American Winter Revisted as we discuss minimum wage and unemployment

Last March, I wrote a post about a terrific documentary called “American Winter” which tracked eight families who had become impoverished in Portland. “American Winter” does an excellent job of putting a face on people who are struggling. Attached is the post, which will link you to more information on the documentary.

https://musingsofanoldfart.wordpress.com/2013/03/23/american-winter-clearly-defines-that-what-poverty-looks-like/

Let me state a few comments that need to be said time and time again, as political groups have a tendency to make broad brush comments based on the anecdotes of a very few. Like many problems, the issues are complex and varied depending on your circumstances and require holistic problem-solving and not some group painting a simplistic view of the problem and, as a result, not providing a holistic solution.

– We have a poverty problem in this country with far too many people in poverty or living paycheck-to-paycheck.

– Poverty is an equal opportunity offender impacting all political persuasions, races, genders, and ethnic groups; in fact, most people in poverty are white. I mention this only because some unenlightened folks have a firm belief that it is only those “other” groups of people who are needing help. Poverty affects all of us.

– In America, we have fallen in terms of global rankings in social mobility, so where you were born and to whom you were born matter a great deal. Per Warren Buffett, one of the richest people on the globe, “I was born lucky – a white man in America.” This impacts education, opportunity, networking, etc. He said he took advantage of his opportunities, but started off with a leg up.

– Minimum wage jobs perpetuate poverty. You are a slave to the scheduler, you eat poorly, you tend to have jobs on your feet, you cannot afford healthcare (Obamacare will help in this regard), and you must have good transportation options to get to and from work. Our minimum wage is behind where it needs to be when you trend forward with wage inflation the amounts from the 1960s. It is also lags a living wage for an individual. Opponents say an increase would impact jobs. I have seen data on both sides of this issue. If a retailer can reduce turnover by paying people a better wage, it actually will aid in productivity. But, let me state something obvious – almost every one of us has felt exploited by an employer on how much we should be paid. A minimum wage job is no different, with a huge exception that you don’t make enough to live on.

– Unemployment benefits and food stamp aid do not put anyone in the lap of luxury. These are designed to help people in need. I understand fully that unemployment benefits cannot go on forever, but while the economy has improved, there are many who are still disenfranchised. Some of those people were parts of Reduction in Forces (RIFs) where people in their fifties were laid off due to higher salaries and with a changing business model. Some were laid off to pay for the sins of their leaders who made poor business decisions. The leader cuts expenses to pay for the write-offs from bad decisions and then rides off with a golden parachute while the people RIFed get screwed.

On the flip side, some good things are happening. The economy has inched forward over the last three years and prospects look good. I have told my son it is not like you hit a switch and say everything is better. Yet, much of the recovery has not “trickled down” to everyone. So, we need to make that happen. Our President is a target for many criticisms, some of which are justified, but some things he should get some credit for is promoting greater investment in our community college system and emphasizing the increase in exports over the last three years, which have been occurring.

These are the kinds of investments which we need along with other infrastructure investments. For example, the dredging of southeast coast harbors to allow for bigger ships coming through a deeper and wider Panama Canal, is something that will promote trade and help with job creation. As an Independent voter we seem to hide these investments rather than celebrate in them. My Republican friends are surprised when I tell them the “failed stimulus” that they use as campaign mantra in 2012 was untrue – the stimulus package actually worked so says six econometric firms, it just was not enough. My Democrat friends would be surprised to learn that under Obama we are more energy independent than before; we need to be more mindful of the environmental problems that it is causing and invest even more in alternative forms of energy, but we have been doing “drill baby drill” under this President.

Yet, back to my earlier theme. We need to be mindful of the people in poverty. We need to make sure safety nets remain in place for as long as needed. Yet, we should not simplify this problem and have rigorous, fact based (and not political win-lose) discussion. We need to make sure we pay people a decent wage. People working for better pay is the better way to go as it treats them with dignity and not as chattel. And, we need to openly discuss, plan, execute, measure and celebrate investments in our country. Our country has always been about a public/ private partnership which is why we are successful. The dredging of the harbors is an easy example, as no one business should be burdened with that investment. We should not hide behind this history, because other countries have learned from us. This partnership on major investments is a job enabler. We need to do more of that.

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