Discrimination by Math

5399389a5e1ae61cf1eda5d0e84ef070Seattle   Having spent a week in Juneau, Alaska working with men and women dealing daily with the stigma and discrimination that comes with mental health challenges and disabilities, I should have been prepared for Cathy O’Neil’s Weapons of Math Destruction and its warnings of the pervasive, powerful, and often destructive and discriminating role that Big Data and the algorithms it is fueling are having on all of our lives. I wasn’t. But, I also wasn’t surprised.

One of the issues I heard about from the members of MCAN included being fired from jobs in violation of the Americans with Disabilities Act (ADA). They didn’t know the half of it! O’Neil detailed the way that huge employers including lower wage service establishments like McDonalds and others are using personality tests with data driven questions that sort out people with any kind of mental health issue. A lawyer in Tennessee watched his son, a super student with two years at Vanderbilt University who had dropped out for a couple of semesters to deal with depression successfully, somehow failed to land any minimum wage jobs as a janitor, burger flipper, and so forth from a number of companies using the same blunt instrument of a personality test. He filed a ADA class action suit that is still pending. Even that may be only the tip of the iceberg since data driven, resume reader machines are also discarding applications with a few misspellings, bad typos, and other trivialities.

These WMD’s, as O’Neill cleverly calls them, are perhaps most destructive when it comes to the way too many of them from police and crime statistics to loan applications to even the efforts to get insurance or an apartment from a landlord are discriminating, often invisibly, based on the zip codes identifying where someone lives. The question may never say race or risk, but the zip code identifying the neighborhood plots the Big Data odds, and they do not stack up in your favor. Stop and frisk programs, common under New York mayors Guilliani and Bloomberg and now touted by Trump, under analysis revealed huge racial profiling and targeting of African-Americans and Latinos because of misapplied and understood algorithms.

It was also disconcerting, given our long experience in the United States and Canada in providing service at citizen wealth centers for low-and-moderate income families to find that algorithms employed by payday lenders, diploma mills, and other shyster, predatory operations that are datamining names and contact information from people who are going online to ask for information and access to programs to provide them advice or assistance. I shouldn’t have been surprised. I can remember complaining to our tech people years ago when we used Google Ads about the fact that I could be writing a Chief Organizer Report on our fights against payday lenders and find, embarrassingly, ads running alongside my blog for some of the same blood sucking, scammers I was calling into account in the paragraphs next to their ads. Duh!

It goes on and on. O’Neill cautions that there are dangers here, and they need to be regulated not just for privacy along the European opt-in system, but for transparency. If you ever thought, even for a second, that some of the “value-added” tests for teacher evaluations that many states have employed were valid or about the meaning of things like body-math-indexes and wellness, your application for McDonald’s would also probably be rejected.

She does argue that it is not the math’s fault, as much as the way the math is being used. With a different objective some of the same algorithms could be pointing people in the right direction, connecting them with resources, getting them out of prison, rather than in, and into a job rather than out on the street.

There seems to be no mathematical formula on when that miracle might happen.


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.


Precarious Employment Spreading in USA

working-at-living-croppedNew Orleans       Unstable and precarious employment and income is something that every union organizer in labor unions involved in the service sector recognizes as a daily fact of life for workers.

In Walmart, 1o years ago, just as it is today, we organized Walmart workers in Florida against the computer scheduling from Bentonville, Arkansas that would take them from 40 hours to 24 hours to 16 then back to 32 and anywhere they felt based on their algorithms.

In nursing home, home care, mental health centers, head start work, childcare centers, schools, and countless other service sector work, our members and other workers live with seasonal work, and sometimes no unemployment benefits, standard shifts are often 35 hours or 32 hours, and with the pressure of the Affordable Care Act mandate dipping below 30 on an average to escape payment.

Now new reports are coming down on us like a hard rain as others discover and document this increasing precariousness.

· A 2012 study by government and university economists found that “household income became noticeably more volatile between 1970 and the late 2000s” despite a period of “increase stability throughout the economy as a whole.”
· A 2013 Federal Reserve report according to the New York Times, “suggests the problem has not only persisted as the economy recovers, but may even have worsened. More than 30 percent of Americans reported spikes and dips in their income. Among that group 42 percent cited an irregular work schedule; and additional 27 percent blamed a span of joblessness or seasonal work.”
· U.S. Financial Diaries has released an in-depth report on low-and-moderate income families and finds that almost all of them “experienced a drop in monthly income of at least 25 percent in a single year.”
· There are now 7 million people working part time in the US who indicate that they would prefer full-time work but can’t find it, accounting for 4.5% of the workforce, almost double the figure before the recession.

Given this internal, hidden inequality it should not come as a surprise, as organizers also find routinely, that many lower income, lower waged families view financial stability as a higher priority than higher wages or advancement. The bird in the hand can be eaten, while the bird in the bush, no matter how close, can easily disappear leaving the family in bad straits.

Is there a plan? No way!

In fact, a Department of Labor study of the records of 300,000 minimum wage workers in New York State and California found that employers routinely short pay 3.5 to 7% of all such workers. Extended and supplemental unemployment benefits have been caught repeatedly in Congressional deadlocks as well. Families caught in these crises are then caught in cycle of dependence on our families, relatives, predatory loans, and whatever it takes to pay the bills.

Are we responding by organizing these workers aggressively? Not so much.

All of which indicates that this is a mess that stands to continue to worsen since there still appears to be no light at the end of the deep tunnel where so many US families are currently falling.


Raising Retirement Age is the Poor Subsidizing the Rich!

New Orleans   Before complacency sets in and you pinch yourself and say, “Hey, I’m feeling ok, I can make it some more years, so if they cave in and let the Republicans raise the retirement age, maybe it’s no big deal,” you need to pinch yourself harder where you keep your wallet or pocketbook and remember that those extra years really may be a matter of little more than how much money you have.  A story recently by Michael Fletcher in the Washington Post brought the numbers all back home.

            All of the talk about how we’re living longer so we should shore up Social Security by stretching out the retirement age is based on a myopic view of class status.  Listen to this:

“’People who are shorter-lived tend to make less, which means that if you raise the retirement age, low-income populations would be subsidizing the lives of higher-income people.  Whenever I hear a policymaker say people are living longer as a justification for raising the retirement age, I immediately think they don’t understand the research or, worse, they are willfully ignoring what the data say.’”  Maya Rockeymoore, Global Policy Solutions.

The Social Security Administration in a fairly recent study Fletcher cited found that life expectancy for male workers had gone up 6 years in the top half of the income brackets but only up 1.3 years in the bottom half.   In the last 30 years as income inequity has accelerated the gap in life expectancy based on income, according to the Congressional Budget Office, has risen from 2.8 years to 4.5 years for the rich.

Eric Kingston of Syracuse University and co-chair of Social Security Works, which opposes reducing the old-age benefits, makes the great point that the income gap of life expectancy it “…would mean a benefit cut that falls heavily on people who generally are most reliant on Social Security for their retirement income.”  He added unnecessarily, “It is totally class-based.”  Amen!

In fact according to Health Affairs, Fletcher cites the fact that “in half of the nation’s counties, women younger than 75 are dying at rates higher than before.”  This is true particularly of lower income white women, and women in the rural South and West, where poorer women are getting worked too hard and hung up wet.

When the subject is Social Security, the pencil pushers working for the richer “haves” are literally killing us at the lead point of their budget discussions.  This is neither right, nor fair, to working people in America who should have the right to retire with the same dignity that they tried to live.


Protecting Insurance Company Profits under Obamacare

New Orleans   I had to read the article by Robert Pear of the New York Times  three or four times to completely understand the contradictions that now seem to exist under the new Affordable Care Act or Obamacare.  The headline said, “Employers with Healthy Workers Could Opt Out of Insurance Market, Raising Others’ Costs.”  What’s the issue here?

The article seemed to highlight a contradiction somewhere between the chicken and the egg.

Facing the requirement that employers with over 50 workers mandatorily have to provide health insurance by January 2014, some employers who are not currently providing insurance are initiating plans to do so.  I thought that was a good thing and how could it be anything other than a social benefit for the workers.

Some employers with relatively healthy and presumably younger workforces are initiating self-insurance plans rather than paying the exorbitant and escalating prices of private insurers.  The Township of Freehold in New Jersey with 260 workers began self-insuring and said, “We expect to stabilize our rates and keep the money we save, rather than giving it to health insurance companies as profit.”  That sounds exactly right to me.

In fact thirty years ago that is exactly the “what” and “why” of what ACORN did after a premature baby skyrocketed the group coverage rates from Liberty Mutual to unaffordable levels.  We moved to create a separate fund fueled by the same contributions we were making to Liberty Mutual and paid out at the same standards they had used.  We bought stop-loss coverage on the health fund against the re-occurrence of catastrophic claims and then several years later converted the plan to a Taft-Hartley multi-employer fund for various reasons.  That fund paid for a score of children born to the staff and handled a raft of serious claims successfully until it went out of business with ACORN.  We could do that largely because the initial group being insured was relatively young and the fund was allowed to grow with steady contributions as the organizations became larger and some of the group got older.

It seems this is now a problem.  The concerns Pear was reporting were that small employers with younger workforces would do just as ACORN did, begin self-insuring and buying stop-loss coverage.  Huh?  Isn’t this still a good thing?  The companies were not offering insurance and now are providing their workers with health care.

One issue raised in the article was that stop-loss insurers are regulated differently under the law than other insurers so that they can decline coverage to groups where they assess the risk as higher.   In my way of thinking that means that they will be forced into the pool with everyone else.  So what’s the problem?

The issue seems to be that too many relatively healthy groups might go outside of the private insurers’ shakedown game and therefore reduce their profits.  If it became a movement for the healthy groups to go rouge on the insurance companies, then costs might rise and profits decrease for insurers because their groups are a little less healthy, according to this theory.

I’m not sure that this is actuarially the case or simply some Cassandra screaming.   Many companies and employers don’t want to manage their own programs and pay the premiums to make this someone else’s problem, which the insurance companies are glad to handle.  Self-insurance and stop-loss programs are not for the faint of heart, I’ll assure you.

We could have solved this with a single-payer system rather than one dominated and managed by the private insurance companies.  Now this article claims the insurers may press for restrictions on self-insurance in order to continue to line their pockets.

Come on, man!


Shore up Social Security: Remove Payroll Tax $113,000 Cap!

New Orleans    Eventually reading all of this point, counterpoint baloney about the fiscal cliff, debt ceilings, bankrupt social security system, and national debt just makes your head hurt.  It’s at that point that you start stumbling around and miss the simple things, like this:  “Why in blue blazes is there a payroll tax cap on wages at $113,000 now?”

It was hard to miss the fact that regular working stiffs and pretty well paid swells up to the 6-figure level were all going to return to paying 2% of their share of Social Security payments.   The math is easy on this.  A $25,000 per year worker will cough up another $500, a $50K worker over the median wages in the USA, will pony up a another cool grand, and a solid executive in most businesses or longshoreman or autoworker with overtime making $100,000, will once again pay another $2000 in order to have real Social Security benefits when they are older.  I had to warn most of the folks that work with me about the share they should expect would once again be missing from their checks in 2013.

There are some things that are not so easy to explain.

The first is this cap on payroll taxes at $113,000 making these social security contributions even more regressive.  By regressive I mean that salary earners making over $113,000 will pay a smaller and smaller percentage of their annual wage in contributions, as will their employers, compared to what they make.  Once again simple math says that if your share of the Social Security contributions is 6.2% of $113,000, you will pay $7006 per year as your share of this government retirement benefit.  If you make $400,000 then you will still only pay $7006, so what was 6.2% of your income is only 1.75% at that level.  Like I said, regressive, making this another windfall for the richer!

The second is that despite all of this whining and carrying on about Social Security running out of money, if the cap did not exist, then conservative estimates (I’m talking Fox News numbers for cryeye!) say that it would raise $1.3 trillion or more over the next 10 years.  That’s $130+ billion a year sports fans, which ought to silence some of the Social Security Cassandras out there.

The third is wonder why Social Security, which is paid for exclusively by employee and employer contributions is conflated by the Republicans and way too many Democrats as if it were a federally financed entitlement, which and somehow connected to the national debt, none of which is true in the least.  This isn’t an apples and oranges confusion, this is the outright equivalent of a political P.T. Barnum stunt of trying to fool a certain gross percentage of the public a disgusting amount of the time.

And, given that is exactly what is going on, fourthly, what gives them the nerve to think that they get to raise the age for workers to access the benefits after their lifetimes – and their employers – making contributions towards their retirement, just because they want to grease their own palms with more campaign contributions from their higher earning 6-figure friends?

Let’s left payroll tax cap, make the system more progressive, and see how much of a problem, if any, we have with Social Security then, and onto to some real problems next.