Minimum Wages, EITC, and Prison Recidivism

Frankfurt      Professor Fred Brooks of Georgia State University shared with me a dense academic paper by Amanda Agan and Michael Makowsky, economics professors at the universities of Rutgers and Clemson respectively.  The title of the paper was “Minimum Wage, EITC, and Criminal Recidivism,” which is not normally the kind of thing that comes into your email inbox and is greeted with an “Oh, boy!”  Upon closer reading though, maybe that’s the wrong way to think about finding such a paper, because the professors did some heavy data lifting to allow them to postulate interestingly on the impact of raising the minimum wage, especially, whether it would reduce the incidence of former prisoners finding themselves back behind bars because of the what they term the “unemployment effect” and the calculation of the costs and benefits of working lower waged jobs versus the likely income from illegal activity.

They looked at six-million records of prisoner release in more than a dozen states in a relatively short period up to 2014.  They compared the release data with records of return and the impact of minimum wage increases in the same areas up to a maximum hourly wage at the time of $9.50 per hour.  What they seem to have found is that the recidivism rate was a little under 3% less for every fifty-cent increase in the minimum wage in a locality for both men and women former prisoners.  They found a significant decrease for women when there was an increase in Earned Income Tax Credits, though they could not find the same for men.  All of that is very, very interesting.  They hesitate to speculate on the policy impacts, but of course that’s not a problem for me.

When they look at the different impacts of EITC for women they speculate that it has to do with the fact that many are single women heading households with children.  They seem not to factor in the additional childcare credit that EITC provides households with children that might provide significantly more appreciable benefits to women in such situations that single men ex-prisoners trying to navigate the highly discriminatory job market for ex-cons.

They don’t decry the impact of frozen minimum wages federally and in many of these states, but of course I can, since the marginal impact of a fifty-cent increase might yield much lower rates of recidivism in states where we won one-dollar an hour increases or, as they point out in the future, any areas where a significant improvement up to $15 an hour is achieved.  They also don’t condemn the short-sightedness of conservative, Republican legislatures attempting to refuse to allow cities to increase minimum wages within their boundaries in Alabama, Florida, Louisiana, Texas and elsewhere even though proportionately the incident of prison population is more minority and more urban and the releases are also coming into cities.  Allowed to have higher minimum wages, as many areas have approved at the ballot box, could drastically reduce crime rates as well as lower the percentages of those returning to jail.

The mind boggles at the potential policy impacts that this study hints might be possible with fair wages and equitable wage distribution.  Is anyone listening out there?


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.