Cash Flow is Huge for Low-and-Moderate Income Families

Money coins fall out of the golden tapNew Orleans   In reckoning with the daily, survival and success struggles of low-and-moderate income families given the myriad of challenges they face, sometimes the experts stumble over the obvious in one of those, “Oh, yeah!” moments that we all have. Reading a recent copy of Shelterforce magazine, there was an article called “Is Financial Unsteadiness the New Normal” by Jonathan Morduch and Rachel Schneider which offered a case study of just such a moment. They examined the demands of financial security for lower income families closely and argue that in addition to looking at income, especially annual income, and assets, as paltry as they are, we need to look at cash flow to understand the full dimensions of citizen wealth for such families. Now, we can all say together, “of course!”

In dealing with the crises facing such families in our increasingly inequitable society, economists have long noted that assets have fallen to hardly above zero for many families, especially in the wake of the clawback of home ownership for minorities. The Pew survey folks have found that 41% of all households have less than $2000 in liquid savings. Other reports have noted that many families do not have the liquid resources to deal with a financial crisis of even $400 without help from family, friends, or lady luck.

The authors point out that looking at their US Financial Diaires Study Households of about 235 families in California, Mississippi, Ohio-Kentucky, and New York City they found some discomforting information,

“…we found…evidence of a lot of volatility within the year. On average, families in the study had more than five months a year when income was 25 percent above or below their monthly average. For example, a household making $36,000 a year isn’t necessarily making $3000 a month. Based on our data, for more than five months a year, that family will earn less than $2250 or more $3750.”

All of which makes it hard to save and hard to spend and contributes to the problem. The irregularity of a families’ income stream means the issue for many is more “illiquidity than insolvency.”

The issue is so severe that the author’s cite a report from the Consumer Financial Protection Bureau and Pew people that 85% of the 2000 households surveyed would prefer financial stability over “moving up the income ladder.” In essence, people are voting give me stability rather than stress even if it means less cash and a lower lifestyle: a good bird in hand, rather than who knows what in the bush.

The authors found that this illiquidity creates a snowball effect on other issues as well. These are not problems solved by the bankers favorite stopgap of “financial literacy” programs either. People are very well informed that they have irregular income, and given the rise of the contingent employment and informal employment economy, they know there are going to be ups and downs. When I was organizing hotel housekeepers and other hospitality employees, all of them knew they were going to be hurting for money in the New Orleans summer as well as over Thanksgiving and Christmas holidays when the room count was down, but that didn’t mean they could grow other dollars on different trees, though many tried, more fail.

The authors correctly point out that this makes budgeting horrific, and exacerbates the affordable housing dilemma for low-and-moderate income families. You can forget about home ownership if your income never gets to the point where you can create a down payment. Of course the home ownership model for citizen wealth for lower income families is already severely challenged, if not destroyed, but recognizing the role of cash flow puts another nail in the coffin of that dream rather than in the beams of a new house.

Representing school workers in Texas who have an option of choosing to receive their money year round rather than just during the school year, our union can see that some employers have long understood the simple facts of cash flow, but clearly as Morduch and Schneider point out, that’s not enough to start seeing a solution to the problem even if underscores the continuing crisis. This is a “new normal” or a clearer picture of the old normal hardly matters, it’s a huge barrier for millions of families and getting bigger, not smaller.

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Hot Check Court Another Debtors’ Prison for the Poor

Sherwood's Hot Check Court Arktimes

Sherwood’s Hot Check Court arktimes.com

Little Rock   My brother-in-law and I agree on a million things, but those are family things, construction projects, upkeep of my trailers, automotive advice, and fixing anything and everything, but we do our best to NOT talk about politics, because he’s what you might call a Huckabee-man in Arkansas terms, and I’m anything but. We know where each other stands, so we know how to walk around most of the rocks in the road. This morning at dawn before I pulled out he said, “You got to see this!” He was following the news on Facebook, so I went over and looked over his shoulder where he was pointing. “Do you know about the “hot check” court? They’re running a debtors’ prison over in Sherwood.” I was all no, yes, and out the door. What the heck was a “hot check” court?

He was on to something though. Out of curiosity, I googled hot check court in Sherwood, which is a suburban enclave in Pulaski County across the Arkansas River and up the road from Little Rock. What you find with Google’s help is that, yes indeed, the City of Sherwood actually has a “Hot Check Division” of the Sherwood District Court of Pulaski County. How could it be that this little town has enough hot checks to have its own division? Are people driving from all over the county, the state, and the South in order to try and pass hot checks? The answer is, yes, sort of.

What had caught my brother-in-law’s eye was that the ACLU and the Lawyers’ Committee for Civil Rights Under Law had joined to file a suit for several defendants over the practices of this hot check division arguing that they were effectively running a court as a money printing machine exploiting low income defendants by larding on fines, court costs, and penalties connected with the original offense to milk the defendant and when they couldn’t bleed them dry, they were jailing them to keep the system going. The lawyers weren’t shy about referencing how similar this Arkansas mess was to Ferguson, Missouri where this was a system on steroids. They were also quick to mention that the Justice Department had jumped in and sued several venues around the country for using minor infractions as cash machines for their towns and cities.

In a report by the Associated Press one plaintiff is a good example of this system:

The plaintiffs in the case include Nikki Petree, a 40-year-old Arkansas woman who has been in jail for more than 25 days because she was unable to pay more than $2,600 in court costs, fines and fees related to a bounced check she wrote in 2011 for $28.93. According to the lawsuit, Petree initially faced $700 in court fines, fees and restitution, but the amount ballooned over the years due to related failure to appear and failure to pay charges.

The City of Sherwood of course denies everything. Their claims though seem hollow. They argue that it is only after the third or fourth hot check that they jail someone, and that they offer payment plans to resolve the earlier problems. I’m sure no one has every bounced a check, which is what a hot check is, essentially an NSF or non-sufficient funds matter, but these days if you are on not on top of your balances or a deposit goes bad, you could bounce a half-dozen checks in one sitting, bing, bam, boom! And, the City is in cahoots with the County, because Pulaski County has been sending over hot checks for more than 40 years to Sherwood to crank this ATM for them.

The AP reports that this adds up to a pretty penny.

The groups say Sherwood relies on the hot check fines and fees as a significant revenue source for its operations. The city’s receipts from district court fines and forfeitures were estimated to be at least $2.3 million in the 2015 fiscal year, Sherwood’s third-highest revenue source after city and county sales taxes, the lawsuit said.

Before you start South-bashing and pretending that this is just something you find in the backwoods or in broke-ass states like Arkansas, the lawyers are clear this situation exists in a lot of counties around the state for sure, but all of us know that this is common increasingly all over the South and the country, and certainly not confined to Missouri, Arkansas, North Carolina, and other places that have been in the news for creating modern day debtors’ prisons on the backs of the poor in order to avoid fair taxation and harder political choices.

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What Happened to Community Economic Development Strategy?

Civil Rights activists with the Mississippi Freedom Labor Union occupied one of the empty buildings at the airbase to protest poverty, homelessness and political repression in the Mississippi Delta. Greenville, MS January 31, 1966.

Civil Rights activists with the Mississippi Freedom Labor Union occupied one of the empty buildings at the airbase to protest poverty, homelessness and political repression in the Mississippi Delta. Greenville, MS January 31, 1966.

Greenville, Mississippi    Driving between New Orleans and Little Rock on my monthly route to oversee the 100,000 watt KABF in Little Rock and our union operations in Arkansas, you hopscotch from Vicksburg, Mississippi on Interstate 20 to Tallulah, Louisiana in one of the poorest parishes in that state, and go north on highway 65 through Sondheimer and Transylvania until you cross into Arkansas and Eudora. When you come to the dead end at the lake, you can either go left to Lake Village and on up to Little Rock or go right for sixteen miles and cross a modern newish bridge over the Mississippi and land in the delta town of Greenville. I had heard there was a small radio station facing some challenges in Greenville and though I had been missing a connection, it was only a half-hour out of my way to do some cold doorknocking and see if there was any way I could lend a hand.

I was interested in more than WDSV 91.9 FM and 1500 watts of power. In trying to track down the folks at WDSV, I had hit the web to see if MACE, Mississippi Action for Community Education, was still alive and well. It turned out that in fact the old “twin” organization, the Delta Foundation, was actually the license holder for WDSV. When ACORN was still a young organization in Arkansas and starting to expand, we would frequently cross paths with MACE and the Delta Foundation. Funders would ask how we were different and in some cases, suggest we should stop this community organizing stuff and just do economic development like Delta. Ed Brown, the founder of the Delta Foundation was from Baton Rouge, and was helpful when I was opening the ACORN office in New Orleans where he was living then before moving to Africa and later Atlanta. Charles Bannerman, his assistant from New York City, who ended up as the executive director of Delta was a legendary fundraiser and the darling of foundations, large and small, until his untimely death, and many ACORN leaders and organizers were Bannerman fellows over the years, which has become his legacy. Larry Farmer, the MACE community organizer, was my buddy and ally on the Youth Project board. I had been out of touch for decades, so it was worth a detour just to see what was up.

The Mississippi delta is one of the lowest income areas in the country and with its African-American majority the scene of civil rights struggles that in many ways haven’t ended yet. Economically, when you drive through Greenville, you see an abandoned housing project, for sale signs on empty warehouses, and downtown vacancies side by side with current commercial operations. When people talk about economic recovery, the conversation lingers over decades rather than just the last few years.

The Delta Foundation’s building was big and on Main Street. They had been in the small, select group of organizations that were the model for what community economic development might mean in the 70s. Two ladies saw me in the parking lot looking across the street at two radio stations. I was wondering if WDSV was over there, rather than here. They said, no, and showed me the side door where you entered the building. A woman operating a site where you could enroll in pre-TSA airport screening, helped me find the station and called up for folks to come visit with me. We then had a productive session that finally had to end after three hours so I could get on to Little Rock.

Visiting with them and with one of the original founders, Spencer Nash, who was on his way to retirement and had come back to Delta and Greenville from McComb where he had been a judge to run the organization. There had been some problems and a significant debt had to be retired, but in talking with him, it was clear the challenges were deeper than that for Delta. Their strategy had been to buy small manufacturing plants to create jobs in the Mississippi delta region. I asked him about a plant that I remembered they had bought in Memphis that made window fans. Long gone. Nash told me they had also recently sold their plant in Little Rock where they made retractable attic stairways. They had one small manufacturing operation still in the Greenville area. What happened? Nash said that competitors had moved to Mexico, and the Delta couldn’t compete on the labor costs. They provided loans and other small services now in addition to operating the radio station. In some ways their highly touted economic development strategy had been collateral damage swept up by the tidal wave of globalization that has exacerbated inequity by obliterating decently waged manufacturing jobs.

Seems like for this strategy to have continued to work, we would have needed a policy that “sheltered” job development projects like those owned by Delta from NAFTA and the backwash of globalization. We didn’t. And, we won’t, and it’s too late now. AM/FM, KABF, and WAMF, will help WDSV become a community force for our friends in the Delta, but there needs to be a broader and more effective strategy that works for today. Nash told me that my friends and comrades had now all passed away as well, but the problems remain and the banner has to be carried forward!

***

Please enjoy Dwight Yoakam’s Purple Rain. Thanks to KABF.

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Where You Live Could Kill You Faster

SSM Population Health

SSM Population Health  Age-standardized annual probability of death among U.S.-born women aged 45–89 years.

New Orleans    Many of us live where we live, where work has brought us, or where family keeps us. Maybe we live where we have come to love the land or the local culture? Maybe we live where we managed to hang on to a house or bought a small piece in a patch where we thought we might want to spend lots of time someday or some summer when it was too hot, or winter when it was too cool. None of us probably include in the equation that by living one place or another we could literally be bringing reality to the expression, “I’m dying to live there!”

Sadly, studies are now emerging that go to the heart of why life expectancy has been lagging, particularly for American women, although American men are not gaining much time these days either. Looking at extensive population data, researchers are finding that discounting all other factors including wealth, employment, and marital status, where women live could mean life and death. Since where you live could also impact on issues like whether or not your state has favorable maternity and parental leave policies, this hits women particularly hard, and could take years off their lives. Social and economic scores were critical because advancing inequity where you live also is not just an issue of justice, but life itself.

In studies being published in SSM Population Health and reported by the New York Times, the residential life lottery ranks the states with the best scores as Hawaii, Nebraska, New Hampshire, North Dakota, South Dakota, and Vermont. Good news for them, but bad news for many of the rest of us, since other than Hawaii almost nobody lives in the other states on that list, and even fewer want to move there for goodness sakes. Other than Hawaii, these are also just about lily white states, which quickly brings us to the states with the worst scores and you can hear the sounds of “Dixie” playing in the background: Alabama, Florida, Louisiana, Mississippi, and New York. Huge income inequality accounts for New York being part of the New South. For women, the list was not much different. The best were Hawaii, Nebraska, North and South Dakota, and Minnesota made this list as well. Women hit hard luck in a different array of states though which included Nevada, Tennessee, Virginia, West Virginia, and Wyoming.

All of this is in spite of the creation of Medicaid and Medicare over the last 50 years, and even more recently the Affordable Care Act. Looking at the states in-and-out of Medicaid expansion didn’t solve the problem. In the worst list, only New York had expanded coverage until Louisiana just came onto the list. In the best, South Dakota and Nebraska rank high, but haven’t expanded while Nevada and West Virginia drag down even though they have.

All of which means there is no quick fix to this. It’s not a matter of just figuring out where the best hospital in your community might be. It’s got to be the pretty much the whole package of social and economic improvements to lengthen lives of both men and women.

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Anti-Union Forces Leaving the Courts and Statehouse to Hit the Doors

LAP-opt-out-FEATURED

Freedom Foundation Campaign Ad

New Orleans   The assault on unions is getting very personal. The legislative and legal attacks are part of the environment of constant struggle between unions and companies of course. People try to talk about America as a classless society, but when it comes to the labor-management tussle at work and in community, the class struggle is still part of the everyday experience.

Recently this has been politicized more crisply, especially after Citizens’ United and the surge of money into politics, when mega-rich, hyper-conservative gazillionaires realized that unions were one of the few institutions on the other side of the political divide that had the base and motivation to cobble together the dollars to meet them partway. What started with hate then morphed into strategy, and from there the tactical targets were clarified.

The right realized that the deep labor union pockets were still in the public sector since the industrial and private sector membership was falling like a rock towards 5% membership, if not below. If public sector unions and their membership could be eroded, then there was an almost open field for the right. So we’ve had Harris v. Quinn that broke union shop for homecare workers starting in Illinois. We’ve had near misses for union shop for school teachers with Justice Antonio Scalia’s death allowing us to dodge the bullet. And, thanks to the Koch brothers and their allies with ALEC, we’ve seen one statehouse and legislative chamber after another go right with new right-to-work campaigns and successes even in states like Michigan, an evisceration of public employee unions in Wisconsin, withdrawal of recognitions for lower wage workers in homecare in Michigan and Ohio, and more.

Now, they are engaging in hand-to-hand combat with teams of canvassers going door-to-door to attempt to convince union members to drop their membership and leave their unions. The Wall Street Journal reported on this new alarming anti-union tactic. A group called Freedom Foundation has raised a budget of more than $3 million in 2015 to employ hundreds of outreach people to work the list of union members in Oregon and Washington, available through public information, and do home visits with the sole purpose of getting home health and home childcare workers to withdraw from their union, which is the Service Employees International Union in this instance.

Tom McCabe who heads the Freedom Foundation claims that they have “knocked on the doors of about 15,000 home health-care and child-care workers out of about 50,000 overall in Washington state since July 2014.” He also claims he is targeting about 35,000 workers in Oregon. He also claims “the number of unionized child-care workers has fallen by 60% since he started the effort.” If true, they might have done 4000 or so home visits and convinced a couple of thousand workers to drop their membership at a cost of about $1500 per drop. That might make his program too pricey even for the mega-rich. Putting even more cold water on his claims, the head of the union in Washington, David Rolf, was quoted as saying that McCabe, “talks a big game, but they just aren’t having the impact they claim to be having.”

I’m sure Rolf is right, but that doesn’t mean this is any less painful for the union. This is about money. This kind of door-to-door, hand-to-hand combat means that a good part of the money the union might have spent on “offense,” in expanding rights, wages, and benefits for its members or new organizing, is now having to be spent on “defense,” to put organizers and others in the field to offset withdrawals and increase membership percentages. The objective of the conservative forces is to reduce labor’s expenditures on politics, and a field program like this has to be met in full and in force, allowing conservatives to win at either heads or tails if they reduce the level of contributions unions can make to advance their members’ interests.

The article in the Journal was obviously sales-and-promotion for McCabe and his so-called Freedom Foundation. He says he wants to take this door-to-door attack to California, Illinois, and Pennsylvania. We better hope he doesn’t succeed, but in the meantime, his advertisement, needs to also be our call to action.

Freedom Foundation Door Knockers

Freedom Foundation Door Knockers

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Crisis in Home Ownership for Working Families and Minorities

San Jose much for sale but few are being sold (Karl Mondon/Bay Area News Group)

Much for Sale in San Jose   (Karl Mondon/Bay Area News Group)

New Orleans   Something big is happening in housing. Maybe big and bad. Maybe big and unknown, but scary in its uncertainty for the future.

Here are the facts that frighten.

Home ownership dropped again in the last quarter of 2016 and when it did so, it fell below 63% to the lowest level in 50 years.

Mortgage loans to African-American families fell in the review period between 2004 and 2014 from 7% of total mortgages for blacks to only 5% of mortgages issued. Hispanic families budged up slightly from 7 to 8%, Asian families stayed at 5%, and mortgages to white families zoomed up from 58% to 69%.

This analysis of Home Mortgage Disclosure Act data was done by the National Association of Real Estate Brokers. They argue in their report that this drop has to do with a tightening of credit standards after the 2007 housing meltdown. Couple that information with another recent statistic that prices in the housing market now are only 2% lower than their historic highs achieved in 2006 before the bubble burst. For the real estate brokers, it is in their interest to have their cake and eat it, too. A return of high prices means happy days for them. Claiming the decrease in much of minority-based lending is based on a change of standards, rather than a clearer manifestation of discrimination is also squarely in their interest.

The Wall Street Journal reported that one of the reasons that minorities are getting a smaller share of loans is the return of the jumbo mortgages to “more affluent borrowers with loans exceeding $417,000.” Mumbo-jumbo. Report after report also indicates with this surge in pricing what used to be “jumbo,” is now just standard operating procedure. Average housing prices have now hit $1 million San Jose for example. Meanwhile other reports speak to housing and income growth in center cities around the country, including in areas like Detroit and Philadelphia and deterioration of income and housing prices and values in working class areas of cities, along with the paradox of millennials wanting to live downtown which is pushing the prices up now, while Pew Research surveys are also saying they are only committed to living downtown for five or ten years. What then?

Anyway we shake-and-bake these figures, it is hard to maintain a belief that that part of the American Dream that included home ownership is still alive. We can’t have both stagnant incomes and rising home prices with narrower lending parameters and believe that home ownership can increase among low-and-moderate income families. The conservative blame-game that tried to saddle the housing collapse not on Wall Street recklessness but on lax lending standards has mutated into a form of de facto national housing policy.

Does that mean there will be more affordability in the rental market? There’s no indication of any new trend there, and in fact market-rate construction for the millennials is still the driver. Meanwhile neither political candidate has a program around housing, much less affordable housing, and if values are falling in low-and-moderate income communities that are not on the gentrification list, that also means that citizen wealth will continue to drop like a rock.

Housing is now on the trajectory from problem to issue to crisis, and the silence around solutions is depressing and deafening.

***

Please enjoy East Coast Girl by Butch Walker. Thanks to KABF.

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