Community Activists And Senator Warren Persuade HUD Sec. Julian Castro To Help Homeowners And Reign In Wall Street Speculators
Community Activists And Senator Warren Persuade HUD Sec. Julian Castro To Help Homeowners And Reign In Wall Street Speculators
Last September 30, community activists and local officials from around the country came to Washington, DC to protest...
Last September 30, community activists and local officials from around the country came to Washington, DC to protest HUD’s pro-Wall Street policies.
Two years ago, community organizing groups around the country, with the key support of Senator Elizabeth Warren (D-MA), began pressuring HUD Secretary Julian Castro to stop selling delinquent mortgages to Wall Street investors and help nonprofit organizations to purchase the loans, help homeowners keep their homes, and expand the supply of affordable housing.
On Thursday, they won. Castro announced a set of policy changes to its Distressed Asset Stabilization Program (DASP) that activists had labeled a “Wall Street giveaway.” Last year, for example, 98% of the mortgages HUD sold went to Wall Street firms, at discounts averaging nearly 50%. Castro pledged to fix the program to triple the sales of delinquent mortgages to nonprofit community groups with experience in stabilizing neighborhoods and helping homeowners and to put more restrictions on foreclosures.
The policy fix was needed because some of the same Wall Street firms that precipitated the housing crash have been buying up distressed housing assets in bulk, including delinquent mortgages and vacant houses that are a product of the crash.
Both Sen. Elizabeth Warren and HUD Secretary Julian Castro are frequently mentioned a potential VP running mates with Hillary Clinton.
The campaign’s victory is the result of a perfect political storm. The organizers mounted a savvy grassroots organizing campaign that built on the momentum of the Occupy Wall Street movement that began in 2011. In the current political season, no politician, especially a Democrat, wants to be too closely identified with Wall Street’s financial industry, which most Americans still blame for the 2008 economic tsunami from which the country still hasn’t recovered. During this presidential season, both Hillary Clinton and Bernie Sanders vied to be the champion of Wall Street reform. HUD Secretary Castro, a former San Antonio mayor, has been auditioning for the role of Clinton’s vice presidential running mate, but many pundits view him as too conservative and cautious — and too pro-business — to help Clinton galvanize both Latino voters and Bernie Sanders’ supporters in the contest with Donald Trump. With his announcement this week, Castro can claim to be on the side of homeowners and communities against Wall Street speculators.
HUD’s DASP program, started by the Obama administration in 2012, became a part of the larger problem by auctioning off its distressed mortgages to the highest bidder, which allowed Wall Street firms to take ownership and accelerate foreclosures.
“This whole process shows just how tilted the playing field is for the big banks and hedge funds,” said Warren, who has been the Senate’s most vocal critic of Wall Street abuses, last year. “Many of these banks and funds were responsible for fueling the housing bubble in the first place — leading to the crash that hit these families like a punch to the gut. Now these same banks and funds are turning around and scooping up these loans at bargain-basement rates so they can profit from them a second time.”
The new HUD policy changes to fundamentally reform the program, resulting in more mortgage pools being sold to non-profits, more foreclosures avoided, and more vacant property turned into affordable housing. The changes include:
Help existing homeowners facing foreclosure remain in their homes by modifying their mortgages to reflect current market values — a strategy called “principal reduction.” Until now, both HUD and Fannie Mae, under pressure from the banking industry, had resisted this approach. Now, even private equity firms and hedge funds will have to use that strategy in reworking troubled mortgages.
Increasing the sale of HUD’s distressed mortgages to non-profit organizations
A commitment to work with local governments and non-profits to target sales to those who will help homeowners keep their houses and expand the supply of affordable housing.
Far greater provisions for transparency in the sale process
“These recent HUD changes move in the direction of common sense policy,” said Maurice Weeks of the Center for Popular Democracy, one of the groups that coordinated the nationwide grassroots campaign. “We shouldn’t be handing over our neighborhoods at bargain basement prices to Wall Street.”
“HUD’s bulk mortgage sale program has been fueling the speculator buy-up of our neighborhoods,” observed San Francisco Supervisor John Avalas, one of many local elected officials who supported the campaign. “Finally, HUD is making changes to this mortgage sales program that better prioritize what our communities need — saving more homes from foreclosure and creating more affordable housing. It’s about time!”
Sarah Edelman, director of housing policy for the Center for American Progress and coauthor of a new report on the problem, told the New York Times that the policy changes “significant improvements” in the loan sale program.
“The policies announced today are a promising step toward more responsible loan auctions,” she said.
Millions of homeowners are still delinquent on the mortgage payments, many through no fault of their own, but because of predatory and reckless lending practices as well as the sluggish recovery of the economy in terms of restoring the incomes of working families. As a result, federal officials and community activists expect there to be many more sales of troubled mortgages that were guaranteed by the federal government.
The policy changes are a culmination of several years of research and activism by grassroots groups on the front lines of the nation’s housing and banking crisis.
Several years ago, different community groups began noticing the growing presence of Wall Street speculators in their neighborhoods, one of the aftershocks of the epidemic of foreclosures. Several local groups examined records, interviewed tenants, and issued reports documenting that in areas where Wall Street investors own a significant number of these single-family homes — including Atlanta, Las Vegas, Phoenix, Miami, Tampa, Orlando, Charlotte, Dallas, Chicago, Detroit, Denver, and Los Angeles and nearby Riverside — their practices have harmed tenants and undermined long-term neighborhood stability.
The activists discovered that HUD, Fannie Mae, and Freddie Mac — which own or guarantee the distressed mortgages on many single-family homes — were part of the problem. Over the past few years, they’ve auctioned off about 150,000 non-performing loans that they want to get off their books. Of these loans, fewer than two percent have gone to nonprofit buyers. The rest (98 percent) have gone to Wall Street companies. As of last fall, five Wall Street firms — Lone Star, Blackstone Group, Angelo, Gordon & Co., Selene Residential Partners, and the Royal Bank of Scotland — accounted for 64 percent of all the public loan sales. Last year, Goldman Sachs popped up on the purchaser list for the first time, buying loans from Freddie Mac.
The community organizers and their researchers also exposed a double standard. Although Fannie Mae and Freddie Mac have been unwilling to offer principal reduction to struggling homeowners, and HUD has been unwilling to require principal reduction as part of its program, these agencies often offer steep discounts when they sell these mortgages to Wall Street speculators, who typically foreclose on the homeowners, adding to their inventory of homes scooped up in private foreclosure sales. In unloading these mortgages, the federal agencies often ignored the housing needs of local communities.
The grassroots groups enlisted the help of two national umbrella organizations — the Center for Popular Democracy (a network of community organizing groups) and Local Progress (a network of progressive local elected officials) — as well as Senator Elizabeth Warren, who championed the cause in Congress. These used a variety of tactics — protest actions, internet petitions, and muckraking research — to generate media attention and put pressure on the Obama administration.
These groups — many of which had been working on banking issues for over a decade — launched their national campaign in September 2014. They were relentless in pressuring HUD, Fannie Mae and Freddie Mac to prioritize non-profits over speculators in their sales of troubled mortgages. In particular, they demanded that these agencies prioritize sales to non-profit Community Development Finance Institutions (CDFIs) that have the capacity to purchase large inventories of underwater mortgages and distressed properties — including vacant houses that owners lost through foreclosure and occupied homes where underwater borrowers are on the brink of foreclosure — and stabilize them as affordable housing. The CDFIs were being crowded out by hedge funds working hand in hand with HUD, Fannie Mae, and Freddie Mac.
At the start of the campaign, the activists released a report, Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities, that explained why HUD’s policy of favoring Wall Street investors was exacerbating the nation’s housing crisis.
A week before Christmas in 2014, at rallies outside local HUD offices, community groups in Los Angeles, San Francisco and Boston presented HUD with their “Grinch of the Year” award for refusing to fix the DASP program.
“By auctioning pools of delinquent loans to the highest bidders — vulture capitalists — HUD is driving unnecessary foreclosures and contributing to the rise of ‘Wall Street Landlords,’” said Gisele Mata, an organizer with the Alliance of Californians for Community Empowerment, a statewide organizing group that played a key role in the national campaign, at the press conference.
In June 2015, the campaign released another report, Do Hedge Funds Make Good Neighbors? How Fannie Mae, Freddie Mac and HUD are Selling Off Our Neighborhoods to Wall Street, at a protest rally in front of the Santa Monica office of the Blackstone Group, the private equity giant (with over $300 billion in assets under management), which had become the largest landlord of single-family rentals in the country by gobbling up distressed mortgages - including many sold by HUD — at bargain-basement prices. Since 2012, the report found, federal agencies had sold over 120,000 delinquent mortgages to Wall Street hedge funds and private equities firms. Bayview Acquisitions, largely owned by Blackstone, has bought 24,000 of these mortgages. The report unearthed an array of disturbing business practices, including failure to make repairs and the harassment and illegal eviction of occupants. An investigation by the New York Times published last week confirmed earlier findings of abusive practices. The Times revealed, for example, that Lone Star had pushed thousands of borrowers into foreclosure and failed to negotiate with homeowners to modify their mortgages so they could remain in their homes.
Through Local Progress and 17 progressive mayors from across the county,, the campaign persuaded the U.S. Conference of Mayors to pass resolution asking HUD to change its policy.
Last September, community activists and local elected officials from around the country converged in Washington, D.C. to bring the cause directly to federal officials. After a rally at which Senator Warren and Congressman Michael Capuano (D-Mass) demanded that HUD curb its mortgage sales to Wall Street investors, the activists met with senior officials at HUD and the Federal Housing Finance Agency, which oversees the mortgage giants Fannie Mae and Freddie Mac. A few weeks later, the New York Times published an editorial, “Foreclosure Abuses, Revisited,” calling on HUD to suspend its sales of distressed mortgages until federal agencies adopt significant reforms.
By March of this year, the campaign had built enough momentum to get 45 members of Congress to send a letter to HUD and FHFA in support of the campaign’s demands.
In April, Rep. Raul Grijalva (D-Arizona) wrote to Castro - by then on many lists of potential vice presidential candidates - criticizing HUD for worsening the housing crisis with its favorable treatment of Wall Street investors and urging him to “end to the days of casino-level gambling with other peoples’ livelihoods.” That same month, the campaign sent Castro a petition with over 100,000 signatures, demanding that he change HUD’s policies on disposing troubled mortgages.
Along with the changing political climate and Castro’s ambitions, the community organizing groups’ persistence paid off.
With more homes in the hands of non-profits instead of Wall Street speculators, communities will gain further control over their neighborhoods and be less at the mercy of Wall Street. Community groups now plan to work city by city, and state by state, to make sure that HUD sells delinquent mortgage pools to mission-driven purchasers, and to continue the fight for housing justice and community control to strengthen and protect neighborhoods across the country.
By PETER DREIER
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THE BUZZ 4: Federal Face Time
JACKSON HOLE, WY – Last Thursday was the first time the most powerful financial players in the U.S. formally met with...
JACKSON HOLE, WY – Last Thursday was the first time the most powerful financial players in the U.S. formally met with the people their policies affect. During the Federal Reserve Economic Policy Symposium at Jackson Lake Lodge, a meeting between the Fed and Fed Up sparked impassioned speeches that burned through barriers of language, culture, race, and socio-economic status. But the fervency expressed by Fed Up members seemingly had little influence on the Fed’s impending decision to raise interest rates, something Federal Reserve board chair Janet Yellen announced in her annual address the following day.
Still, members of Fed Up—a syndicate of the Center for Popular Democracy built around the ideology that the Fed’s policies affect people of every skin color and income bracket—were encouraged by the meeting.
Shawn Sebastian is the field director of the Fed Up campaign. “I think the meeting with the Fed was historic and unprecedented,” he said. “There are never that many Fed officials in the same room at the same time talking about monetary policy, and they’re certainly not doing that with low income people of color.”
Federal Reserve board leaders like Neel Kashkari, Lael Brainard, Esther George and board vice president Stanley Fischer all participated in the Fed Up roundtable.
The landmark meeting was the result of Jackson Lake Lodge overselling hotel rooms that Fed Up members had reserved. After the group filed several federal complaints, the Fed agreed to the sit down.
‘Don’t slow down the economy’
Echoes of agreement among Fed Up’s constituency rippled through the crowded room at Jackson Lake Lodge Thursday as the roundtable began. Members of Fed Up elucidated ideas of stagnant wages, unemployment, and underemployment that disproportionately plague people of color in the United States. Fed Up members explained how the Federal Reserve’s pending decision to slow down the economy by raising interest rates could damage already neglected communities. Nearly every speaker from Fed Up concluded with one central idea: Don’t slow down the economy. Not yet. Don’t hike interest rates. Not yet. Our communities are still underserved. Our people are still underpaid. Our unemployment rates are still nearly double the national average.
Esther George, chair of the KC Federal Reserve, responded to protestors with deference to Congress. “Our objective is to follow mandates of what Congress has made out,” she told the crowd. “The objective is not to slow down the economy; that would be irresponsible.” George continued by explaining that the objective of the Fed was to walk the balance beam between the ideal of full employment and the consequence of potential inflation due to an oversaturation in the job market.
Fed Up’s expert on economic forces, Josh Bivens of the Economic Policy Institute, said the Fed’s concerns about inflation should be adjusted in light of the impacts of the Great Recession. Bivens claimed a period of “overshooting” employment targets are necessary to heal the effects of that economic disaster, and that this period of overshooting is especially important to people of color, because it takes longer for their unemployment rates to catch up to national averages.
“[If] The Federal Reserve starts slowing the economy, it starts halting progress in reducing unemployment before the benefits of that reach the last people to be hired,” Bivens said.
Promising diversity
Fed Up seemed to impact members of the Federal Reserve Board on a few fronts. Several ambitious promises were made by members of the Fed, catalyzed by discussions held during the roundtable. Sebastian believes the most concrete impacts Fed Up had on the Federal Reserve were when Lael Brainard of the Federal Reserve’s board of governors committed to seriously considering a slate of candidates for board positions that more closely reflect America’s diversity. The board’s lack of diversity is a source of contention among Fed Up members, as the board is comprised of 16 white, predominantly male members. The only exception is Neel Kashkari of the Minneapolis Federal Reserve Bank, who is of Indian descent. Fed Up members are not the first to point this out, however. This summer a formal letter of complaint, signed by Bernie Sanders, Elizabeth Warren and some 127 other lawmakers, demanded the Federal Reserve open up to more diversity.
Another victory for the Fed Up campaign happened when Kashkari recommitted to an impressive research project studying racial disparities. Minnesota and Wisconsin, both states within Kashkari’s district, are rated the worst states in the country for black people to live based on a report by 24/7 Wall Street. Kashkari’s goal is to find the source of the disparities that propagate those statistics.
Blacks in Wisconsin face an unemployment rate of 21 percent which is more than quadruple the national average. Their incarceration rate is the third highest in the country, and their rate of home ownership is the tenth lowest. At a meeting earlier this month in Minneapolis, Kashkari sat down with Neighborhoods Organizing for Change to discuss the problem.
“Some of the racial disparities are a crisis, and we need to treat them like a crisis,” Kashkari said. “There’s something structural in the U.S. economy, in good times and bad, that black unemployment is almost always twice as high as white unemployment.”
However, in spite of all protestor efforts, in what is considered to be one of Federal Reserve Board Chair Janet Yellen’s most important speeches of the year, she explicitly stated that interest rate hikes were on the horizon. Yellen told the audience at Jackson Lake Lodge, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.” PJH
By Natosha Hoduski
Source
Hot topic of next Fed chair not on program at Jackson Hole
Hot topic of next Fed chair not on program at Jackson Hole
JACKSON HOLE, Wyo. — This year’s gathering of the world’s central bankers had a theme as lofty as the Grant Teton...
JACKSON HOLE, Wyo. — This year’s gathering of the world’s central bankers had a theme as lofty as the Grant Teton Mountains which loomed over their meeting place — “Fostering a Dynamic Global Economy.”
But while many hours were devoted to sitting in a windowless conference room dissecting the symposium’s academic papers on how to bolster lackluster global growth, one hot topic was not on the program — who will President Donald Trump nominate to be the next leader of the Federal Reserve once current Chair Janet Yellen’s four-year term is up next February.
Read the full article here.
Más obreros hispanos de la construcción mueren en el trabajo a nivel nacional
Univision National – October 25, 2013 - Los activista y expertos están poniendo en tela de juicio la seguridad de...
Univision National – October 25, 2013 -
Los activista y expertos están poniendo en tela de juicio la seguridad de los trabajadores de la construcción en Nueva York, además, un estudio revela que los hispanos tienen el mayor porcentaje de accidentes de trabajo en ese sector de la ‘gran manzana’.
¿Qué opinas sobre la situación de los hispanos que se dedican a la construcción?
En Nueva York, anualmente 75 trabajadores de construcción mueren por accidentes, una cifra que a nivel nacional supera los 4 mil, reportó Blanca Rosa Vílchez a Univision.
El 41 por ciento de los trabajadores de construcción en Nueva York son latinos; sin embargo, cuando se habla de accidentes, significan el 74% de los muertos, una estadística que en sí refleja la magnitud del problema.
Líderes comunitarios exigen soluciones
En el mismo lugar en el que un trabajador de construcción fue la última víctima mortal de un accidente, la organización que realizó el estudio y líderes comunitarios discutieron los grandes riesgos a los que se exponen diariamente estos trabajadores.
“Había momentos en que el jefe le decía que tenía que subir a una determinada altura y él no estaba acostumbrado a eso y tenía que hacerlo porque eran órdenes del jefe”, aseguró Elsa Ramos, madre de un trabajador.
Una multa para los contratistas no supera los 2 mil dólares y la muerte de un trabajador los 12 mil, además se presentó un proyecto para eliminar lo que se conoce como la “ley del andamio”.
Muchos casos no se denuncian
“Quieren hacer ese cambio para que los trabajadores no puedan seguir juicio contra una compañía de construcción aunque haya violaciones, nosotros tenemos que seguir previniendo que se haga ese cambio”, mencionó Francisco Moya, asambleísta.
Sin embargo, muchos casos ni siquiera se reportan por temor de los trabajadores.
“Ya me hicieron cirugía de la nuca en 2010 y me hicieron cirugía de la espalda en diciembre de 2012, todavía tengo dolor, ese dolor lo voy a tener toda mi vida”, afirmó Pedro Corchado, trabajador accidentado.
Otro caso es el de Francisco, quien no ha vuelto a trabajar desde que se cayó de una altura de 11 pies, la compañía para la que trabajaba dice que le dio sólo horas de entrenamiento.
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Small Business Hiring is Swinging Higher
CBS News - March 3, 2015, by Jonathan Berr - Want another sign of the economic rebound? Small-business hiring is on the...
CBS News - March 3, 2015, by Jonathan Berr - Want another sign of the economic rebound? Small-business hiring is on the rise.
The Paychex/IHS Small Business Job Index posted a 0.19 percent monthly increase in February, rising to 100.84. That follows January's 0.09 percent gain and marks the second straight month of advances. On a year-over-year basis, the index, which measures hiring at businesses with 50 or fewer workers, slipped 0.31 percent.
"Small businesses are off to a solid start in 2015 when it comes to job growth," said Martin Mucci, president and CEO of Paychex, in a press release. "While it's still early in the year, the first two months have seen consistent positive improvement."
Nationally, signs of increased small-business hiring abound. Only two regions that were measured in February showed a decline, and 13 of the 20 states analyzed have index levels topping 101. The Pacific Region had the best performance in February, while New England, which has gotten pounded this winter with record-setting snowfall, showed the worst one-month performance.
Indiana edged out Texas and Florida to become the leading state for small-business hiring, and Dallas led all metropolitan areas.
The index is calculated using aggregated small-business payroll data on 350,000 small businesses and with a base year of 2004 because it was a period of expansion before the start of the economic downturn. Although politicians often refer to small businesses as an engine of economic growth, economists have disputed this notion in recent years.
Nonetheless, the report does underscore positive job market trends. During 2014, 37 states and the District of Columbia showed statistically significant improvements in employment. Texas had the largest gains (457,900), followed by California (320,300) and Florida (230,600). The biggest job losses were in Minnesota (5,200), Idaho (1,700) and New Mexico (1,600). The strengthening continued in January, when the nation's overall unemployment rate slipped to 5.7 percent.
According to the Federal Reserve, economists believe the "long-run normal" unemployment rate would be between 5 percent and 6 percent over the next five to six years in the absence of "shocks."
Jobless rates for certain categories of workers, though, remain stubbornly high. Unemployment for Millennials, for instance, was 14 percent as of January. According to Fivethirtyeight.com, this generation is poorer than people their age were in 1989 because so many are deeply indebted with student loans and are less likely to own a house.
The national jobless rate for African-Americans was 10.3 percent in January. In the two-thirds of states for which data are available, the median real wages of African-Americans fell between 2000 and 2014, while pay for whites rose 2.5 percent during the same period. Two liberal think tanks, the Center for Popular Democracy and the Economic Policy Research Institute, argued in a report released today that these job-market disparities indicate the Federal Reserve should resist pressure to raise interest rates.
"America needs the Federal Reserve to concentrate on labor market stability and ensure that wages are rising with productivity, so that workers reap the benefits from their efficiencies and hard work; that means prioritizing a wage growth target, rather than inflation," the report said. "A Federal Reserve dominated by banks and major corporations will produce an economy that works for them, at the risk of leaving tens of millions of working families -- particularly Black working families -- with little hope of a better life."
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House Republicans face voters in home districts angry over health care bill
House Republicans face voters in home districts angry over health care bill
Rep. Tom Reed of New York, who was among the Republican members of Congress to vote for a bill to repeal and replace...
Rep. Tom Reed of New York, who was among the Republican members of Congress to vote for a bill to repeal and replace Obamacare, held a string of hometown forums on Saturday where he was lambasted by crowds of angry voters and signs that read, "GOP Disaster" and "Why do you want to kill my daughter?"
Reed, whose district in upstate New York includes the cities of Ithaca and Corning, held three town hall meetings where the overwhelming majority of attendees had questions about health care. The congressman was met with boos and jeers throughout the forums, with people repeatedly chanting "Shame!" and "Vote him out!"
Get the full story here.
Warren says Toys 'R' Us investors should augment worker fund
The toyseller's former private-equity owners said they were forming the fund on Tuesday after months of pressure from...
The toyseller's former private-equity owners said they were forming the fund on Tuesday after months of pressure from former employees and their representatives, along with some public pension funds and lawmakers including Warren, a former Harvard Law School bankruptcy expert who is considering a run for president in 2020. The groups, linked to the Center for Popular Democracy, estimate that workers are owed $75 million in severance pay, and they've also pressed Toys "R" Us creditors including Solus to pitch in.
Read the full article here.
Americans Don’t Miss Manufacturing — They Miss Unions
Filed under In Real Terms This is In Real Terms, a column analyzing the week in economic news. Comments?...
Filed under In Real Terms
This is In Real Terms, a column analyzing the week in economic news. Comments? Criticisms? Ideas for future columns? Email me or drop a note in the comments.
U.S. manufacturing jobs, I argued a few weeks ago, are never coming back. But that doesn’t stop politicians from talking about them. Donald Trump scored his knockout blow in Indiana in part by railing against the decision by Carrier, a local air-conditioning manufacturer, to shift production to Mexico. Bernie Sanders and Hillary Clinton have sparred throughout their race over who would best protect manufacturing jobs. And the man they are all trying to replace, President Obama, pledged during his reelection campaign to create a million manufacturing jobs during his second term; he’s still about 700,000 jobs short of that goal.
Candidates talk about manufacturing because of what it represents in the popular imagination: a source of stable, well-paying jobs, especially for people without a college degree. But that image is rooted more in nostalgia than in reality. Manufacturing no longer plays its former role in the economy, and not only because there are far fewer factory jobs than in the past. The jobs being created today often pay less than those of the past — sometimes far less.
A new report this week from the Labor Center at the University of California, Berkeley, found that a third of production workers — non-managers working on factory floors and in related occupations — earn so little that their families receive some form of public assistance such as food stamps or the Earned Income Tax Credit. Many of those workers are temps, who account for a growing share of factory employment. The median wage for a manufacturing production worker, according to separate data from the Bureau of Labor Statistics, was $16.14 an hour in 2015, below the $17.40 an hour for all workers.
On average, manufacturing jobs still pay better than most jobs available to people without a college degree. The median manufacturing worker without a bachelor’s degree earned $15 an hour in 2015, a dollar more than similarly educated workers in other industries.1 But those averages obscure a great deal of variation beneath the surface. Average manufacturing wages are inflated by high-earning veterans; newly created jobs tend to pay less. And there are substantial regional variations. The average manufacturing production worker in Michigan earns $20.80 an hour, vs.$18.86 in South Carolina, according to data from the Bureau of Labor Statistics.
Why do factory workers make more in Michigan? In a word: unions. The Midwest was, at least until recently, a bastion of union strength. Southern states, by contrast, are mostly “right-to-work” states where unions never gained a strong foothold. Private-sector unions have been shrinking across the country for decades, but they are stronger in the Midwest than in most other parts of the country. In Michigan, 23 percent of manufacturing production workers were union members in 2015; in South Carolina, less than 2 percent were.2
Unions also help explain why the middle class is healthier in the Midwest than in the Southeast, where manufacturing jobs have been growing rapidly in recent decades. A new analysis from the Pew Research Center this week explored the state of the middle class in different parts of the country by looking at the share of households making between two-thirds and double the national median income, after controlling for the local cost of living. In many Midwestern cities, 60 percent or more of households are considered “middle-income” by this definition; in some Southern cities, even those with large manufacturing bases, middle-income households are now in the minority.
Even in the Midwest, however, unions are weakening and the middle class is shrinking. In the Indianapolis metro area, where the Carrier plant Trump talks about is located, the share of households in the middle tier of earners has shrunk to 54.8 percent in 2014 from 58.9 percent in 2000. And unlike in some parts of the country, the decline in the middle class there has been primarily driven by people falling into the lower tier of earners, not moving up. The Carrier plant, where workers make more than $20 an hour, is unionized.
Cause and effect here is complicated. Unions have been weakened by some of the same forces that are driving down wages overall, such as globalization and automation. And while unions benefit their members, economists disagree over whether they are good for the economy as a whole. Liberal economists note that overall wages tend to be higher in union-friendly states; conservative economists counter that unemployment tends to be higher in those states, too.
But this much is clear: For all of the glow that surrounds manufacturing jobs in political rhetoric, there is nothing inherently special about them. Some pay well; others don’t. They are not immune from the forces that have led to slow wage growth in other sectors of the economy. When politicians pledge to protect manufacturing jobs, they really mean a certain kind of job: well-paid, long-lasting, with opportunities for advancement. Those aren’t qualities associated with working on a factory floor; they’re qualities associated with being a member of a union.
#FedSoWhite
When the Federal Reserve’s policy-making Open Market Committee meets next month to decide whether to raise interest rates, every one of the 10 voting members will be white. Eleven of the 12 regional Fed bank presidents, who rotate voting responsibility, are white, and not one is black or Latino. (Minneapolis Fed President Neel Kashkari is Indian-American.) The Fed does a bit better when it comes to gender balance — Chair Janet Yellen is a woman, as are three other voting FOMC members. But overall, the people making U.S. monetary policy are disproportionately white men.
Does that matter? More than 100 members of Congress think so. In a letter to Yellen on Thursday, 11 senators and 116 members of the House of Representatives — all of them Democrats — wrote that they are “deeply concerned that the Federal Reserve has not yet fulfilled its statutory and moral obligation to ensure that its leadership reflects the composition of our diverse nation.” The letter is only the latest effort to draw more attention to the Fed’s lack of diversity: A report earlier this year from the liberal Center for Popular Democracy highlighted the issue, and several members of Congress also asked Yellen about it when she testified on Capitol Hill in February. (Bernie Sanders signed the letter. Hillary Clinton, who wasn’t eligible to sign since she isn’t in Congress, said she agreed with the message.)
It isn’t clear whether policy would be any different if the Fed were more diverse. But the letter writers and their allies argue that at the very least the Fed’s lack of representation could be skewing the way policymakers view the economy. By law, the Fed must balance two competing goals: maintaining stable prices (which the Fed defines as inflation of about 2 percent per year) and promoting full employment. In recent months, Yellen and her colleagues have begun the process of raising interest rates — concluding, in effect, that with the unemployment rate down to 5 percent, the “full employment” part of their mandate is largely complete. But the unemployment rate for African-Americans was 8.8 percent in April, as high as the white unemployment rate was in the middle of the recession. For them, “full employment” remains a long way off.
The long road back
Last week I noted that Americans who graduated from college during the recession are still struggling to make up for the slow start to their careers. The Wall Street Journal this week told the even more harrowing tale of people who lost jobs during the recession, many of whom still bear deep financial and psychological scars.
That isn’t surprising. Losing a job is a significant setback in any context, but it is far worse when a bad economy makes it hard to get back to work quickly. People who are laid off in a recession are far more likely to become unemployed for more than six months, which can then make it harder to find a job even once the economy improves. One estimate cited by the Journal found that people who lose jobs during a recession continue to make 15 to 20 percent less than their peers who kept their jobs, even a decade or more after the recession ended. And that is just in the typical recession; the most recent downturn was far worse.
Number of the week
Just under 8 million Americans were looking for work in March, and employers had 5.8 million jobs available to be filled. Economists look at the ratio of those numbers as a gauge of the health of the labor market, and by that measure, the economy is looking good: There were 1.4 unemployed workers for every open position in March, the fewest since 2001.
Don’t take the workers-per-job ratio too literally, though. The official definition of “unemployment” leaves out plenty of people who want jobs, and the government count of job openings is also incomplete, counting only positions for which companies are actively recruiting. But alternative measures of both unemployment and openings show the same trend: There are more jobs and fewer workers to fill them. That’s good news for workers who want jobs, and also for those who already have them — at some point, companies that want to attract workers will have to start offering higher pay.
Elsewhere
Americans are having fewer babies. Janet Adamy looks at the causes and consequences of the U.S. “baby lull.”
Eduardo Porter argues the government should do more to create good jobs for those displaced by the transition toward a service-based economy.
Timothy O’Brien, who saw Donald Trump’s tax returns as part of a lawsuit a decade ago, provides some hints as to what voters might learn if Trump ever releases the documents publicly.
Lam Thuy Vo and Josh Zumbrun dive into the data on the jobs created since the start of the recession.
In much of the country, poor people don’t have access to broadband internet, according to a Center for Public Integrity investigation.
By Ben Casselman
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Jackson Hole Summit To Provide Forum For Policymakers Amid Market Turmoil
Also getting under way at the lodge is a protest conference organized by the Center for Popular Democracy, a liberal...
Also getting under way at the lodge is a protest conference organized by the Center for Popular Democracy, a liberal group that has been cajoling the Fed to hold off on raising interest rates. Some researchers, for example, argue that “core inflation” – which strips out food and energy prices and is often used by bankers as their preferred gauge – may be less relevant in a world where futures contracts, global shipping and worldwide trade help even out retail level price swings for some of those goods.
Some analysts have also said that globalization has been a factor in holding down U.S. wages and prices even at times of solid growth.
When the Fed met in June, US oil prices had recovered to over $60 a barrel, and there had been a belief that we’d seen the lows.
Inflation has been a concern for the Fed, as it has been running well below its 2 percent goal and some signs have indicated that it may fall further. London Business School professor Lucrezia Reichlin is the discussant. Yet the theory is still a useful framework to think about monetary policy. This year central bankers, finance ministers, academics and financial market participants will chewing over why inflation is so low, whether this is unsafe and what they can do about it. Investors have cut the probability of a move at that gathering to 28 percent Tuesday from 48 percent on August 18 based on trading in fed funds futures.
They confront a big disparity between the world’s two largest economies, the U.S. and China.
China’s stock market is swooning and its economy slowing.
Goldman Sachs economists wrote Wednesday that they “expect liftoff in December, and see the recent market sell-off as another argument against a hike in September“.
U.S. counterparts will experience both advantages and disadvantages if their currencies behave according to textbooks and their currencies weaken against the dollar if the Fed raises rates.
Dudley said a final decision would reflect how the market acts over the next few weeks, as well as the end-of-montheconomic data.
The absence of Yellen and Draghi has lowered expectations for a major policy announcements at Jackson Hole.
The official roster of attendees at the invitation-only event included Fed Vice Chairman Stanley Fischer and Fed governors Lael Brainard and Jerome Powell, and presidents from eight of the 12 regional Fed banks. “So you look around the world and ask who can take up the slack, and really the answer is nobody”, said Kevin Logan, chief U.S. economist at HSBC Securities, in New York.
The opening session at 10 a.m. Eastern will examine a paper on “Inflation dynamics though firms’ pricing behavior” by Simon Gilchrist, a professor at Boston University and Egon Zakrajsek, an associate director for monetary affairs at the Fed Board of governors.
The vice chairman is considered extra inclined than Yellen to boost charges prior to later, so his statements might make clear how the talk contained in the central financial institution might transpire when officers meet September 16 and 17.
Source: Rapid News Network
Voting rights restored to 40,000 Marylanders
Source: ...
Source: The Baynet.com
The Maryland General Assembly overrode Governor Larry Hogan’s veto today on a bill that restores voting rights for approximately 40,000 Maryland citizens who live in their communities but were barred from voting because of a criminal conviction in their past. The law will go into effect on March 10, 2016 allowing all former felons who are out of prison to register and vote in Maryland’s upcoming April local and federal primaries.
Maryland law withheld the right to vote from individuals until they fully completed every requirement of their sentence, including those beyond incarceration, like probation and parole supervision. SB 340/HB980, introduced by Sen. Joan Carter Conway (D-Baltimore) and Del. Cory McCray (D-Baltimore), simplifies the process by allowing an individual to become eligible to vote upon release from prison or if they were never incarcerated.
After the law takes effect on March 10, affected Marylanders will have until April 5 – less than a month -- to register to vote in the April 26 primaries. New voters can also register through same-day registration during the early voting period of April 14 – 21. There will be at least 59 early voting centers throughout the state.
The bill was championed the Unlock the Vote coalition, led by Communities United with Out for Justice, the ACLU of Maryland, Common Cause Maryland, Maryland Working Families, MD State Conference of the NAACP, Maryland League of Women Voters, 1199SEIU United Healthcare Workers East, SEIU Local 500, SEIU 32BJ, SEIU Maryland & DC State Council, Prison Ministry Task Force of the Episcopal Diocese of Maryland, the Job Opportunities Task Force, the Center for Popular Democracy, Brennan Center for Justice, the Sentencing Project, the National NAACP and the NAACP National Voter Fund, Communication Workers of America, SAVE Our Votes, Colorofchange.org, People for the American Way, the Democracy Initiative, the American Probation and Parole Association and Common Cause.
“The Maryland General Assembly has opened up our democracy to the thousands of Marylanders who have returned home from prison and now have the right to vote. I know from experience that this legislation will have a powerful impact on our lives and in our communities,” said Perry Hopkins, a formerly incarcerated citizen and organizer with Communities United. “From the minute you are released from prison, you pay taxes, you are working to reintegrate back into society in a productive way and you deserve the full rights of citizenship. It’s just that simple. And today the Maryland General Assembly did the right thing and restored our rights.”
“Today’s override is a huge step forward for voting rights in Maryland. Governor Hogan suppressed the vote for an additional eight months with his veto so our next challenge is to quickly educate and register voters for the upcoming April 26 local and federal primaries” said Jane Henderson, executive director of Communities United. “Because of the confusing nature of the previous law, there is a lot of misinformation about if and when those with felonies can register and vote. We want all former felons to know that if you are home, you can vote. We have a short window of opportunity in March to reach and register newly enfranchised voters – whether in church, on the job, at recovery centers, at parole offices or in our neighborhoods – and we call on civic, civil rights and religious leaders to help us to reach these 40,000 newly enfranchised citizens."
“This is a victory for civil rights that comes at a critical moment for our state and our nation,” said Gerald Stansbury, President of the Maryland State Conference of the NAACP. “Today 40,000 Marylanders who have been locked out of the process by an unfair law and an unjust criminal justice system have regained a fundamental right of citizenship, the right to vote. The majority of citizens regaining their voting rights are African American and it has never been more important that their voices are heard in local government, the halls of the State House and by our federal representatives. I am grateful to the Maryland General Assembly for restoring the right to vote.”
“Democracy is on the march in Maryland. The Maryland General Assembly’s vote to restore the right to vote of more than 40,000 ex-offenders comes at a critical time for our democracy,” said Emma Greenman, Director of Voting Rights and Democracy at the Center for Popular Democracy. “Over 50 years after the passage of the Voting Rights Act, nearly 5.8 million Americans remain shut out of the democratic process because of a criminal conviction. Today Maryland unlocked the vote for folks reintegrating into their communities and lifted up their voices in our democracy.” “We’re seeing growing national momentum for voting rights restoration, and Maryland is the latest place to join in on this trend,” said Tomas Lopez, Counsel at the Brennan Center for Justice at NYU School of Law. “This legislation will give 40,000 Marylanders a second chance.”
The measure builds on recent bipartisan support for rights restoration around the country. Last year, U.S. Attorney General Eric Holder called on states to restore voting rights. Supporters from across the political spectrum have introduced bills in Congress to restore rights, including the Civil Rights Voting Restoration Act of 2015 from U.S. Sen. Rand Paul (R-Ky.) and the Democracy Restoration Act of 2014 from U.S. Sen.Ben Cardin (D-Md.) and U.S. Rep. John Conyers (D-Mich.).
Over the past two decades, more than 20 states have improved their criminal disenfranchisement laws, including Maryland, which ended lifetime disenfranchisement in 2007. Like similar laws elsewhere in the United States, Maryland’s criminal disenfranchisement law has disproportionately impacted racial minorities. It is estimated that African Americans have comprised more than half of Maryland’s disenfranchised population. When the rights restoration bill becomes law, Maryland will be the newest addition in the national movement to restore voting rights to people who are released from prison, joining 13 states and the District of Columbia.
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