TIME

How the American Family Has Changed Dramatically

The difference between the haves and the have-nots have never been this steep

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Kentucky Family
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Modern marriage presents something of a conundrum for sociologists. The benefits of marriage have been widely studied; they include better health, better finances and a leg up for children raised in a stable environment. Some studies have even suggested that the legally wed have more sex. Marriage is an attractive enough proposition that people have marched and protested to allow a new subset of people to have access to it. Yet marriage rates are in decline.

In fact, a new book by a well-respected sociologist argues that the American family unit is facing challenges it has never encountered before.

Specifically, the marital decline has occurred among the working class. According to one study, more than 60% of white males aged 20 to 49 with jobs in the service sector, like waiters and janitors, were married in 1960. By 2010 that figure was less than 30%. Among African American men in the same situation the figure is less than 20%.

The non-married are not swinging George Clooney style bachelors who play the field until they find the perfect woman with whom to set up a home. These are usually fathers, men who have children and responsibilities and are often living with the mother of at least some of those children, or have lived with her in the past. They have made a family, but they haven’t founded that family on a marriage.

Meanwhile, for the wealthy, a successful and lasting marriage has become more and more likely. Professional men marry professional women, they pool their considerable resources and spend at least some of them on meticulously raising offspring, who get the best education, enrichment activities and artisanal bread for their lunchtime sandwich. They can afford to outsource or avoid those tasks that cause tension in less comfortable marriages: childcare, food provision, cleaning, unpaid bills, unemployment.

This has led some such cultural critics as Charles Murray to speculate that permissive social norms championed largely by the rich have worsened the struggles of the poor. The rich, argues Murray, can afford to abandon the responsibility of marriage and the loss of its benefits. Yet they do not. The less well-off, who would most benefit from the stability of institutions such as marriage, are disinclined to embrace its strictures.

Other argue, however, that poverty is what’s keeping people from tying the knot. People don’t get married because it brings burden without benefit. Men don’t feel they can support a family, and women don’t want to be tied to a man who may be a drag on her already meager income.

Now Andrew Cherlin, the well-respected sociologist at Johns Hopkins university has weighed in with a persuasive case for a sort of middle ground. In Labor’s Loves Lost (get it? Like the Shakespeare play, only it’s about the loss of love among the laboring class), he traces the course of marriage through history, specifically the history of the economy. Marriage and the economy, he finds are inextricably linked.

What Cherlin finds that this is not the first time that there has been a wide disparity between the marital fortunes of the rich and the poor: the situation looked similar during the last Gilded Age. Inequality in bank accounts and in marital status go hand in hand.

But the cultural critics are not totally wrong. Since the last gilded age, there has been a transformation in people’s attitudes to living together without getting married. Gone is the age of the “bastard,” or the “illegitimate” child. Now, rich and poor alike believe that living together before marriage is a prudent step. (Even though the studies don’t actually confirm that.)

What this means, argues Cherlin, is that we are in whole new territory. “It is the conjunction of the polarized job market and the acceptance of partnering and parenting outside of marriage that makes the current state of the American family historically unique,” writes Cherlin. “There has never been such a large, class-linked divergence in nonmarital childbearing. There has never been such a split between marriage-based families on the top rungs of the social ladder and cohabitation- and single-parent based families on the middle and bottom rungs.”

The gap in the family life of the rich and poor yawns wider that it ever has, and the individuals most hurt by this are, you guessed, it, the children of the poor. The working class have experimented with a new type of family formation that’s not based around the equation of one partner who runs the home front, plus one partner who brings in the income, both of whom throw in their lot together for the long haul, partly because they don’t have to, but mostly becasue that is no longer an option for may of them. The new formulations tend not to be as stable, and instability is sub-optimal for kids.

Cherlin doesn’t have any easy answers for the nasty bifurcation in the family life of America. Somehow, young people have to be persuaded to delay childbirth. Somehow, people have to be educated and trained for jobs that pay enough that they can begin to feel enough ground under their feet to start a more permanent sort of life. Somehow, those jobs, such as those in manufacturing, have to be created.

None of this sounds remotely romantic. But if the crisis in American family life is to be overcome, it’s going to take more than a George Clooney movie.

TIME Innovation

Five Best Ideas of the Day: December 4

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Reimagine your school library as a makerspace.

By Susan Bearden in EdSurge

2. New materials could radically change air conditioning.

By The Economist

3. Ambassadorships are too important to hand out to political donors.

By Justine Drennan in Foreign Policy

4. There’s a better way: Using data and evidence — not politics — to make policy.

By Margery Turner at the Urban Institute

5. The tax-code works for the rich. Low-income households need reforms that make deductions into credits and stimulate savings.

By Lewis Brown Jr. and Heather McCulloch in PolicyLink

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Money

Yes, I Bring My Poor Children Trick-or-Treating in Your Rich Neighborhood

Halloween candy in basket
Getty Images

I am angry because the rich pass on all the resources possible to their children while depriving poor children of access

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This article originally appeared on Patheos.

I know I’m late to the party, but I only just came upon that viral Dear Prudence letter about poor kids trick-or-treating in rich neighborhoods.

Dear Prudence,

I live in one of the wealthiest neighborhoods in the country, but on one of the more “modest” streets—mostly doctors and lawyers and family business owners. (A few blocks away are billionaires, families with famous last names, media moguls, etc.) I have noticed that on Halloween, what seems like 75 percent of the trick-or-treaters are clearly not from this neighborhood. Kids arrive in overflowing cars from less fortunate areas. I feel this is inappropriate. Halloween isn’t a social service or a charity in which I have to buy candy for less fortunate children. Obviously this makes me feel like a terrible person, because what’s the big deal about making less fortunate kids happy on a holiday? But it just bugs me, because we already pay more than enough taxes toward actual social services. Should Halloween be a neighborhood activity, or is it legitimately a free-for-all in which people hunt down the best candy grounds for their kids?

—Halloween for the 99 Percent

Guess what? I am one of those “poor” parents who takes their children trick-or-treating in “rich” neighborhoods. I’ve done it for years, and I’ll be doing it again this Friday. Why? Well if you must know, we live in an area of town that is not set up for trick-or-treating so we have to travel regardless, and I happen to love taking long, beautiful walks through a wealthy neighborhood a mile or so away. But honestly, my reasons shouldn’t matter, because when I read this letter, I see one more desired boundary to circumscribe and trap poor children—to keep them in their “proper” places, the places they deserve.

My kindergartener attends a “poor” school. I’ve looked at the boundary map for her school, and it looks like someone went out of their way to piece all of the poor neighborhoods together while leaving out the wealthier ones. And guess what? Someone did. I researched the backstory, and it turns out that my daughter’s school boundaries were drawn in the midst of some pretty heavy advocacy by some wealthy neighborhoods to stay out. Because apparently my children aren’t good enough for them to send their children to school with.

And I am angry. I am angry because this is about resource hoarding. It’s about the rich passing on all the resources possible to their children while depriving poor children of access to equal resources, and it’s disgusting. We give all sorts of lip service to equality of opportunity in this country, but in actually our social mobility is abysmally low. It is difficult for the children of the rich to fall into poverty, and difficult for the children of the poor to get out. And it is not this way by accident—it is this way because this is how the system set up.

I’m not even angriest for my own children. My children, you see, are not poor-poor. They are graduate-student-poor. Graduate-student-poor is a sort of temporary poor that avoids much of the resource deprivation that accompanies being poor-poor. Other children are not so lucky. Other parents are stuck. It is for these children, and for these parents, that I am angriest.

My husband and I grew up in upper-middle class families. Our parents have college degrees and stable, well-paying jobs. Yet when my husband and I first married, we lived on very little. I learned what it was like to look through the food budget for something to cut or trim so that we could afford to have meat a few times a month. I learned what it was like to beg rides or figure out how to navigate convoluted bus routes because we did not have a car. Our children have been on Medicaid, and our daughter now attends a low-income school. I have learned a lot since my privileged upbringing.

Yet I have not experienced true poverty. Our family has always been there to help us if we really needed, and we have always known that our current state was temporary. Indeed, things are already looking up for us! Someday we will finish graduate school and move, and then be faced the question of choosing a school district. It will be tempting to choose the neighborhood with the best schools, and at that point we will likely have the means to do so. But then, that is what perpetuates the system—everyone grabs the most they can for their children, and at that point I will be in a position to grab more than others.

I can’t say for sure what I will do in the future until I live it. I hope I won’t forget my experience being graduate-student-poor. I hope I’ll live by my principles. I hope I’ll remember what it was like to stand at the checkout shuffling through WIC coupons and holding up everyone behind me, only to learn that I grabbed the wrong brand of grape juice. And I hope I’ll remember what it was to take my “poor” children trick-or-treating in a “rich” neighborhood.

I hope I’ll be part of the solution rather than becoming part of the problem.

Libby Anne is a blogger for Patheos.

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TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Economy

Report: Richest 1% Holds Nearly Half of the World’s Wealth

Luxury Superyachts At The Monaco Yacht Show
A Porsche 918 Spyder automobile, produced by Porsche SE, sits on the deck of the 88m luxury superyacht Quattroelle, in Monaco, France, on Wednesday, Sept. 25, 2013. Balint Porneczi—Bloomberg / Getty Images

A new Credit Suisse report finds the gap between rich and poor widening on a global scale

The world not only surpassed a new milestone of wealth creation in 2014, but the richest 1% now own nearly half of the planet’s wealth, according to a new Credit Suisse report published Tuesday.

The Global Wealth Report estimated that the world’s combined wealth reached $263 trillion in 2014, a $20.1 trillion increase over the previous year. It marked the highest recorded increase since the financial panic of 2007, but the greatest accumulations of wealth occurred at the very upper echelons of earners.

“Taken together, the bottom half of the global population own less than 1% of total wealth,” the report said. “In sharp contrast, the richest decile hold 87% of the world’s wealth, and the top percentile alone account for 48.2% of global assets.”

Credit Suisse also noted widening gaps between the rungs of the wealth ladder: While only $3,650 would place a person in the wealthier half of the global population, $77,000 was needed to reach the top 10% and $798,000 to hit the top 1%.

TIME

Sometimes the Government Puts Money in Our Pockets

Cash Money Dollar Bills
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The percentage of women who get free birth control has skyrocketed since Obamacare went into effect, providing new ammunition for the political wars over Obamacare as well as the cultural wars over birth control. But there’s been almost no attention paid to the practical effect of this trend: It’s the equivalent of a modest tax cut for millions of women whose insurers used to require co-payments. It’s putting money in ordinary people’s pockets.

These days, the big economic story is about inequality, about a recovery that’s benefited the rich more than the poor, about middle-class wages that haven’t increased in fifteen years. It’s an important story. But the storytellers often overlook a variety of public policies that have helped offset the structural trends widening the gap between the rich and the rest. “Instead of promoting equality,” Tom Edsall wrote in a recent New York Times jeremiad, “public policy has…bestow[ed] the benefits of growth on the very few.” In fact, the government has put money into ordinary people’s pockets in all kinds of ways.

The most obvious way has been tax cuts. President Obama’s 2009 stimulus bill—a topic I’ve discussed at some length—included $300 billion in tax cuts, mostly for the non-rich. The centerpiece was called Making Work Pay, which provided up to $800 a year for the bottom 95% of working families, and was later converted into a payroll tax credit worth up to $2,136 a year before it expired in 2012. Most stimulus tax cuts were “refundable,” which meant low-income workers who don’t pay income taxes—the “47 percent” that Mitt Romney was caught denigrating on video—would be eligible to benefit. When Obama famously told former House Majority Leader Eric Cantor “elections have consequences, Eric, and I won,” he was talking about refundable tax cuts for the poor, which House Republicans opposed but could not block.

This extra money for the poor and middle class doesn’t show up in charts illustrating how the rich are vacuuming up all the recovery’s income and wealth. Those charts and the pundits who love them also tend to ignore the impact of Obama’s tax hikes on the rich, especially his repeal of the Bush tax cuts on income over $400,000. In his Times essay, titled “America Out of Whack,” Edsall speculates at length about the impossibility of redistributive taxation in modern Washington, somehow failing to mention that it just happened in a big way last year. As Zachary Goldfarb calculated for a Washington Post piece on inequality in July, repeal cost the average member of the top 0.1% income bracket nearly half a million dollars.

Obamacare is also financed by hefty new taxes on the rich, including a 3.8% hike on investment income and a 0.9% hike on earned income above $250,000. But its main push against inequality will be its health benefits for the uninsured and underinsured. Free birth control is just one example. There’s also free primary care and other preventive services. Families up to 138% of the poverty line are now eligible for Medicaid benefits in participating states. The law also eliminated the “donut hole,” reducing drug costs for seniors. None of this will show up in the inequality data, but it all helps make ordinary Americans less financially insecure. And so far, Obamacare insurance premiums have been significantly lower than expected, which means more money in ratepayer pockets. Jason Furman, chair of the Council of Economic Advisers, says the combination of Obamacare plus progressive tax changes has offset a decade’s worth of rising inequality.

There are many less memorable ways that public policy has tried to narrow the gap. For example, the stimulus, if you’ll pardon my obsession, also sent $250 checks to retirees and disabled veterans, increased Pell Grants for low-income students by more than $600, and expanded unemployment benefits by $25 a week. Oh, and the stimulus—along with the much-maligned Wall Street bailouts and the Federal Reserve’s aggressive monetary policies—helped prevent a depression, a very good thing for the poor and middle class as well as the wealthy and the Dow. The 10 million new jobs created in this recovery didn’t all go to rich people.

The stimulus also financed energy-efficiency retrofits of more than 1 million low-income homes, which will save families money and power for decades to come. And beyond the stimulus, the Department of Energy estimates that the Obama administration’s new energy-efficiency mandates for refrigerators, air conditioners and dozens of other appliances will save consumers $450 billion on their electric bills through 2030. The administration’s strict fuel-efficiency standards for cars and light trucks are expected save drivers another $500 billion. That’s real money.

Even the federal response to the foreclosure crisis, widely perceived as an abysmal failure, has provided financial help to millions of Americans in need. The most important move, widely perceived as a gift to undeserving corporations, was the $400 billion government bailout of Fannie Mae and Freddie Mac, which kept mortgage credit flowing at a time when no one else would provide it, averted a dramatic increase in mortgage rates, and helped 26 million homeowners reduce their monthly payments by refinancing their mortgages by 2014. Federal programs like HARP (which helped 3 million of those homeowners refinance) and HAMP (which helped modify another 1.3 million loans) were slow and often inefficient, but low mortgage rates—maintained by the Federal Reserve’s aggressive purchases of mortgage-backed securities as well as the government backstop for Fannie and Freddie—meant money in the bank for anyone with an adjustable-rate mortgage.

Reasonable people can disagree about whether government should be in the business of redistribution—what Obama called “spreading the wealth” in his 2008 chat with Joe the Plumber—but we should recognize that it is. The inequality trends, as severe as they are, would be far more severe without government intervention. Yes, the average CEO earns almost as much in a day as the average worker earns in a year, but government—through progressive taxation, the safety net, public education and other public services, and the policies of the last five years—has been pushing back.

Is it pushing back hard enough? Well, reasonable people can disagree about that, too.

 

TIME Workplace & Careers

Yes, There Is Diversity in Silicon Valley — if You Know Where to Look

Google Celebrates 15th Anniversary As Company Reaches $290 Billion Market Value
Pedestrians walk past Google Inc. signage displayed in front of the company's headquarters in Mountain View, California, U.S., on Friday, Sept. 27, 2013. David Paul Morris—Bloomberg / Getty Images

Study finds many black and Latino workers toil in the tech scene's "invisible" workforce of cooks, cleaners and guards

A new report on the diversity of Silicon Valley’s workforce has found a preponderance of black and Latino workers relegated to the bottom rungs of the pay ladder.

Working Partnerships USA released a report on Tuesday that drew attention to an “invisible” legion of contracted workers who cook, clean and guard corporate campuses throughout the Valley.

While black and Latino workers comprise less than 5% of the workforce at prominent companies such as Twitter, Facebook, eBay and Google, their representation balloons to 41% among security guards and 75% among groundskeepers, according to employment data released by the companies and Santa Clara county.

Members of this contracted workforce make an average hourly wage of $11 to $14 an hour, or less than a fifth of the average software developer, the study found.

“These ‘invisible’ workers do not share in the success of the industry which they daily labor to keep running,” the study’s authors wrote. “As contracted workers, their employer of record is not Google or Apple, but a middleman, making them ineligible for most of the benefits and amenities offered on the campuses where they work.”

A growing number of tech companies have voluntarily released employment statistics as part of an effort to address gaps in diversity. “As CEO, I’m not satisfied with the numbers on this page,” Apple CEO Tim Cook wrote in a statement accompanying Apple’s release. ‘We’ve been working hard for quite some time to improve them.”

TIME Economics

The Wealthy and Powerful Discover Inequality

President Obama Hosts Summit On Working Families
Goldman Sachs Chairman and CEO Lloyd Blankfein participates in a panel discussion on 'Talent Attraction and Retention' during the White House Summit On Working Families at the Omni Shoreham hotel June 23, 2014 in Washington, DC. Chip Somodevilla—Getty Images

Even the rich are admitting that inequality is bad for business

As the Gilded Age has been peaking, a number of the rich and their foundations have been helping the hungry, the sick, the homeless, the battered, the less educated and veterans in need of opportunity. However, aside from the palliative approach, “the system,” as President Franklin D. Roosevelt liked to call it, until now, has had no serious proactive strategy to address the inequality in incomes and wealth.

The dominant social message has been that for most of the population – the huge middle class – one can work hard and raise oneself up through education, solid contributions, good performance and, ultimately, economic rewards that will be the fruit of these virtues and labor. But there are signs everywhere that this is no longer the case. Wages are flat, returns to education are down, and solid-paying jobs with benefits are the old, not the new, norm. As recent data from the U.S. Department of Commerce shows, employee compensation – wages and benefits – comprise an ever-smaller piece of the economic pie, while wealthy Americans collect significantly more in capital income – interest and dividend payments. As Brookings Institution labor economist Gary Burtless put it, “everything’s coming up roses for people who own a chunk of American capital.” The structure of the economy rewards those who own capital and derive income from that capital. Work hours alone simply do not cut it. Automation and robotization will only accelerate the process.

Who has stepped forward to analyze the problem and start a national conversation about the solution? Many have, but one recent surprising group of trenchant commentators this summer is the wealthy and powerful themselves. In defining the problem of inequality in early June, Goldman Sachs Chairman and CEO Lloyd Blankfein told CBS This Morning that inequality is “destabilizing” and “responsible for the divisions in the country. The divisions could get wider. If you can’t legislate, you can’t deal with problems. If you can’t deal with problems, you can’t drive growth and you can’t drive the success of the country. It’s a very big issue and something that has to be dealt with.” In mid-July, Bill Gross, a billionaire in Southern California and the founder of PIMCO Asset Management, headlined a USA Today op-ed with the claim that “Economic inequality threatens capitalism.” In the piece, Gross goes on to argue that “income equality is good for business” – underscoring this group of observers’ concern that inequality threatens economic growth – and says that solutions to inequality should guide a Republican platform. In the July issue of Politico, billionaire Nick Hanauer wrote a “memo” to his “fellow zillionaires.” As the first nonfamily investor in Amazon.com and founder of an Internet company that sold to Microsoft to for $6.4 billion, Hanauer represents the high technology side of “the system.” His message would be downright scary if it were not written by a billionaire himself. In his piece, “The Pitchforks Are Coming…For Us Plutocrats,” he wrote, “Our country is rapidly becoming less a capitalist society and a more feudal society…. No society can sustain this kind of rising inequality.” In mid-July, Walmart President and CEO Bill Simon commented to Reuters and CNBC that its lowered sales were because the “middle and down are still pretty challenged.” Even philanthropy magazines are filled with worry about the inequality conundrum. Alms for the poor and vulnerable just won’t cut it anymore.

This group has not been shy about discussing possible solutions. Bill Gross called attention to Henry Ford’s “broad-based” solution to expand incomes early in the last century – which echo the generous cash profit-sharing checks on top of wages, which every Ford worker still enjoys today – and suggested large increases in the minimum wage. While not offering specifics, Hanauer suggests our policies must “change dramatically,” and he admits the performance/reward gap of the new economy by saying that “I’m not the smartest guy you’ve ever met, or the hardest-working.” Blankfein’s solution is to “grow the pie” and “distribute it in a proper way.” He lays out this criterion for a solution: “If you grow the pie and too few people enjoy the benefits of it and the fruit, then you have an unstable society.”

The insights from the top do not let up, and their analyses are wide-ranging and sharp. However, “the system” has not been systematic about exploring solutions. If one trolls the websites of the foundations of the rich and powerful, there is a decided lack of willingness to look at systematic economic solutions. Occasional ideas should not be mistaken for careful and deliberate problem-solving on this complex problem.

We will never solve the problem of inequality unless we develop mechanisms for the middle class to share in the ownership and profits – the capital – of the economy. The reason is that the private ownership of capital assets, such as businesses, stocks and bonds, are highly concentrated. Moreover, in 2011 almost 90% of all capital gains and all capital income, such as dividends and interest, went to the top 20% of the population.

One possible avenue is to apply to the middle class at large the approaches that the rich and powerful apply to themselves. Most of their income is from having a share of ownership and profits in businesses. In order to give middle class workers access to these types of capital income, we must dramatically expand the tax incentives for businesses of every size to offer shares of ownership to all of their employees. This ownership can come in the form of grants of restricted stock, stock options, ESOPS (Employee Stock Ownership Plans) and profit sharing, a la Henry Ford. There is a long history of citizen shares in American workplaces since the late 1700s, with many worthy examples among the Fortune 500, high tech firms and the thousands of privately held corporations offering generous ESOPs.

Shares of profits and equity at the workplace will help, but will not be sufficient because much of the population works in the public sector – in the military, government or non-profits. Big ideas are necessary. For soldiers and teachers and others, we need to explore how to apply the lessons of the Alaska Permanent Fund Corporation to the rest of America. The Corporation receives oil and mineral rental, royalty and revenue-sharing payments from corporations allowed to use Alaska’s resources. This capital is invested in a diversified portfolio so that every Alaskan citizen can receive an annual dividend check.

To replicate this arrangement here, assets and leases of the Federal government and states should be made available to private corporations – similar to the Alaskan initiative – in order to pay citizen dividends nationwide. The wind and solar energy fields popping up around the nation should be largely owned by these corporations, as should the wireless spectrum controlled by the Federal Communications Commission and other future technologies receiving tax subsidies funded by citizens at large. States and cities should stop the corporate welfare of huge tax abatements and receive ownership shares to be deposited in citizen share corporations. For example, the DeBlasio Administration should do a top to bottom review of New York City’s tax abatements and monetize them as equity shares for the middle class. These corporations can be licensed by the Treasury and borrow funds to invest in the new technologies and robots of the future. As a sign of hope for the younger generation, we should revisit the idea of Baby Bonds, where an account is set up for each newborn using the same low interest loans that the Treasury and the Federal Reserve recently used to bail out Wall Street and revive its capital ownership. These Baby Bond funds would also be privately managed to be invested in assets that pay regular capital income. Relatives and the rich could make deposits to the accounts, the children could learn how to track them in elementary school, and the dividend income could supplement wages in adult life.

If citizens do not privately own more of the economy, the flat wages of the middle class will never dig us out of inequality. It is time for the rich and powerful to encourage both political parties to set up a national bipartisan commission to explore these and other useful ideas. Charity and philanthropy will never be enough.

Joseph Blasi’s latest book, The Citizen’s Share: Reducing Inequality in the Twenty First Century (written with Richard B. Freeman and Douglas L. Kruse) tells the story of the American history of the shares in business and the economy. Blasi is the J. Robert Beyster Distinguished Professor at Rutgers University.

MONEY real estate

NYC Apartment Building Will Have Separate Door for Lower Rent Tenants. What’s Up With That?

Rich door and poor door
New Yorkers are calling it the "poor door." Sarina Finkelstein—Marcus Lindström/Bronxgebiet/Getty Images

A new luxury high-rise on the Upper West Side of Manhattan will include a separate entrance for tenants in "affordable" housing units.

New York City has approved plans for a new luxury high-rise on the Upper West Side of Manhattan that will include a separate entrance for tenants in “affordable” housing, reports the New York Post. Even the conservative Post manages to see the class angle, calling this a plan for a “poor door.” (The quotation marks are the Post‘s.)

This controversy has been roiling in New York for a while. The Daily Mail unearths a 2013 quotation in a real-estate trade paper from the developer of another project (not the one on the West Side) defending separate entrances. It’s one for the ages:

‘No one ever said that the goal was full integration of these populations,’ said David Von Spreckelsen, senior vice president at Toll Brothers. ‘So now you have politicians talking about that, saying how horrible those back doors are. I think it’s unfair to expect very high-income homeowners who paid a fortune to live in their building to have to be in the same boat as low-income renters, who are very fortunate to live in a new building in a great neighborhood.’

Let’s keep the rich and not-so-rich in separate boats. Nice. You can make arguments for what the developers are doing here—here’s one—but, wow, that’s not it.

If you don’t live in New York and you aren’t familiar with the crazy real estate market here, this story might need a little translation. Your questions answered:

If the developers don’t want to mix different tenants, why include “affordable” units at all?

Because they are getting subsidies—pretty valuable ones—to build them.

There is not enough of any kind of housing in NYC, but housing for people with low-to-middle incomes is especially scarce. The long-term answer to that is to build lots more housing, and there’s a case to be made that building in NYC should just be a lot easier than it is. The fear on the other side is that new construction will mostly go to the luxury end of the market.

One stop-gap has been to encourage developers to encourage builders to include various kinds of affordable units in their projects. There may be tax benefits passed on to buyers of condos in buildings with affordable units, for example. The Upper West Side project, developed by a group called Extell, got zoning rights to build more units, says the blog West Side Rag, and Extell can sell those rights to other nearby developers.

West Side Rag also says the developer argues that, since the affordable units are in a separate part of the building, it legally must have its own entrance. That could have been avoided had the affordable units been mixed throughout the building. But this particular high-rise offers coveted views, including of the Hudson River. Spreading the units around would presumably have meant giving up some prime spots to affordable units, cutting profits for the developer.

What’s “affordable”?

To qualify for these units, a tenant would need to earn less than 60% of the area’s median income, adjusted for family size, says West Side Rag. For a family of four, that’s about $52,ooo a year. That’s twice the Federal poverty line and above the median U.S. household income, though making ends meet in NYC on that much, with a couple of kids, isn’t easy. That family could rent a two bedroom under this program for about $1,100 a month. So yeah, New York’s version of affordable is different than in other places.

MONEY Social Security

Why Taxing the Rich is the Wrong Way to Fix Social Security

ERROL FLYNN as Robin Hood
Errol Flynn, as Robin Hood, leading an early fight against income inequality. WARNER BROS/RGA/Ronald Grant Archive/Mary Evans—Everett Collection

It may feel good to jack up payments by wealthier earners, but Social Security is a safety net, not a tax collector.

How do you categorize the money that comes out of your paycheck to fund Social Security? Do you consider that deduction to be a tax, or a mandatory contribution into a retirement account, or an insurance premium?

For many people, the answer is a tax. That’s what I heard from the majority of readers who responded to my most recent column, “3 Ways to Fix Social Security and Medicare.” It’s an understandable view. After all, the Social Security payroll deduction is commonly referred to as a FICA tax. (FICA is the acronym for Federal Insurance Contributions Act.) And because it’s called a tax, these readers think that Social Security reforms should focus on making wealthier wage earners pay more into the system. Making all wage income subject to payroll taxes would solve between 75% and 80% of the system’s funding shortfall.

I don’t agree with this approach, as I’ll explain. Still, these readers have plenty of company, including some leading critics of Social Security, who argue that payroll taxes are less progressive than the federal income tax. Everyone who works in a job that is covered under Social Security rules pays the same rate: 7.65% of their earned income up to an annual ceiling of $117,000 in 2014; the level is increased annually for inflation. Employers pay another 7.65%. (These totals include 6.2% for Social Security and 1.45% for Medicare.)

The way Social Security’s benefits are designed, at this year’s $117,000 income level, you receive the maximum credit—those earning higher salaries would not qualify for any more benefits. That’s why requiring wealthier people to pay even higher taxes without any additional income would break the implicit bond between your contributions and the benefits you may receive. And the move would certainly undermine support for the program.

Whatever Social Security lacks in progressive taxation it more than makes up for in the benefits it pays out, which are heavily weighted toward lower earners. Here’s how: The program breaks a person’s lifetime earnings history into three dollar segments that are divided by so-called “bend points.” Adjusted annually for inflation, the bend points are $816 and $4,917 in 2014. For the first $816 of your lifetime average monthly Social Security earnings, 90% are credited toward your monthly benefits. Between $816 and $4,917 in earnings, only 32% are applied to benefit entitlements. And for average monthly lifetime earnings above $4,917, only 15% are counted in determining your monthly retirement benefit.

Add it all up, and lower-income retirees wind up with Social Security benefits that make up a much higher portion of their pre-retirement incomes, typically 50% or more, than wealthier households, which may receive less than 20% of income from these benefits.

That payout usually exceeds the amount that lower-income beneficiaries put in, according to research by the Urban Institute, a Washington non-profit. (That’s notwithstanding the mantra of groups pushing to protect and even expand Social Security: “It’s Your Money; You Paid for It.”) The difference between the amount lower-income households pay and the benefits they eventually receive comes out of the pockets of higher-paid workers.

Of course, balancing Social Security by jacking up payments by wealthier earners feels good to many people and may even seem fair. But let’s try a thought experiment. What if Social Security worked like a 401(k) plan—you contributed a percentage of your salary, often matched by an employer contribution, and the account grows tax-deferred until you withdrew it at retirement. If I put $5,000 a year into my 401(k), but you earn more and can put $20,000 into yours, is this unfair? Should some of your contributions be placed instead inside my 401(k) simply because you make more money?

If you think Social Security is different from a 401(k), then you must also be viewing it at least in part as a welfare program that should be taking assets from the top 10% and distributing them to the other 90%. I don’t share this view, but I would support boosting the earnings ceiling by a hefty amount. Payroll taxes used to catch 90% of all wages. After years of lopsided wage gains by wealthier persons, only a little more than 80% of wages is currently subject to payroll taxes. It would be a reasonable move to restore the original level of taxation.

Even so, Social Security’s primary mission is to provide retirement security—a safety net that would help keep aging Americans out of poverty. It was not supposed to be a tax collector. That’s why I think the best way to look at the program is as a form of insurance for longevity, rather than an investment that should give you a better-than-break-even rate of return.

So if you believe that wealthy people should pay higher taxes, change the tax code. Don’t look to Social Security to do this work for you.

The Committee for a Responsible Federal Budget, a Washington non-profit, has a Social Security calculator showing reform options and their impact. If you use this tool, we’d like to hear how you would reform Social Security, so please share your ideas. We’ve all got a stake in this.

Philip Moeller is an expert on retirement, aging and health. He is an award-winning business journalist and a research fellow at the Sloan Center on Aging & Work at Boston College. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

TIME Race

Study: Little Progress for African-American Men on Racial Equality Since 1970

Rates of incarceration and unemployment remain high

In recent years, the U.S. has celebrated the 50th anniversaries of the March on Washington, the Civil Rights Act and a number of other landmark accomplishments considered pivotal in making the U.S. a better place for African Americans.

But despite a deep reverence for those accomplishments, a new study suggests that African-American men today face such high levels of unemployment and incarceration that they are in little better position when compared with white men than a half-century ago.

The working paper, by University of Chicago researchers Derek Neal and Armin Rick, is based on preliminary findings and has not yet been peer-reviewed.

“The growth of incarceration rates among black men in recent decades combined with the sharp drop in black employment rates during the Great Recession have left most black men in a position relative to white men that is really no better than the position they occupied only a few years after the Civil Rights Act,” the study reads.

The study uses census data to show that more than 10% of black men in their 30s will be incarcerated at some point during a calendar year. This number was around 2% for white males of the same age group.

The study attributes the corrosive impact of incarceration on the African-American community, at least in part, to the institution of more punitive criminal-justice policies.

African-American men also appear to face a more difficult employment situation. More than a third of African-American men between the ages of 25 and 49 lacked employment in 2010.

“The Great Recession period of 2008–2010 was quite bleak for black men,” the study reads. “Recent levels of labor market inequality between black and white prime-age men are likely not materially different than those observed in 1970.”

[FiveThirtyEight]

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