal and the courses are very popular, involving online interaction
among participants. Barbara Crafton even
has a course on growing old gracefully, which coordinates with material in her
recent book, The Courage to Grow Old
Check it all out!
Labels: American Society, Christianity, Economy, Episcopal Church
Trinity Institute on Economic Inequality: a Preview
evening, January 22, through Saturday, we will be attending Trinity Institute
at Trinity Church in Manhattan. This
year's theme name is Creating Common Good
, and the majority of the discussion
will be about economic inequality.
Speakers are people you may well have heard of: Cornel West, Juliet
Schor and the Archbishop of Canterbury, to name a few.
of you are even attending via livestreaming into your own church or other
center. If you are at Trinity Church,
let's try to find each other.
afterward, I will write at least one article on the content. Friday's speakers highlight the problem of
inequality and Saturday's program emphasizes actions to try to ameliorate it,
such as better early-childhood education.
couple of facts on the broad topic:
For the five
years through 2013, Census Bureau data show the most unequal distribution of
income in the 60-year history of their calculations, measured by the so-called
Gini Index, a composite gauge of income spread.
The top 5% of households have just over 22% of total money income. Separate IRS figures show that the vaunted
"1%" paid 38% of the income tax in 2012. Median household income – that is, half of
households are above and half below – was $51,939, down 8% in
inflation-adjusted terms from the pre-recession level in 2007. The share of the population with income below
the poverty level was 14.5% in 2013. This
is an improvement from the 15% level of the previous three years; but in the
mid-2000s, ahead of the recession, the rate hovered around 12.5%.
Organization for Economic Co-operation and Development ("OECD") calculates
that through 2012, the U.S. has a wider range of relative income spread, that
is, a higher Gini Index, than 19 of the other 21 countries in that group. Only Mexico and Turkey had showed more
inequality in incomes. All but two
countries did experience steady or widening inequality over the previous 25
years, but only four countries showed a larger change than in the U.S.
A couple of
our own recent articles have spoken to related issues. We have noted a decline in labor force
participation and an associated phenomenon called "job
polarization". Compared to
historical patterns, people seem discouraged from seeking work, and some of that
discouragement may be associated with a decrease in job opportunities in the
middle-income range, such as factory work and office administration. At least some post-high-school education or
some re-orienting of high school course offerings toward mechanical skills
seems needed. We've also been concerned
about poverty, which came to specific attention in the recent police killings. Answers to this particular poverty situation
involve better education as well and some kind of business investment – or at
least business interest – in lower-income neighborhoods.
That type of
material will be the subjects of Trinity Institute presentations, so we'll see if
there are new, helpful solutions in the works.
Labels: American Society, Economy, Episcopal Church
Two New York City Cops Are Killed; Our Local Bishop Speaks
Just over two weeks ago, we posted commentary here [directly below] on the grand
jury decisions in the Ferguson and Staten Island police brutality cases not to
indict the police officers who killed two presumed criminals they were trying
to arrest. The demonstrations against
the police have continued since then, mostly in New York, but also in other
cities. It all came to a head this past
Saturday afternoon when a man drove from Baltimore to Brooklyn and proceeded to
shoot to death two cops sitting in their patrol car.
We were thinking perhaps that our blog post, in which we
advocate efforts to offer preventive help to, and lift up, people in
low-income, high-crime areas, skipped too many steps or missed the point of the
demonstrations altogether. They were,
after all, anti-police demonstrations, not necessarily outbursts from
demoralized people about their own seemingly powerless states of life.
Whatever the real goal, the situation got way out of hand
and led to the deaths of two ordinary cops doing a routine patrol job on a
Saturday afternoon. They were not taking
any actions and, as it happens, they weren't even white. One, named Wenjian Liu, is the son of
immigrant parents from China. The other,
Rafael Ramos, is Hispanic. Officer Ramos
was hardly a violent man; he was due to graduate later that very afternoon from
a program that trains lay chaplains for public service in crisis times just
such as this.
Feelings are heavy today in Brooklyn. The 84th
Precinct, the officers'
station, is our local precinct, the station house four blocks down the street
from where we live. We just now returned
from adding some flowers to a growing collection at the front door of the
Brooklyn is in the Episcopal Diocese of Long Island. Our Bishop, Lawrence Provenzano, happened to
have been in Brooklyn yesterday, making a long-scheduled visit at a parish in a
neighborhood not far away. Afterward, he
visited the scene of the shooting at Myrtle and Tompkins Avenues in Bedford-Stuyvesant
and talked to local police and to the people of that community. Then when he got home last night, he wrote to
the clergy of the Diocese; the letter is posted
on the Diocese website
. His own pain
is palpable and he urges a second look.
Listen to some of what he says.
At Myrtle and Tompkins, I stood and
talked with police officers, people on the street and residents standing on
stoops or in the doorways of the Tompkins Houses. The police officers talked
about their fears and those of their families. They talked about being
accustomed to dealing with critical situations - homicides, rapes, domestic
disturbance, robberies, but not being able to rationally deal with "their
own" being murdered. At Myrtle and Tompkins people
talked to me about being scared by all the killings, the rhetoric all around
them, and now the possible negative reaction in the community following the
murder of the two officers.
It became clear to me today that
regardless of what happens next; what organizing goes on, what investigations
are launched, programs developed and rhetoric shared, the church . . . must not
engage in grandstanding, instigating, organizing, or even marching any
longer. People are scared, hurt, confused and bewildered. The place
of the church in all of this is not to seize the moment to be relevant or for
that matter prophetic. Our place in all of this for right now is to
incarnate peace - peace in language, peace in program, peace in attitude and
peace in church.
I am calling upon the clergy of the
diocese to be agents of peace in the neighborhoods and communities we serve.
Our young people need some assurance and security. Our young people of color
need to know that we will stand with them, that we will protect and guide them
in sensible and responsible ways. They need to know that we will teach them how
to stand up for their rights and stand with them when those rights are violated
without resorting to violence. Those who serve us and protect us need to
know that we do not wish them harm and that we see them for who they are and
aren't. The police need to know that we are allies with them in service to the
. . . . I am asking that we strive,
and teach and practice peace and peacemaking. I am asking us to put the needs
of our young people, their families and communities first. Violence cannot be a
response to violence. Hatred must be remedied by love - love incarnate, made
real by those who are called to be the Body of Christ.
May Eric Garner, Michael Brown,
Wenjian Liu and Rafael Ramos rest in peace. May their families know the
comfort and mercy of Jesus. And may the people of our communities find and know
We are struck by the strength of our Bishop's words. And there are more in his full
. As we work for peace in our
cities, perhaps our own suggestions for fostering more education and encouraging
business opportunities in low-income neighborhoods aren't too far-fetched after
all. They're long-run, to be sure, but
these situations will keep cropping up and need to be tackled at the base. We'll be following up soon with some more specific
ideas along these lines.
Meantime, may you all enjoy peace – and joy – for Christmas
and for many days after.
Labels: American Society, Episcopal Church
Ferguson, Staten Island and Moving Forward
25, Barbara Crafton posted the following comment on the Geranium Farm Facebook
Discouraged and sad about yet another young black man who won't grow old, yet
another set of parents who won't see grandchildren, yet another town torn
apart. And another missed chance for all of us.
Or is it missed? We still have a chance to learn a better way. But first we
must admit that we need one. And that means we must listen to one another, and
not leave the room when someone says something that we don't like, muttering
something snide about "playing the race card." Newsflash: we are ALL
playing the race card, all the time, and most of us don't know it. None of us
can opt out of this deadly game.
But we CAN decide how we will play. Truth or a comfortable lie? A desire to
understand or an insistence on remaining ignorant of realities other than the
one we ourselves inhabit.
We have no grounds for despair, and no right to it. Not as long as we're still
intending to add some of our own commentary to this about moving forward from
here. Those thoughts originated as an
extension of the article we posted two weeks ago about lower labor force
participation and how that condition might be corrected. That problem may be different from the racism
questions Barbara discusses, but the two may have similar answers.
to our surprise, a grand jury in Staten Island, New York, declared that it
would not indict another white policeman for his fierce action against still
another black man he was trying to arrest.
This one is closer to home, quite literally.
We live at
the Brooklyn end of the Brooklyn Bridge.
On that afternoon of December 3rd
, we had occasion to cross
the street right at the entrance to the Bridge, at about 5:15PM, roughly two-and-a-half
hours after the grand jury's decision became known. There were police everywhere. A block or so on up a hill toward Brooklyn
Heights, a group of police vans and cars was parked next to a park. The cops, fortunately, were standing around
idly because right then they had nothing to do.
I chatted with one of them in a nearby diner, and he told me that, in
contrast, his colleagues elsewhere in the city were plenty busy. Indeed, that was the time when the
"die-in" at Grand Central Station was going on. The next day, after a night of demonstrations
around the city, heavy, visible police presence remained in our local
neighborhood and, I assume, elsewhere around the city.
Ferguson, these New York City protests seem non-violent; hardly any property
has been damaged and we've not heard of any significant injuries.
We do hope
the judge in the Staten Island court will accede to the prosecutor's request
and release some of the grand jury records.
Through various press reports and conversations, we have come to
understand, though, that Eric Garner was actively resisting arrest, which makes
the policeman's actions look less overdone than the video of the incident alone
might indicate. Also, we learned that
the senior police officer in Daniel Pantaleo's patrol unit that day was a sergeant
who is an African American woman. At the
same time, our point here is not to make judgments either way on this whole
Our point is
to talk about the kinds of actions that might address some of the underlying
problems. Why are those black men so
desperate that they robbed a convenience store or sold unlicensed
cigarettes. Why are their communities
less well off than surrounding towns or neighborhoods. We've found two specific approaches; they're
long-term actions, not immediate responses, and they're meant to lift up people
in lower-income neighborhoods, regardless of race. These themes seem to fit Barbara Crafton's broader
perspective described in her Ferguson comments.
just become acquainted with a group in Atlanta called Operation HOPE. Perhaps some of you already know them. The founder is John Hope Bryant, an associate
of Andrew Young; one of the board members is Bernice King, daughter of Martin Luther
King, Jr. Operation HOPE works in
schools in low-income areas to help students learn about legitimate banking and
business activities. In a recent book on
his work, Bryant explains that the people who live there have
entrepreneurial talents and leanings; it's just that their businesses
concentrate on illegitimate activities like drugs – or in Mr. Garner's case,
selling unlicensed cigarettes on a street corner. So Bryant wants to shift them to more
fulfilling work; he talks about a young man who took a notary public exam and
then set up a portable notary business.
He talks about three young men who set up a cleaning and yard-work
business in his own community. Then
Operation HOPE works with banks to set up regularized financial services in
these neighborhoods; bank managers go into schools and explain standard banking
to students, so they know there is an alternative to check-cashing outlets and
loan sharks. SunTrust Banks in Atlanta
is one of the main supporters and participants in these efforts, as are other
just become acquainted with Nicole Baker Fulgham. Dr. Fulgham is founder of The Expectations
Project, an organization that seeks to further education reform and narrow the
academic achievement gap by enlisting particular contributions from churches
and people of faith. She will appear in
January at Trinity Institute at Trinity Church Wall Street in New York. She has written Educating All God's Children
describing the need for this work .
We are still reading the book, and the early pages document ways poverty
handicaps educational efforts. Intriguingly,
Dr. Fulgham comments on the transformation of the population of the southern
California city where she lived from mainly African American to Hispanic; as that
shift took place, she explains, the African-American leaders in the school
system were hesitant to yield their governance positions and influence to the
incoming Hispanic population even as it became the majority in the
community. Thus, as Barbara Crafton
commented, we can all be racists in one form or another, even if we believe we
want to be anti-racist.
least we can see some ways forward here, which address at least two issues at
once. We can perhaps ease inequality by
lifting up the bottom groups and helping them learn to generate their own
growth. We can limit crime by showing
people fruitful, legal ways to make money.
And we can encourage participation in the real labor force, not the
shadow economy. The drawback, of course,
is getting versions of Mr. Bryant's and Dr. Fulgham's programs in place in the
vast number of locations where they are needed.
That takes time, but maybe if we can all look forward to something
constructive, then fewer people will feel the need to stage a die-in in Grand
Central Station or – this evening – in the intersection in front of Brooklyn's
Barclay Center sports arena.
Hope Bryant, How the Poor Can Save Capitalism
. San Francisco: Berrett-Koehler Publishers,
Inc. 2014. Operation HOPE's website is www.operationhope.org
Labels: American Society, Christianity
Why People Might Pull Back from the Job Market
early summer we expressed concern that fewer people are participating in the labor market –
fewer people are working or actively hunting for work, relative to the size of
the population – than has been the case for more than 35 years. Five years after the presumed end of a
massive recession, this fact surprised us and we promised to look more into
what might be going on. Shouldn't more people
be more anxious to work or to find work?
Instead, the so-called labor force participation rate stands at just 62.8%
of the population as of October, down from 65.7% in July 2009, the last month of the official
To recap our
June comments a bit, we look at three different age groups, older people, teens
and middle-agers, each of whom has a distinct relationship to the labor market
that reduces its participation. First
and perhaps most straightforward, there are more and more older people, so
retirement is a bigger factor than it has been historically. Indeed, Federal Reserve economists have used
fairly simple arithmetic with Labor Department data to estimate that about
1.25% of the decline in the participation rate is due to the aging
population. We could explore retirement
more, of course, but for our current discussion, this much about that group
will cover it. Second, teen-agers seem
to be less interested in getting a job than they were "when we were their
age". Our subsequent research has
turned up three reasons for this, which we will discuss momentarily. Finally, an increased share of middle-age
workers has been pulling back from the workforce. Since this group is obviously the most
important part of the working population, we want to know more.
Teens: School and Competition from Immigrants
and young adults, increased schooling looks to be the main force. Aaronson and her Federal Reserve colleagues,
whose study we just referenced about retirees, discuss teens as well, examining
the monthly employment data and the Labor Department's "American Time Use
Survey". They show that more young people are enrolled in school and for
those enrolled, school and extracurricular activities take more time every
day. You parents would be aware of this,
and the numbers show it to be so. They
estimate that school enrollment – including increased attendance in summer
school – and school time factors account for about three-quarters of the
decline in teen-age participation in recent years.
two likely and similar reasons for the remaining fall-off in teen-age work
interest. First, teens face heightened competition
from adults without college educations.
Due to changing technology, those adults face an increasingly
complicated job market. It turns out
that the kinds of work young people often do, such as food preparation, retail
sales and personal care, are now done by older workers more frequently than
before. We'll detail this issue when we
talk below about middle-agers. Second,
teens also face increasing competition from immigrant workers. Extensive statistical analysis shows that
teens have been more susceptible than adults to competition from the growing
numbers of immigrants who have no more than a high school education. These immigrants would have about the same amount
of work experience in the U.S. as do native-born teenagers.
altogether, teens are spending more time in school, and they are meeting
greater competition for the kinds of jobs they often do; these factors are
discouraging more of them from even trying to find jobs.
Middle-Agers: Job Polarization a Growing
that concerns us most are the middle-agers, whom labor market analysts refer to
as "prime-working-age" from 25 to 54. While 81%
of this huge group do work or actively seek work, that share has come down from
83% just before the recession. Our
research "googling" has turned up papers from other business
economists, Federal Reserve economists and even the Fed's Chair, which all
indicate that we are hardly the only people puzzled over this pull-back from
work. Even if 2 percentage points
doesn't look very dramatic, the growth of the economy as a whole and especially
the well-being of those very people who have pulled away can be hurt. What's been going on with those middle-agers? Can we tell something about why?
Francisco Federal Reserve economists Mary Daly and Elliot Marks argue that the
depth and severity of the recession have discouraged people but now that total
employment is finally back to pre-recession numbers and looking more vigorous,
those people might be expected to re-enter the labor force and seek jobs anew. Indeed, the September and October employment
reports did look more favorable, extending a trend of quite decent job growth through
seven months and including upward revisions to the last three months' results. Daly and Marks seem to argue that this will
re-attract some "non-participants".
They further argue that, as such a trend might feed on itself, work will
become far more enticing than it has been over the last six or seven years. Separately, the latest several weeks' data on
new claims for unemployment insurance show that layoffs are holding at
eight-year lows, another favorable sign.
writers are not so sanguine. A whole group
of studies has emerged describing a spreading phenomenon known as "job
polarization". This development
could well discourage a sizable group of people from even trying to find
work. You might be able to guess what it
means just from what you already see every day in the working world. At one end are high-level jobs in technology
and finance and business management. At
the other end are service jobs, such as those in restaurants and
hospitals. The middle range of factory
workers and office administrative positions is shrinking. Robots and other sophisticated machines do
increasing amounts of manufacturing assembly work, while the very computers you
and I use every day replace more and more secretaries, bookkeepers and the
like. So the mix of jobs – and incomes –
are more and more polarized: high-end jobs and low-end jobs predominate. This force plays into the income inequality
situation, as it seems to mean that energetic people who may not have advanced
educations might not be able to move up in the world as they have been in
recent decades. A whole "special
report" in a recent issue of The Economist
puts this in fairly stark
terms and discusses its global reach, as it is hardly confined just to the US
concrete proof that polarization is directly connected to people's withdrawal
from the labor force, but we can make one strong inference. The monthly employment survey asks people who
are "not in the labor force" if they would actually like to have a
job or if they don't want to work. For
the middle-aged population, the share who say they don't even want a job has
risen from 14% of that population in the late 1990s to 17% more recently. The share of that age group who would work if
they thought there was a good chance of getting a job has also risen, albeit marginally. Since this age group is much less subject to
retirement than older workers and is seen to face less impact than teens from
the influx of foreign workers, we can only believe that discouragement over the
increasing lack of opportunity is a major factor holding them back.
What Can We Do? Post-High School Training
So what can
be done about "job polarization" and about lower teen participation
in the workforce? Are we stuck in a new
economic quagmire? A full-blown answer
would take much more space than we have here, but we can offer a couple of
Department makes 10-year projections of the growth in various occupations and
categorizes them by the amount of education needed for entry. The middle-range ones being hit by
polarization are typically filled by people with a high-school diploma. Sure enough, projections for those show
several office functions and various kinds of factory assembly work with
absolute declines over coming years.
Even with other jobs expanding, such as personal care assistants,
computer-controlled machine operators and customer service representatives,
total jobs for high school grads are seen as the slowest growing segment.
if people get just a bit more education, such as a vocational school or
community college, their prospects pick up sharply. That is, if they get training in some
technical skill or perhaps additional math background, more occupations with
greater prospective growth will be open to them and will enable them to move
ahead rather than languish. And, in
addition, make more money over their working lives.
we've seen in discussions of these issues is "employability". Specific job qualifications are obviously
important. But recently, prospective
employers report that they often meet candidates who don't have so-called
"soft skills". While the
amount of education someone has may address the impact of job polarization, it
can be the soft-skill, employability issue that covers everyone and all jobs,
technical, advanced professional or low-end, this last sort the kind that
teenagers and immigrant laborers often compete for. Soft skills: do you dress properly, are you
on time, do you listen carefully to instructions and in turn do you ask
relevant questions to clarify and enhance your understanding, and perhaps most
seriously, can you pass a drug test.
Indeed, in a recent listing of the 10 most important skills employers
are known to desire in order to hire for some presumed popular jobs, the first
four are the soft ones. Would you be
a responsible and attentive worker, whatever the job itself is about. These skills can be taught at home, in high
school and also in many workforce development programs run by local governments
and nonprofit organizations.
focused for the workaday world is one big answer to our potential job and labor
market predicament. There are also social
factors, such as single-parent households, that contribute to trends in labor
force participation. And we haven't
mentioned lackluster wage gains. So
there is farther to go on these issues.
For the present, we do have the one approach of training, which can
help, and help a lot.
Christopher L. Smith. "The Impact
of Low-Skilled Immigration on the Youth Labor Market," Journal of Labor Economics. Vol. 30, No. 1, January 2012. Pp 55-89.
 Mary C.
Daly and Elliot M. Marks. "The
Labor Market in the Aftermath of the Great Recession," Business
Economics. Vol. 49, No. 3, July
2014. Pp. 149-155.
Bureau of Labor Statistics.
"Employment Projections: Occupational employment, job
openings and worker characteristics." December 2013. http://www.bls.gov/emp/ep_table_107.htm. The table includes more than 800 occupational
categories, which we sorted by educational requirements.
Lockhart. "Strategic Workforce
Development: Training for Employability."
Keynote Remarks for Community Development Conference: Transforming U.S.
Workforce Development Policies for the 21st Century. Rutgers University, New Brunswick, New
Jersey, October 16, 2014.
President and Chief Executive of the Federal Reserve Bank of Atlanta, a
co-sponsor of the conference. He
mentions three soft-skills training programs, Year-Up, STRIVE, and 12 for Life.
Personal Finances, the Great Recession and the Sluggish Recovery
We all keep wishing the economy would "feel
better", don't we? that there could be a sense of greater confidence in
jobs, in opportunities, in everyone's financial situations. We wonder why the recovery from the recent
Great Recession could be taking so very long.
Our last look at the economy, posted in late June, focused
on the job market, and we promised then to talk again about possible reasons
the current malaise has resulted in people dropping out of the labor
force. Very soon, the Census Bureau and
the Labor Department will publish some detailed data for 2013 that hopefully
will help us tackle that question.
Meantime, there is one area we can speak to, the condition
of personal finances, a topic for which we already have a quantity of recent
information. One of the main causes of
the Great Recession was that people borrowed lots and lots of money. Much of the public commentary about that
recession asserts that financial speculation and bankers brought on the
crisis. Clearly they were important, but
it's also true that people took on more and more debt. Bankers and traders did speculative things
with that debt, but it all did start with the consumers who borrowed the money.
A key, then, to the resumption of
stronger growth is likely related to the progress people are making in
correcting this over-reaching.
Mortgages & Homeowners'
Mortgage debt expanded sharply from the middle of 2001
through 2006, over 13% a year. The
payments on that debt, so-called "debt service", surged from 5.9% of
people's disposable income in 2004 to 7.2% at the end of 2007. People who refinanced mortgages borrowed more
than their existing liability during those years, decreasing the equity they
had in their homes. Overall, this home
equity withdrawal amounted to almost $500 billion a year from 2003 to 2006.
As people were stretching their personal financial
conditions, interest rates began to rise in 2004 and people with adjustable
rate mortgages or initially low "teaser" rates saw their mortgage
payments go up sharply. By late 2006,
unusual numbers of borrowers started having trouble keeping current on their
payments on those and regular mortgages as well. The greater delinquencies hurt the lenders
and the owners of bonds backed by the mortgages. The climb in home sales peaked in 2005, and
they began to decline. Home prices
started to fall in 2006; although those have finally begun to climb again, they
remain well below their 2005/06 highs.
The result, even now, is that 17% of homeowners have a mortgage that is
larger than the value of their home. Called
"negative equity", that's actually an improvement from over 25% in
early 2013 and almost 31% in mid-2012, but remains a heavy weight on people's
approach to spending and their outlook on the economy in general.
Even now, after some recovery, housing and mortgage activity
remain in the doldrums. New home
construction this year is running no more than half the pace of 2005, and sales
of existing homes are still down some 30% from that year's pace. The latest weekly report from the Mortgage
Bankers Association shows a new recovery low last week in the volume of
mortgage applications. People are still staying
back from mortgage debt.
Credit Card Debt
Got Big Too
Another consumer debt issue is credit cards. From the spring of 2006 through early 2008,
credit card balances accelerated; from very modest growth of about 2%
year-over-year in early 2006, they were expanding at a 10% rate by late 2007.
Average credit card balances reached what are, to us,
astounding levels: in 2007, households
in the middle 20% income bracket owed $6,300 and those in the next rung down,
$4,900. Balances were higher, of course,
in higher brackets, so the average over the entire income span was $8,200. If these were charged interest at a common
credit card rate of 1-1/2% a month, the interest add-on each month would have
been $120! Delinquency rates on credit
cards in those years hovered around 9% and rose rapidly during the recession;
they reached 13.74% by the spring of 2010.
Credit card usage did slow.
By last year, the middle income bracket's average had fallen to just
$4,900 and the overall average to $5,700, this latter a reduction of 35% from
its peak. People are paying larger
portions of their bills each month too; from 19% of their balance each month in
2006, people in recent months have been paying almost 25%. The lower balances have obviously accompanied
more sluggish spending growth. In the
2004-2007 period of big increases in credit card balances, spending was
expanding at rates of 6 and 7% a year.
It declined outright in 2009 and has had a modest, uneven pattern since
then. In 2013, people increased their
outlays on categories of items that might be charged to a card by just 3% and
this year's second quarter was up 3.6% from a year earlier, half the pace
during the "spree".
There are numerous reasons for the currently mediocre
performance of the U.S. economy, and one of them is surely this restraint on
credit use. Some of this might be banks
turning down applications, but as we note with the mortgage information, people
are not even applying in much volume in the first place. In view of the excess of the 2004-2007
period, this caution is quite appropriate.
Importantly, it is helping to
improve credit quality; credit card delinquencies in the second quarter were
back down to 2.25%, and those on mortgages are down from a peak of 8.9% in
early 2010 to 3.4% in the latest period.
The better delinquency situation is laying the groundwork
for renewed spending growth on a much sounder basis. Recent retail sales reports suggest this
might be happening. Also, we do note
that people are buying cars these days and obviously borrowing to do that. After a long hiatus, many people's cars and
SUVs have simply grown old and need replacing, so it is not surprising to see
this. It is the only category of
ordinary consumer borrowing with much vigor.
People May Still
Not Be Saving Enough. Are You?
At the same time, there are two issues still to grapple
with: student loans and saving. Student
loans are a whole topic on their own and we will return to talk about them and
the "worth" of incurring big, long-term debt to pay for college. Saving has improved since the Crash and
recession, but continues as a matter of concern.
The saving rate, that is, the amount of personal income not
spent, got as low as 2% during the debt-spree years, reached a band of 6-7% in
2011 and 2012 and recently was 5.3% in the second quarter. So it's clearly up off the lows, but not
"high". Also what isn't
"high" is the number of people who actually have a cautionary stash
of emergency cash under their mattress (or in a safe bank account somewhere) . A special Federal Reserve survey of people's
economic well-being taken during 2013 asked them about this: "Have you set aside emergency or rainy
day funds that would cover your expenses for 3 months?" Only 39% of participants said yes. Further, younger people have a lower positive
response: only 33% of households headed by 18-44 year-old people said yes. There is no history of this for comparison,
so we don't know how low that number would have been during the spending-spree
So we are not surprised that the economy remains relatively
sluggish; we believe some of this reflects the extension of a rebuilding effort
for people's own financial standing.
There are lots of other issues, but that is certainly one that had not
impacted previous business cycles so deeply or pervasively. We've illustrated some progress, though, and
look forward to further improvement.
Meantime, stick a little cash under your mattress every paycheck until
you think you can cover three months' worth of expenses!
A new book, published just in May, encouraged us to give
these ideas some extra emphasis. House
of Debt, by Atif Mian and Amir Sufi, explores mortgage borrowing by zip
code around the country, highlighting the role of the debt itself in generating
the severe recessionary conditions throughout the economy, not just in the
housing sector. The book's subtitle is
"How They (and You) Caused the Great Recession, and How We Can Prevent It
from Happening Again." Hmmm.
We also consulted Stephan Whitaker's "The Evolution of
Household Leverage during the Recovery", an Economic Commentary of the
Federal Reserve Bank of Cleveland, dated September 2, 2014. Whitaker has calculated household debt/income
ratios for census tracts around the country.
Footnotes cover specific data sources. Most of our actual data references come from
these sources as presented in the databases of Haver Analytics.
 Federal Reserve Board, Financial Accounts of the U.S. Equity withdrawal amounts are taken from
calculations made by Haver using those Federal Reserve data.
 Payment rates on credit cards from the Standard &
Poor's Ratings Services' U.S. Credit Card Quality Index (CCQI).
 Data on consumer spending from the Department of
Commerce, Bureau of Economic Analysis (BEA), in the "national income
accounts", that is, the same dataset as GDP and its other components. We calculated a "credit card spending
subtotal" by taking total consumer spending and subtracting off housing
services, education, health care, vehicle purchases and other broad spending
categories that aren't likely to be paid for by charging to a credit card.
 The saving rate is also taken from the BEA's national
Labels: Economy, Financial Markets, Personal Finance