Rational Market


WASHINGTON (AP) – Maybe a higher minimum wage isn’t so bad for job growth after all.

The 13 U.S. states that raised their minimum wages at the beginning of this year are adding jobs at a faster pace than those that did not, providing some counter-intuitive fuel to the debate over what impact a higher minimum has on hiring trends.

Many business groups argue that raising the minimum wage discourages job growth by increasing the cost of hiring. A Congressional Budget Office report earlier this year lent some support for that view. It found that a minimum wage of $10.10 an hour, as President Obama supports, could cost 500,000 jobs nationwide.

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But the state-by-state hiring data, released Friday by the Labor Department, provides ammunition to those who disagree. Economists who support a higher minimum say the figures are encouraging, though they acknowledge they don’t establish a cause and effect. There are many possible reasons hiring might accelerate in a particular state.

“It raises serious questions about the claims that a raise in the minimum wage is a jobs disaster,” said John Schmitt, a senior economist at the liberal Center for Economic and Policy Research. The job data “isn’t definitive,” he added, but is “probably a reasonable first cut at what’s going on.”

Just last week, Obama cited the better performance by the 13 states in support of his proposal for boosting the minimum wage nationwide.

“When … you raise the minimum wage, you give a bigger chance to folks who are climbing the ladder, working hard…. And the whole economy does better, including businesses,” Obama said in Denver.

In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent.

Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states – Connecticut, New Jersey, New York and Rhode Island – approved legislation mandating the increases.

Twelve of those states have seen job growth this year, while employment in Vermont has been flat. The number of jobs in Florida has risen 1.6 percent this year, the most of the 13 states with higher minimums. Its minimum rose to $7.93 an hour from $7.79 last year.

Some economists argue that six months of data isn’t enough to draw conclusions.

“It’s too early to tell,” said Stan Veuger, a scholar at the American Enterprise Institute. “These states are very different along all kinds of dimensions.”

For example, the number of jobs in North Dakota – which didn’t raise the minimum wage and has prospered because of a boom in oil and gas drilling – rose 2.8 percent since the start of this year, the most of any state.

But job growth in the aging industrial state of Ohio was just 0.7 percent after its minimum rose to $7.95 from $7.85. The federal minimum wage is $7.25.

Veuger, one of the 500 economists who signed a letter in March opposed to an increase in the federal minimum, said the higher wages should over time cause employers to hire fewer workers. They may also replace them with new technologies.

The Congressional Budget Office cited those factors in its February report. But in addition to job losses, the CBO also said a higher minimum could boost paychecks for another 16.5 million workers.

Sylvia Allegretto, an economist at the University of California, Berkeley, said that research comparing counties in states that raised their minimums with neighboring counties in states that did not has found no negative impact on employment.

Restaurants and other low-wage employers may have other ways of offsetting the cost of higher wages, aside from cutting back on hiring, she said. Higher pay can reduce staff turnover and save on hiring and training costs.

State and local governments have become increasingly active on the issue as the federal minimum wage has remained unchanged for five years. Twenty-two states currently have higher minimums than the federal requirement.

And 38 states have considered minimum wage legislation this year, the most on record, according to the National Conference of State Legislatures. At least 16 will boost their minimums starting next year, the NCSL says.

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AP Economics Writer Josh Boak contributed to this report, July 19, 2014

 Fast-food workers and labor organizers marched, waved signs and chanted in cities across the country on Thursday in a push for higher wages.

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Organizers say employees planned to forgo work in 100 cities, with rallies set for another 100 cities. But by late afternoon, it was unclear what the actual turnout was or how many of the participants were workers. At targeted restaurants, the disruptions seemed minimal or temporary.

The protests are part of an effort that began about a year ago and is spearheaded by the Service Employees International Union, which has spent millions to bankroll local worker groups and organize publicity for the demonstrations. Protesters are calling for pay of $15 an hour, but the figure is seen more as a rallying point than a near-term possibility.

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At a time when there’s growing national and international attention on economic disparities, advocacy groups and Democrats are hoping to build public support to raise the federal minimum wage of $7.25. That comes to about $15,000 a year for full-time work.

On Thursday, crowds gathered outside restaurants in cities including Boston, Lakewood, Calif., Phoenix, Washington, D.C., and Charlotte, N.C., where protesters walked into a Burger King but didn’t stop customers from getting their food.

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In Detroit, about 50 demonstrators turned out for a pre-dawn rally in front of a McDonald’s. A few employees said they weren’t working but a manager and other employees kept the restaurant open.

Julius Waters, a 29-year-old McDonald’s maintenance worker who was among the protesters, said it’s hard making ends meet on his wage of $7.40 an hour.

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“I need a better wage for myself, because, right now, I’m relying on aid, and $7.40 is not able to help me maintain taking care of my son. I’m a single parent,” Waters said.

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In New York City, about 100 protesters blew whistles and beat drums while marching into a McDonald’s at around 6:30 a.m.; one startled customer grabbed his food and fled as they flooded the restaurant, while another didn’t look up from eating and reading amid their chants of “We can’t survive on $7.25!”

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Community leaders took turns giving speeches for about 15 minutes until police arrived and ordered protesters out of the store. The crowd continued to demonstrate outside for about 45 minutes.

Later in the day, about 50 protesters rallied outside a Wendy’s in Brooklyn. Channon Wetstone, a 44-year-old attorney ended up going to a nearby Burger King because of the protests.

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She said that fast-food employees work very hard. When asked if she’d be willing to pay more for food so they could earn more, she said it would depend on what she was ordering.

“I would say 50 cents, 75 cents more,” Wetstone said.

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The push for higher pay in fast food faces an uphill battle. The industry competes aggressively on being able to offer low-cost meals and companies have warned that they would need to raise prices if wages were hiked.

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Fast-food workers have also historically been seen as difficult to unionize, given the industry’s high turnover rates. But the Service Employees International Union, which represents more than 2 million workers in health care, janitorial and other industries, has helped put their wages in the spotlight.

Berlin Rosen, a political consulting and public relations firm based in New York City, is coordinating communications efforts and connecting organizers with media outlets. The firm says its clients are the coalitions in each city, such as Fast Food Forward and Fight for 15. Those groups were established with the help of the SEIU, which is also listed on Berlin Rosen’s website as a client.

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The National Restaurant Association, an industry lobbying group, said most protesters were union workers and that “relatively few” restaurant employees have participated in past actions. It called the demonstrations a “campaign engineered by national labor groups.”

McDonald’s, Wendy’s and Yum Brands, which owns KFC, Taco Bell and Pizza Hut, said in statements that their restaurants create work opportunities and provide training and the ability to advance. Burger King reissued its statement on past protests, saying its restaurants have provided an entry point into the workforce for millions of Americans.

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In the meantime, the protests are getting some high-powered support from the White House. In an economic policy speech Wednesday, President Barack Obama mentioned fast-food and retail workers “who work their tails off and are still living at or barely above poverty” in his call for raising the federal minimum wage.

Senate Majority Leader Harry Reid, D-Nev., has promised a vote on the wage hike by the end of the year. But the measure is not expected to gain traction in the House, where Republican leaders oppose it.

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Supporters of wage hikes have been more successful at the state and local level. California, Connecticut and Rhode Island raised their minimum wages this year. Last month, voters in New Jersey approved an increase in the minimum to $8.25 an hour, up from $7.25 an hour.

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AP  |  By By CANDICE CHOI and SAM HANANELPosted: 12/05/2013

AP Writer Mike Householder contributed from Detroit, AP videographer Johnny Clark contributed from Atlanta and AP Video Journalist Ted Shaffrey contributed from New York, AP Writer Mitch Weiss from Charlotte, N.C.

Consumer Reports magazine today released its fourth annual “Naughty and Nice” list to highlight business practices it believes are helpful and not so helpful to consumers.

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Consumer Reports’ staff compiled the list with suggestions from the company’s Facebook fans. “In each case, we verified the policy and/or practice either by direct contact or reading through the details on the company’s website,” the magazine says on its website. Although we cite companies by name, other businesses may engage in similar practices—for better or worse. And praise or blame for a specific policy doesn’t mean we give a thumbs-down or thumbs-up or for everything else that company does or the way it treats customers.”

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BJ’s Wholesale Club was in Consumer Reports’ “naughty” list for not accepting “perishable” items in its online return policy, but the company told ABCnews.com that its website does not sell perishable items. Kelly McFalls, a spokeswoman for BJ’s, said the company brick and mortar stores accept refunds of perishable products, like food items.

Here are 9 companies that made the Naughty list:

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Amazon

The magazine dings the world’s 11th-largest retailer by sales for recently raising the requirement for free Super Saver shipping on eligible items to $35, from $25.

In a statement, the company said, “Amazon.com has not changed the minimum order amount for free shipping in more than a decade. During that time, we have expanded free shipping selection by millions of items across all 40 product categories. Fast, free shipping is not a holiday promotion at Amazon. We work hard to offer the best price available anywhere, every day, including Black Friday, Cyber Monday and all year. Nothing is more important to us than earning and maintaining customer trust.”

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Best Buy

Best Buy made the naughty list because it requires a photo ID for store returns, even if you have a receipt, and maintains the right to store your information to track future returns and exchanges. The company did not respond to a request for comment.

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Fry’s Electronics

The electronics store doesn’t allow returns on large televisions. In particular, the company says onits website: “Refunds cannot be given on televisions 24″ and larger.” The company did not respond to a request for comment.

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Kmart

Kmart made the naughty list for marketing that its stores will be open for 41 hours straight, starting at 6 a.m. on Thanksgiving Day. Sears Holding Corp., which is Kmart’s parent company, says seasonal associates and volunteer workers will be staffing stores.

The company says it has been open on Thanksgiving Day for 22 years and that it extended hours based on feedback from Shop Your Way members.

“We understand many associates want to spend time with their families during the holiday,” the company says. “With this in mind Kmart stores do their very best to staff with seasonal associates and those who are needed to work holidays. All associates who work on Thanksgiving are compensated with holiday pay.”

 New York City. Lord & Taylor department store decorated for Christmas Season.
Lord & Taylor

Though Lord & Taylor recently advertised a one-day sale with 25 percent savings, it only mentioned in the fine print that 70 brands and categories were excluded. The company did not respond to a request for comment.

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QVC

QVC was added to the naughty list because of its complicated pricing system.

“QVC prices goods 20 different ways,” Consumer Reports writes. “For example, there’s the ‘QVC Price,’ also known as the everyday great price, ‘Today’s Special Value,’ a steep one-day markdown, the ‘Event Price,’ another temporary deal, and ‘While Supplies Last Price,’ identifying big savings on items in relatively short supply.”

In a statement, the company said: “QVC consistently ranks as one of the top retailers for customer service and we take great pride in being completely transparent about our pricing. Our customers are expert shoppers and expect great value on everything they purchase at QVC. They shop with the assurance that there will never be a surprise about a purchase price or total delivered cost.”

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Raymour & Flanigan

“Deferred-interest credit cards let customers pay for purchases interest-free for a set period,” Consumer Reports writes. “But there’s a heavy burden on borrowers who fail to pay down the entire amount by the end of the promotional period: the prevailing interest rate gets applied retroactively to the entire original balance, not just the remaining amount you owe. Raymour & Flanigan isn’t the only chain that offers deferred-interest plans. Many big players, including Apple, Walmart, and Best Buy, for instance, do, too.”

But the furniture chain and Best Buy feature the option on their home page. Failure to pay off the balance in time could result in an APR of 28 percent. The company did not respond to a request for comment.

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Toys ‘R’ Us

Toys ‘R’ Us was added to the naughty list for suspending its price-match policy on Black Friday, and not matching online deals during the week of Black Friday (starting Nov. 25) or on Cyber Monday. The company did not respond to a request for comment.

 United airlines
United Airlines

United Airlines doesn’t allow pre-boarding for families with young kids. The airline policy states, “Families with infants or with children who are under the age of 4 may board the aircraft when their group number is called.” The company did not respond to a request for comment.

The “nice” list can be found here.

 

 

* Text by Susanna Kim (ABC), Nov. 25, 2013

Americans aren’t so sure about rich people.

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For every revered Steve Jobs, there’s a reviled Bernie Madoff; for every folksy Warren Buffett, there’s a tone-deaf Mitt Romney. The pursuit of happiness is patriotic, but the pursuit of riches can come off as greedy. This ambivalence toward the wealthy is embedded in American democracy, and no one knows how to yank it out.

Even Alexis de Tocqueville agreed — a good thing, too, because discussing democracy in America without quoting “Democracy in America” is forbidden. “Men are there seen on a greater equality in point of fortune . . . than in any other country in the world, or in any age of which history has preserved the remembrance,” Tocqueville wrote of his travels in the United States. But then, the dagger: “I do not mean that there is any lack of wealthy individuals in the United States. I know of no country, indeed, where the love of money has taken stronger hold.”

So Americans dislike inequality but crave wealth — and this paradox propels our mixed feelings about the rich. Oppressors or job creators? Ambitious go-getters or rapacious 1 percenters?

Robert F. Dalzell, a historian at Williams College, believes he has an answer. America has a long-standing deal with the rich, he explains, one that allows the country to “forge an accommodation between wealth and democracy.” It’s simple: Yes, rich people, you can exploit workers and natural resources and lord your wealth over everyone if you like, and we’ll resent you for it. But if, along the way, you give a chunk of your fortune to charity, all will be forgiven, old sport. History won’t judge you as a capitalist; it will hail you as a philanthropist.

This uneasy bargain is the premise of Dalzell’s “The Good Rich and What They Cost Us,” which chronicles the deal from before the revolution through the recent financial crisis. Of course, just because the deal has lasted this long doesn’t mean that it will endure. Or that it is a particularly good one. Or that the rich aren’t constantly trying to rewrite the terms.

Early on, the wealthy waited until their deaths to strike the deal. Dalzell writes of Robert Keayne, a prominent 17th-century Boston merchant who sought to cleanse his price-gouging reputation by devoting his posthumous riches to college scholarships, improvements in his city’s water supply and defense, and construction of a town hall where important men like him could discuss weighty things. His will became a unilateral contract with town leaders; if anyone tried to sue his estate for past misdeeds, Keayne stipulated, all his giving would “utterly cease and become void.” Boston took the deal.

John D. Rockefeller saw no reason to wait. His Standard Oil empire — whose ruthless business tactics Ida Tarbell exposed and whose interlocking parts the Supreme Court split up — became the basis for the greatest philanthropic enterprise the world had ever seen. From major financial commitments to Spellman College and the University of Chicago, to support for medical research that developed the yellow-fever vaccine, to the financing of the Cloisters museum in Upper Manhattan and the restoration of Colonial Williamsburg, to list just a few initiatives, Rockefeller and his descendants set the model for modern, large-scale philanthropy. And they did so in a way that preserved the family’s influence and wealth over multiple generations.

“There was something Medici-like about the whole effort,” Dalzell writes, “for within the soul of that great Renaissance family there lay an urge to combine what many might have thought uncombinable — vast wealth and dedicated public service.”

But he also sees a more prosaic motivation: Billionaires want to polish their reputations for posterity. Wealth does not dull their sensitivity to what we think of them; it heightens it. Dalzell thinks it is no coincidence, for example, that the Giving Pledge — a public commitment by the world’s richest individuals, led by Buffett and Bill Gates, to donate most of their fortunes — coincided with the Great Recession’s backlash against the wealthy.

So, the rich just want to be loved. Is that so wrong? If more than 100 of the planet’s wealthiest families and individuals are promising to give away unfathomable amounts of money, why quibble?

Well, there’s at least one reason: The deal gets worse as the price paid for the rich’s charity — the inequality between the affluent and the rest — keeps rising. From 1979 to 2007, the real, after-tax income of the top 1 percent of the U.S. population grew by 275 percent, compared with 18 percent for the bottom fifth, according to the Congressional Budget Office. Social mobility has become more stunted in the United States than in Europe. And Americans see themselves falling further behind: A Washington Post-ABC News polllast year found that 57 percent of registered voters believed that the gap between the rich and rest was larger than it had been historically; only 5 percent thought it was smaller.

The deal will get even worse if efforts to push laws and policies that benefit wealthier Americans succeed. In “Rich People’s Movements,” Isaac William Martin, a sociologist at the University of California at San Diego, says today’s tea party is just the latest manifestation of another American tradition: the mobilization of wealthy and middle-class citizens in an effort to cut their taxes and contributions to the state.

Before the tea party, Martin tells us, there were tax clubs — groups of bankers throughout the South that agitated for tax cuts and helped bring about the Revenue Act of 1926, which “cut the tax rates on the richest Americans more deeply than any other tax law in history.” Before we hadGrover Norquist and Americans for Tax Reform, we had J.A. Arnold and the American Taxpayers’ League, and Vivien Kellems and the Liberty Belles, a 1950s women’s movement that campaigned to repeal the income tax. And before Arthur Laffer and supply-side economics, there was Andrew Mellon, the banker, philanthropist and Treasury secretary whose 1924 book,“Taxation: The People’s Business,” argued that cutting income tax rates would create more revenue through greater economic growth.

Rich people’s movements respond to perceived threats, such as the New Deal, President Franklin Roosevelt’s effort to cap incomes during World War II (because “all excess income should go to win the war,” FDR explained) or, now, the policies of the Obama administration. But these movements sell their efforts not as benefiting the rich alone — that would be too transparent, too tacky. Instead, they claim to protect freedom, promote growth, safeguard the Constitution or fend off an ever-more-intrusive government. Martin calls this “strategic policy crafting,” and it brings more allies to the fight.

In fact, it is not just the wealthy, but often the middle class or the slightly-richer-than-average who have campaigned for lower taxes on affluent Americans. “People need not be dupes in order to protest on behalf of others who are richer than they are,” Martin argues. “The activists and supporters of rich people’s movements were defending their own real interests, as they saw them. A tax increase on the richest 1 percent may be perceived by many upper-middle-income property owners as the first step in a broader assault on property rights.” In other words, there’s nothing the matter with Kansas.

Shortly before the Republican National Convention gathered last year to nominate a man who could have become one of the richest presidents in U.S. history, the Pew Research Center conducted a survey on American attitudes toward the wealthy. The chronic ambivalence was there: Forty-three percent of respondents said rich people are more likely than the average American to be intelligent, and 42 percent believed that the rich worked harder than everyone else. The good rich! But 55 percent said wealthy people were more likely to be greedy, and 34 percent thought they were less likely to be honest. The bad rich.

Can “giving pledges” and foundation grants sustain America’s deal with the wealthy in a time of increasing inequality and falling social mobility? In his conclusion, Dalzell worries that the belief in the generosity of the good rich leads us to “tolerate, even celebrate, the violation of some of our most cherished ideals” of fairness and egalitarianism.

Perhaps the dilemma of extreme wealth and disparities in a democracy is that noblesse oblige becomes necessary. These two books show that the wealthy give much with one hand but seek to contribute far less with the other. That makes the giving they choose to do all the more critical but all the less accountable.

And that doesn’t sound like such a good deal.

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By Carlos Lozada, Washington Post, November 27, 2013

Turning a blind eye. Giving someone the cold shoulder. Looking down on people. Seeing right through them.

These metaphors for condescending or dismissive behavior are more than just descriptive. They suggest, to a surprisingly accurate extent, the social distance between those with greater power and those with less — a distance that goes beyond the realm of interpersonal interactions and may exacerbate the soaring inequality in the United States.

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A growing body of recent research shows that people with the most social power pay scant attention to those with little such power. This tuning out has been observed, for instance, with strangers in a mere five-minute get-acquainted session, where the more powerful person shows fewer signals of paying attention, like nodding or laughing. Higher-status people are also more likely to express disregard, through facial expressions, and are more likely to take over the conversation and interrupt or look past the other speaker.

Bringing the micropolitics of interpersonal attention to the understanding of social power, researchers are suggesting, has implications for public policy.

Of course, in any society, social power is relative; any of us may be higher or lower in a given interaction, and the research shows the effect still prevails. Though the more powerful pay less attention to us than we do to them, in other situations we are relatively higher on the totem pole of status — and we, too, tend to pay less attention to those a rung or two down.

A prerequisite to empathy is simply paying attention to the person in pain. In 2008, social psychologists from the University of Amsterdam and the University of California, Berkeley, studied pairs of strangers telling one another about difficulties they had been through, like a divorce or death of a loved one. The researchers found that the differential expressed itself in the playing down of suffering. The more powerful were less compassionate toward the hardships described by the less powerful.

Dacher Keltner, a professor of psychology at Berkeley, and Michael W. Kraus, an assistant professor of psychology at the University of Illinois, Urbana-Champaign, have done much of the research on social power and the attention deficit.

Mr. Keltner suggests that, in general, we focus the most on those we value most. While the wealthy can hire help, those with few material assets are more likely to value their social assets: like the neighbor who will keep an eye on your child from the time she gets home from school until the time you get home from work. The financial difference ends up creating a behavioral difference. Poor people are better attuned to interpersonal relations — with those of the same strata, and the more powerful — than the rich are, because they have to be.

While Mr. Keltner’s research finds that the poor, compared with the wealthy, have keenly attuned interpersonal attention in all directions, in general, those with the most power in society seem to pay particularly little attention to those with the least power. To be sure, high-status people do attend to those of equal rank — but not as well as those low of status do.

This has profound implications for societal behavior and government policy. Tuning in to the needs and feelings of another person is a prerequisite to empathy, which in turn can lead to understanding, concern and, if the circumstances are right, compassionate action.

In politics, readily dismissing inconvenient people can easily extend to dismissing inconvenient truths about them. The insistence by some House Republicans in Congress on cutting financing for food stamps and impeding the implementation of Obamacare, which would allow patients, including those with pre-existing health conditions, to obtain and pay for insurance coverage, may stem in part from the empathy gap. As political scientists have noted, redistricting and gerrymandering have led to the creation of more and more safe districts, in which elected officials don’t even have to encounter many voters from the rival party, much less empathize with them.

Social distance makes it all the easier to focus on small differences between groups and to put a negative spin on the ways of others and a positive spin on our own.

Freud called this “the narcissism of minor differences,” a theme repeated by Vamik D. Volkan, an emeritus professor of psychiatry at the University of Virginia, who was born in Cyprus to Turkish parents. Dr. Volkan remembers hearing as a small boy awful things about the hated Greek Cypriots — who, he points out, actually share many similarities with Turkish Cypriots. Yet for decades their modest-size island has been politically divided, which exacerbates the problem by letting prejudicial myths flourish.

In contrast, extensive interpersonal contact counteracts biases by letting people from hostile groups get to know one another as individuals and even friends. Thomas F. Pettigrew, a research professor of social psychology at the University of California, Santa Cruz, analyzed more than 500 studies on intergroup contact. Mr. Pettigrew, who was born in Virginia in 1931 and lived there until going to Harvard for graduate school, told me in an e-mail that it was the “the rampant racism in the Virginia of my childhood” that led him to study prejudice.

In his research, he found that even in areas where ethnic groups were in conflict and viewed one another through lenses of negative stereotypes, individuals who had close friends within the other group exhibited little or no such prejudice. They seemed to realize the many ways those demonized “others” were “just like me.” Whether such friendly social contact would overcome the divide between those with more and less social and economic power was not studied, but I suspect it would help.

Since the 1970s, the gap between the rich and everyone else has skyrocketed. Income inequality is at its highest level in a century. This widening gulf between the haves and have-less troubles me, but not for the obvious reasons. Apart from the financial inequities, I fear the expansion of an entirely different gap, caused by the inability to see oneself in a less advantaged person’s shoes. Reducing the economic gap may be impossible without also addressing the gap in empathy.

 

* Text By  Daniel Goleman (NYT, Oct. 5, 2013)

A single mother who has been working at McDonald’s for 10 years was detained by police last week after she interrupted the company president’s speech in Chicago to confront him about low worker pay.

Crain’s Chicago Business reports that 26-year-old Nancy Salgado was part of a group protesting the event, asking company officials to raise worker wages to $15 an hour and allow employees to form a union without fear of retaliation.

Protestors were detained for an hour, threatened with arrest, and ticketed, according to Chicagoist.

The Real News posted a video to YouTube that contains a clip of Salgado’s outburst as well as an interview with her:

Here’s what Salgado said to McDonald’s USA President Jeff Stratton: “I’m a single mother of two. It’s really hard for me to feed my two kids and struggle day to day. Do you think this is fair that I have to be making $8.25 when I’ve been working at McDonald’s for 10 years?”

Stratton’s response: “I’ve been there [at McDonald’s] 40 years.”

Salgado told The Real News that she still works at McDonald’s (although they cut her hours back) and she loves her job, but she wanted to speak out because she thought her voice needed to be heard.

“It gets harder and harder,” she said. “Sometimes I can’t provide a gallon of milk in the refrigerator.”

 

* Pamela Engel (BI, October 9,2013)

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AT an office party in 2005, one of my colleagues asked my then husband what I did on weekends. She knew me as someone with great intensity and energy. “Does she kayak, go rock climbing and then run a half marathon?” she joked. No, he answered simply, “she sleeps.” And that was true. When I wasn’t catching up on work, I spent my weekends recharging my batteries for the coming week. Work always came first, before my family, friends and marriage — which ended just a few years later.

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In recent weeks I have been following with interest the escalating debate about work-life balance and the varying positions of Facebook’s Sheryl Sandberg, Marissa Mayer of Yahoo and the academic Anne-Marie Slaughter, among others. Since I resigned my position as chief financial officer of Lehman Brothers in 2008, amid mounting chaos and a cloud of public humiliation only months before the company went bankrupt, I have had ample time to reflect on the decisions I made in balancing (or failing to balance) my job with the rest of my life. The fact that I call it “the rest of my life” gives you an indication where work stood in the pecking order.

I don’t have children, so it might seem that my story lacks relevance to the work-life balance debate. Like everyone, though, I did have relationships — a spouse, friends and family — and none of them got the best version of me. They got what was left over.

I didn’t start out with the goal of devoting all of myself to my job. It crept in over time. Each year that went by, slight modifications became the new normal. First I spent a half-hour on Sunday organizing my e-mail, to-do list and calendar to make Monday morning easier. Then I was working a few hours on Sunday, then all day. My boundaries slipped away until work was all that was left.

Inevitably, when I left my job, it devastated me. I couldn’t just rally and move on. I did not know how to value who I was versus what I did. What I did was who I was.

I have spent several years now living a different version of my life, where I try to apply my energy to my new husband, Anthony, and the people whom I love and care about. But I can’t make up for lost time. Most important, although I now have stepchildren, I missed having a child of my own. I am 47 years old, and Anthony and I have been trying in vitro fertilization for several years. We are still hoping.

Sometimes young women tell me they admire what I’ve done. As they see it, I worked hard for 20 years and can now spend the next 20 focused on other things. But that is not balance. I do not wish that for anyone. Even at the best times in my career, I was never deluded into thinking I had achieved any sort of rational allocation between my life at work and my life outside.

I have often wondered whether I would have been asked to be C.F.O. if I had not worked the way that I did. Until recently, I thought my singular focus on my career was the most powerful ingredient in my success. But I am beginning to realize that I sold myself short. I was talented, intelligent and energetic. It didn’t have to be so extreme. Besides, there were diminishing returns to that kind of labor.

I didn’t have to be on my BlackBerry from my first moment in the morning to my last moment at night. I didn’t have to eat the majority of my meals at my desk. I didn’t have to fly overnight to a meeting in Europe on my birthday. I now believe that I could have made it to a similar place with at least some better version of a personal life. Not without sacrifice — I don’t think I could have “had it all” — but with somewhat more harmony.

I have also wondered where I would be today if Lehman Brothers hadn’t collapsed. In 2007, I did start to have my doubts about the way I was living my life. Or not really living it. But I felt locked in to my career. I had just been asked to be C.F.O. I had a responsibility. Without the crisis, I may never have been strong enough to step away. Perhaps I needed what felt at the time like some of the worst experiences in my life to come to a place where I could be grateful for the life I had. I had to learn to begin to appreciate what was left.

At the end of the day, that is the best guidance I can give. Whatever valuable advice I have about managing a career, I am only now learning how to manage a life.

Autor: Erin Callan, New York Times, March 9, 2013

Erin Callan is the former chief financial officer of Lehman Brothers.

 

 

 

With the economy struggling to find its footing, Americans spent less time at work last year and found more time for leisure activities such as watching television, a new government survey finds.

The average American aged 15 or older spent three hours, 32 minutes a day doing work-related activities last year, according to the American Time Use Survey released by the Labor Department on Thursday. That is down from 2011, when time spent on work jumped from three hours and 30 minutes to three hours and 34 minutes. While such changes may not seem big, average yearly changes in time spent on different activities tend to be small, and even minor changes are significant.

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The survey, which has been conducted annually since 2003 and includes both employed and unemployed persons, suggests America’s sluggish recovery continues to hamper workers. While the U.S. unemployment rate fell last year from 8.3% to 7.8%—it is now at 7.6%—other trends are likely holding down average hours spent at work. The number of part-time workers was higher in 2012 than the year before, for example

“The recovery has basically been a recovery for a tiny fraction of the population,” said Geoffrey Godbey, professor emeritus at Pennsylvania State University and co-author of “Time For Life: The Surprising Ways Americans Use Their Time.” “What you’re seeing is people who might want more work but aren’t getting it,” he said.

Meanwhile, the share of the population working or looking for a job dropped to 63.6% at the end of last year, compared with 64% in December 2011. That number, known as the labor force participation rate, has been falling as a result of a combination of discouraged workers dropping out of the workforce and baby boomers retiring.

The aging of America’s population means fewer people are working and more retirees are at home watching TV, Mr. Godbey said. At the same time, women have become a larger share of America’s labor force, but tend to work fewer hours than men do. And there’s a growing informal economy, he said, that might not be captured by government surveys.

With less time spent at work, Americans boosted the portion of their day going to leisure and sports activities: Time spent on leisure jumped about nine minutes to five hours and 22 minutes. Americans watched TV for two hours and 50 minutes a day, a second-straight increase from two hours and 44 minutes in 2010. Meanwhile, time spent sleeping edged up to eight hours and 44 minutes, from eight hours and 40 minutes in 2010. Time devoted to volunteering and cooking, meanwhile, fell.

Wendy Wang, a sociologist at the Pew Research Center, said the changing nature of fatherhood is also altering the way Americans use their time. In a March report based partly on the government’s survey, she found fathers were logging in fewer hours a week on job-related activities, roughly 37 hours on average in 2011, compared with 42 in 1965. Also, more American fathers are working part-time, and spending more time doing chores and with their kids. “Fathers think they need to go home earlier,” she said.

Indeed, the latest government survey shows men spent slightly more time doing housework than in 2011, while the reduction in time spent at work was more pronounced for men than women.

By Neil Shah , WSJ, June 20, 2013

The divide between rich and poor is widening in developed nations, according to a new report released Wednesday by the Paris-based Organization for Economic Cooperation and Development.

According to the new data, economic disparity has risen more from 2007 to 2010 than in the preceding 12 years. Over this period, the OECD has documented increasing income inequality caused by the financial crisis, which it says is “squeezing income and putting pressure on inequality and poverty.”

In 2010, the richest 10 percent of people across 33 OECD member states earned 9.5 times the income of the poorest 10 percent. That factor is up from 9 in 2007. The largest differences among OECD countries were found in Chile, Mexico, Turkey, the United States and Israel, while the lowest were in Iceland, Slovenia, Norway and Denmark.

Levels of income inequality have worsened across three-quarters of all OECD countries since 2007. This gap rose most rapidly in nations where the euro crisis has hit hardest, coinciding with soaring unemployment. For example, in Spain and Italy, the average income of the top 10 percent stayed relatively stable, but the poor became drastically poorer.

Income inequality in the United States and Latin America — particularly Chile and Mexico — has tended higher than in Europe. This trend continued into 2010. The top five most unequal countries (in descending order) were Chile, Mexico, Turkey, the United States and Israel. Portugal, the European nation with the highest income inequality, was ranked sixth.

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(More detail in this link:  http://en.wikipedia.org/wiki/Gini_coefficient)

 

Traditionally, OECD countries have had lower levels of inequality than non-OECD nations such as India, China and Russia. Despite the economic downturn, the economies of China and India grew above the OECD average over the past decade and are continuing to develop. Though these emerging economies have reduced levels of poverty, they have also seen increased levels of income inequality.

In most OECD countries, the growing gulf between rich and poor was alleviated slightly by welfare support. While most countries experienced increases in disposable income inequality and relative poverty, the levels in 2010 were only slightly higher than in 2007, perhaps due to the deployment of fiscal stimulus packages.

The OECD report warns that if governments continue to cut benefits programs and pursue austerity policies, levels of inequality could continue to grow. Michael Förster, senior analyst at the OECD social policy division, said that they have taken this report as an opportunity to “raise the red flag” about the necessity for social welfare provisions in softening the blow of the economic downturn.

“At this stage in most countries, including most European countries, the crisis is not over. Just yesterday, France announced that it is in a recession,” Förster said. “The problem is that the focus of governments has shifted from stimulus to austerity measures.”

OECD Secretary-General Angel Gurría explained that governments must find ways of growing their economies while supporting individuals who are most at risk.

“These worrying findings underline the need to protect the most vulnerable in society, especially as governments pursue the necessary task of bringing public spending under control,” Gurría said in a statement. “Policies to boost jobs and growth must be designed to ensure fairness, efficiency and inclusiveness. Among these policies, reforming tax systems is essential to ensure that everyone pays their fair share and also benefits and receives the support they need.”

 

By Eliza Mackintosh, May 16, 2013, (The Washington Post)

DHAKA, Bangladesh—Rescue workers Friday pulled a female garment worker from the rubble of Rana Plaza after more than 16 days buried alive—among the longest periods anyone has survived such an ordeal.

The eight-story building, which housed five garment factories, collapsed April 24, killing more than 1,000 people, one of the worst-ever factory accidents.

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Agence France-Presse/Getty ImagesBangladeshi rescuers retrieve garment worker Reshma Begum from the rubble of a collapsed building on May 10.

Long after hope of finding anyone alive had faded, army rescuers said they had broken through the mass of concrete and steel to a woman in her 20s.

She had fallen from the third floor into a Muslim prayer room into an air pocket in the basement, and remained alive by forcing a broken pipe up through a crack in the debris for ventilation, rescuers said.

Reshma Begum, who identified herself as a seamstress who worked on the third floor of Rana Plaza, had been banging the pipe against concrete to attract attention, after bulldozers had removed loose rubble that had been covering the area.

“I heard the sound and rushed towards the spot,” Abdur Razzaq, an army sergeant who was involved in the rescue, said in an interview. “I knelt down and heard a faint voice. ‘Sir, please help me,’ she cried.”

The rescue was broadcast live on national television. As she was lifted from the rubble, crowds that had gathered broke into cheers of “God is great!” Rescue workers wiped away tears.

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“It’s a miraculous event,” Prime Minister Sheikh Hasina said after visiting Ms. Begum in the hospital and congratulating the rescue teams.

Ms. Begum told rescuers she was unhurt and had survived by scavenging for food and bottled water in the backpacks of dead colleagues. She had been buried for 16 days and about seven hours during one of the hottest times of the year in Bangladesh, with temperatures reaching 95 degrees (35 degrees Celsius) and 80% humidity.

Her hair and face were covered in dirt as she carried out, wearing a purple and pink salwar-kameeze, and her scalp was showing where she had apparently lost big clumps of hair.

Doctors who attended her at a nearby military hospital said she was suffering from dehydration but otherwise appeared to have no major injuries.

At the hospital, a woman who identified herself as Ayesha Begum said Reshma was her sister.

“We’ve been waiting outside the building for two weeks,” said Ayesha Begum, flanked by another woman who identified herself as Reshma’s aunt. “We’d given up hope. God has brought her back for the sake of her little son.”

Reshma Begum came from the northern district of Dinajpur, according to Ayesha Begum. She said her sister had come to Dhaka four years ago to work in a garment factory so as to become more independent.

Reshma recently had separated from her husband and was bringing up her 5-year-old son, working as a seamstress in the New Wave Bottoms factory in Rana Plaza, she said.

The crowds around the disaster site had thinned in recent days, but on Friday evening, families clutching photos of missing loved ones were once again thronging the area hoping to see their relatives brought out alive.

“God is merciful,” said Afsar Ali, who said he was looking for his daughter. “We still have hope.”

There has been controversy in Bangladesh over the pace of the rescue operations. Right after the disaster, the Bangladesh government turned down an offer of help from the U.N. Office for the Coordination of Humanitarian Affairs, a spokesman for the office said.

In the first few days, volunteers were heavily involved, some using their bare hands. People held up handwritten signs asking for donations of oxygen cylinders, drills and water bottles.

Some relatives of those missing, angered by the lack of heavy-lifting equipment, clashed with police at the site.

Later, the army, which now is coordinating efforts, moved in with bulldozers and other heavy machinery. They have defended the pace of the rescue efforts, saying they were careful not to go too quickly and kill possible survivors.

Maj. Gen. Hasan Suhrawardy, who is leading the army’s salvage operation, said the pace would now slow again, since Ms. Begum’s survival had raised hopes, however slight, that other survivors could be in the wreckage.

Bulldozers stopped plowing the debris for a few hours after Ms. Begum was discovered, before starting operations again gingerly under flashlights.

Briefing reporters at the building collapse site, Gen. Suhrawardy said: “Reshma is totally OK. She worked hard to keep herself alive. That is a very strong woman.”

The last known survivor before Friday was killed on April 28 by a fire set off inadvertently by rescuers who were trying to cut through to free her.

The tragedy has shocked Bangladesh and the world, putting pressure on the government and foreign brands to improve safety conditions in the country’s 5,000 factories.

Bangladesh is one of the world’s largest producers of garments, supplying major U.S. and European retailers. The industry produces some of the world’s cheapest clothes, paying workers monthly wage rates as low as $40, a quarter those of China’s.

The government this week has begun an inspection of the country’s factories. On Wednesday, the government forced 18 factories to shut while they carried out safety improvements, including three owned by the country’s largest exporter of garments.

There have been few instances of people surviving longer than 10 days after disasters like earthquakes, according to academic studies. In 2010, after the Haiti earthquake, a teenage girl was rescued 15 days after the disaster.

The United Nations, which coordinates disaster relief, normally calls of search and rescue operations after a week or so and shifts its focus to tending to survivors.

In the past 10 days, focus has shifted to recovering hundreds of bodies that lay under rubble. The death toll has jumped by about 100 each day since Saturday, as salvage workers found huge numbers of bodies on the ground floor and basement.

On Friday, the toll rose to 1,050 people.

 

By SYED ZAIN AL-MAHMOOD (May 10, 2013)

—Joe Lauria in New York contributed to this article. 

If we do not make the difference between people who earn more than those who earn less, be reasonable. Then the economic world, businesses or jobs will be chaos, for most people, where injustice, selfishness, greed and arrogance is something considered normal executive.

Ratio Of Pay CEO vs. Average Worker

There should be a limit on earnings regardless one has several professional degrees or doctorates at Harvard.

 

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We pay fair wages to all workers, without exception, according to the cost of living in the country, where human dignity is quantified.

In this way we will have a better world, a more just and where justice, peace and social solidarity is normal.

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Also make sure that the domestic market is positive. Be Sure that most people will have some money left over to use it to make purchases of various products or services. Otherwise only a small group will do it and many companies or businesses will have to close its doors.

See You.

CTsT

A study finds that granting citizenship to undocumented workers would increase pay, tax revenue and overall spending.

Undocumented workers till an asparagus field near Toppenish, Wash., on the Yakama Indian Reservation© Elaine Thompson-AP Photo

Adding 203,000 new jobs, $184 billion in tax revenue and $1.4 trillion to the nation’s overall economy seems like a pretty good idea for a country clawing its way out of an economic downturn.Would Americans still think it’s a good idea if that boom required granting undocumented immigrants immediate citizenship? The answer might be less than unanimous, but the folks at the Center For American Progress say it’s an idea worth considering sooner rather than later.

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Five years after gaining citizenship, undocumented workers would make 25.1% more annually, according to a study obtained by The Huffington Post. That raise will “ripple through the economy” as immigrants use their income to buy goods and pay taxes.

The plan, as with nearly any mention of immigration reform in the U.S., has drawn its fair share of criticism. In his book “Immigration Wars: Forging An American Solution,” former Florida Gov. Jeb Bush insists that the economic benefits of a path to citizenship are outweighed by the potential damage to the “integrity of our immigration system.”

The junior senator from Bush’s state, Republican Marco Rubio, flat-out disagrees and has joined Arizona Sen. John McCain in calling for a clear and immediate path to citizenship for undocumented workers. They wouldn’t be the first or even the most high-profile Republicans to make that call, either.

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In 1986, Ronald Reagan made immigration a priority of his presidency by instituting the Immigration Reform and Control Act, which National Public Radio recently spotlighted for granting amnesty and, eventually, citizenship to undocumented workers who had been in the country since 1982.

How did that work out? Ask the Department of Labor, which reports that immigrants granted citizenship under Reagan’s plan got a 15.1% bump in pay immediately afterward.

But what if Americans just aren’t ready for such a sweeping change in immigration policy? Then they’re going to have to wait a whole lot longer for a payout while they make up their minds. The Center For American Progress study showed that delaying the citizenship process could put off benefits for both workers and the greater economy by a decade or more.

Powerball winner Pedro Quezada says, “Imagine … so much money. But it will not change my heart.” He says his wife can have “whatever she wants.”

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LAWRENCEVILLE, N.J. — The Dominican immigrant who won one of the largest lottery jackpots in U.S. history said Tuesday he felt “pure joy” at winning, and he plans to buy a car so he doesn’t have to walk everywhere.

Pedro Quezada, a former shop owner who lives in a working-class suburb of New York City, appeared at New Jersey lottery headquarters to officially claim the $338 million Powerball prize.

New Jersey man says he won $338 million Powerball jackpot

Lottery officials said Quezada had decided to accept the winnings in the form of a lump-sum payment worth $221 million, or about $152 million after taxes. It’s the fourth-largest jackpot in Powerball history.

Quezada said his mind is not yet clear enough to know how he will use the money, but he said he could use a good car. Asked what kind of car he has now, he said, “My feet.”

Until last year, he worked 15 hours a day at the store his son now runs.

“Imagine … so much money,” Quezada said. “But it will not change my heart.”

He said he would share his winnings with family members and would use some to help his community. He said his Mexican-born wife of nine years, Ines Sanchez, could have “whatever she wants.”

Neighbors told The Record newspaper that the Quezada family has suffered bad luck in recent years. Two years ago, thieves broke into their apartment and stole everything from clothing to jewelry. The year before, a fire destroyed much of their store, they said.

Quezada would not talk about any of the hard times.

“I know he’s going to do something good with the money,” Quezada’s son, Casiano, said from behind the counter of the family store, the Apple Deli Grocery. He said he is proud of his father and still in disbelief that he won.

The family moved to the U.S. in the 1980s from the Dominican city of Jarabacoa, Casiano Quezada said.

Pedro Quezada’s neighbors saw a lot of themselves in the winner: hardworking, a family man, an immigrant and someone who has known hard times.

The neighbors were thrilled that one of their own finally struck it rich.

“This is super for all of us on this block,” said Eladia Vazquez, who has lived across the street from Quezada’s building for the past 25 years. Quezada and his family “deserve it because they are hardworking people.”

Fellow Dominican immigrant Jose Gonzalez said he barbecues and plays dominoes with Quezada in the summers in a backyard on their street.

“He sometimes would work from six in the morning to 11 at night, so I did not see him much,” Gonzalez said Monday night. “I am happy for him. … I don’t know where he is now, but I imagine he will drop by to say hi to his friends.”

Powerball is played in 42 states, Washington, D.C., and the U.S. Virgin Islands. The chance of matching all five numbers and the Powerball number is about 1 in 175 million.

Associated Press writers David Porter and Angela Delli Santi contributed.

When Mort Zuckerman, the New York City real-estate and media mogul, lavished $200 million on Columbia University in December to endow the Mortimer B. Zuckerman Mind Brain Behavior Institute, he did so with fanfare suitable to the occasion: the press conference was attended by two Nobel laureates, the president of the university, the mayor, and journalists from some of New York’s major media outlets.

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Many of the 12 other individual charitable gifts that topped $100 million in the U.S. last year were showered with similar attention: $150 million from Carl Icahn to the Mount Sinai School of Medicine, $125 million from Phil Knight to the Oregon Health & Science University, and $300 million from Paul Allen to the Allen Institute for Brain Science in Seattle, among them. If you scanned the press releases, or drove past the many university buildings, symphony halls, institutes, and stadiums named for their benefactors, or for that matter read the histories of grand giving by the Rockefellers, Carnegies, Stanfords, and Dukes, you would be forgiven for thinking that the story of charity in this country is a story of epic generosity on the part of the American rich.

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It is not. One of the most surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentage of their income. In 2011, the wealthiest Americans—those with earnings in the top 20 percent—contributed on average 1.3 percent of their income to charity. By comparison, Americans at the base of the income pyramid—those in the bottom 20 percent—donated 3.2 percent of their income. The relative generosity of lower-income Americans is accentuated by the fact that, unlike middle-class and wealthy donors, most of them cannot take advantage of the charitable tax deduction, because they do not itemize deductions on their income-tax returns.

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But why? Lower-income Americans are presumably no more intrinsically generous (or “prosocial,” as the sociologists say) than anyone else. However, some experts have speculated that the wealthy may be less generous—that the personal drive to accumulate wealth may be inconsistent with the idea of communal support. Last year, Paul Piff, a psychologist at UC Berkeley, published research that correlated wealth with an increase in unethical behavior: “While having money doesn’t necessarily make anybody anything,” Piff later told New York magazine, “the rich are way more likely to prioritize their own self-interests above the interests of other people.” They are, he continued, “more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.” Colorful statements aside, Piff’s research on the giving habits of different social classes—while not directly refuting the asshole theory—suggests that other, more complex factors are at work. In a series of controlled experiments, lower-income people and people who identified themselves as being on a relatively low social rung were consistently more generous with limited goods than upper-class participants were. Notably, though, when both groups were exposed to a sympathy-eliciting video on child poverty, the compassion of the wealthier group began to rise, and the groups’ willingness to help others became almost identical.

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Last year, not one of the top 50 individual charitable gifts went to a social-service organization or to a charity that principally serves the poor and the dispossessed.

If Piff’s research suggests that exposure to need drives generous behavior, could it be that the isolation of wealthy Americans from those in need is a cause of their relative stinginess? Patrick Rooney, the associate dean at the Indiana University School of Philanthropy, told me that greater exposure to and identification with the challenges of meeting basic needs may create “higher empathy” among lower-income donors. His view is supported by a recent study by The Chronicle of Philanthropy, in which researchers analyzed giving habits across all American ZIP codes. Consistent with previous studies, they found that less affluent ZIP codes gave relatively more. Around Washington, D.C., for instance, middle- and lower-income neighborhoods, such as Suitland and Capitol Heights in Prince George’s County, Maryland, gave proportionally more than the tony neighborhoods of Bethesda, Maryland, and McLean, Virginia. But the researchers also found something else: differences in behavior among wealthy households, depending on the type of neighborhood they lived in. Wealthy people who lived in homogeneously affluent areas—areas where more than 40 percent of households earned at least $200,000 a year—were less generous than comparably wealthy people who lived in more socioeconomically diverse surroundings. It seems that insulation from people in need may dampen the charitable impulse.

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Wealth affects not only how much money is given but to whom it is given. The poor tend to give to religious organizations and social-service charities, while the wealthy prefer to support colleges and universities, arts organizations, and museums. Of the 50 largest individual gifts to public charities in 2012, 34 went to educational institutions, the vast majority of them colleges and universities, like Harvard, Columbia, and Berkeley, that cater to the nation’s and the world’s elite. Museums and arts organizations such as the Metropolitan Museum of Art received nine of these major gifts, with the remaining donations spread among medical facilities and fashionable charities like the Central Park Conservancy. Not a single one of them went to a social-service organization or to a charity that principally serves the poor and the dispossessed. More gifts in this group went to elite prep schools (one, to the Hackley School in Tarrytown, New York) than to any of our nation’s largest social-service organizations, including United Way, the Salvation Army, and Feeding America (which got, among them, zero).

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Underlying our charity system—and our tax code—is the premise that individuals will make better decisions regarding social investments than will our representative government. Other developed countries have a very different arrangement, with significantly higher individual tax rates and stronger social safety nets, and significantly lower charitable-contribution rates. We have always made a virtue of individual philanthropy, and Americans tend to see our large, independent charitable sector as crucial to our country’s public spirit. There is much to admire in our approach to charity, such as the social capital that is built by individual participation and volunteerism. But our charity system is also fundamentally regressive, and works in favor of the institutions of the elite. The pity is, most people still likely believe that, as Michael Bloomberg once said, “there’s a connection between being generous and being successful.” There is a connection, but probably not the one we have supposed.

 

By Ken Stern’s book, With Charity for All: Why Charities Are Failing and a Better Way to Give, was published in February 2013

Elizabeth Warren said that a much higher baseline would be appropriate if wages were tied to productivity gains.

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Digital Vision-Getty Images-Getty Images

What if U.S. workers were paid more as the nation’s productivity increased?
If we had adopted that policy decades ago, the minimum wage would now be about $22 an hour, said Sen. Elizabeth Warren (D-Mass.) last week. Warren was speaking at a hearing held by the Senate’s Committee on Health, Education, Labor and Pensions.

Warren was talking to Arindrajit Dube, a University of Massachusetts Amherst professor who has studied the issue of minimum wage. “With a minimum wage of $7.25 an hour, what happened to the other $14.75?” she asked Dube. “It sure didn’t go to the worker.”
The $22 minimum wage Warren referred to came from a 2012 study from the Center for Economic and Policy Research. It said that the minimum wage would have hit $21.72 an hour last year if it had been tied to the increases seen in worker productivity since 1968. Even if the minimum wage got only one-fourth the pickup as the rate of productivity, it would now be $12.25 an hour instead of $7.25.
Some of the news media took this to mean that Warren is calling for a minimum-wage increase to $22 an hour. That doesn’t appear to be the case. She seems to be merely pointing out that the minimum wage has grown more slowly than other facets of the economy.
Warren is taking some hits on Twitter for her comments. One user describes her as “clueless and out of touch” while another calls her “delusional.” But other users are praising her arguments as “compelling,” saying she is “asking the right questions regarding minimum wage.”
By Kim  Peterson

Folks ages 29 to 37 have watched their net worth plummet over the past few decades, and there are several reasons.

Even after a damaging economic crisis and recession, some American households are recovering nicely. If you’re 47 years old or older, you’ve actually done pretty well in the past few decades.
But younger generations are just getting poorer, according to a new study from the Urban Institute. People younger than 47 just haven’t been able to accumulate much money or build up their net worth through homebuying or other investments.
The authors looked at how Americans’ average net worth has changed from 1983 through 2010 and found a dramatic difference between older and younger generations.
Those 56 to 64 and those older than 74 more than doubled their net worth, with gains of 120% and 149%, respectively. The picture was still rosy for those 47 to 55 and 65 to 73, with a rise in net worth of 76% and 79%.
But all that progress comes to a halt with younger generations. Those 38 to 46 saw their net worth rise by just 26%, and those 29 to 37 saw their net worth drop by 21%.
Why are young people getting left behind? One of the study’s authors, Gene Steuerle, says there are several factors:
The housing bubble. Younger homeowners were more likely to have the steepest mortgage balances and the least home equity built up. Consider a home that fell in value by 20%, Steuerle writes. A younger owner with only 20% equity would see a 100% drop in housing net worth, but an older owner with the mortgage paid off would see only a 20% drop.
The stock market. Older investors were more likely to invest in bonds and other assets that have recovered or gone up in value since the Great Recession.
Lower employment. Younger Americans are seeing higher unemployment rates. They’re also seeing lower relative minimum wages.
Less savings. Younger people are seeing a bigger cut of their pay taken out to pay for Social Security and health care.
“Maybe, more than just maybe, it’s time to think about investing in the young,” Steuerle writes.

By Kim Peterson

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