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You Can't Fix What You Don't Measure: How ALICE Can Help Rebuild the Middle Class
Abstract
Seventy percent of Americans identify as middle class, but one in three middle‐income households do not earn enough to support their family at the most basic level, and four in five do not earn enough to afford a sustainable budget. This incongruity explains the increasing frustration of many workers. Yet official government measures do not capture this reality, and as a result, policy makers continue to create economic policies that perpetuate the structural mismatch between wages and costs. This Viewpoint essay addresses these shortcomings. After reviewing alternatives to the federal poverty level, it argues that the most realistic and accurate floor to the middle class is the ALICE (Asset Limited, Income Constrained, Employed) Household Survival Budget. The essay then turns to policies that help realign wages and cost of living and presents initiatives that are being implemented in states across the country. Four policy areas would enable more workers to support their families and fulfill the promise of being middle class in America: meaningful work with stable and sufficient wages, upskilling and digital retooling, fiscal cushion for periods of financial instability, and affordable credit.
This article will review family social work’s concern with budget counseling, an aspect of financial capability, during the century following World War I, based on articles appearing in the major family social work journal, Families in Society; publications of its sponsoring organization; standard budgets published with the participation of family social work agencies in many cities; handbooks and textbooks intended for social workers; and other sources.
Poverty in the United States, one of the world’s most wealthy and prosperous nations, is persistently high. Despite a complex array of social insurance programs in place, 43.1 million people remain in poverty. Because unemployment is a strong predictor of poverty, we propose a permanent federal job guarantee for all Americans. The program would provide full-time employment for any American over eighteen, offering at
least nonpoverty wages plus benefits. Such a program will constitute a direct route to producing full employment by eradicating involuntary unemployment. It also will substantially increase worker bargaining power by removing the employer threat of unemployment. To make the case that the federal job guarantee is viable, this paper includes responses to five common criticisms lodged against programs of this type.
Researchers suggest that inequity and disparities in public participation in the policy-making process will go hand in hand unless public managers and community leaders are attentive to these concerns when they are designing participation opportunities. Previous research has considered how the design of participatory opportunities can address inequity, but it has provided few insights into what is behind design choices. This article provides a theoretical framework that links public managers' and community leaders' perspectives on their own political efficacy and sources of their efficacy, yielding four types of “designers.” The research hypothesizes that these types have different narratives of social equity in participation that affect their design choices. Data from more than 100 public managers and community leaders provide preliminary support for these relationships. Findings suggest that inequitable public participation will persist unless designers consider what is behind their choices, focusing first on understanding the problem setting, or their narrative of equity in public participation.
This article presents a quantitative analysis of the geographic distribution of spending through the 1964 Economic Opportunity Act (EOA). Using newly assembled state- and county-level data, the results show that the Johnson administration directed funding in ways consistent with the War on Poverty's rhetoric of fighting poverty and racial discrimination: poorer areas and those with a greater share of nonwhite residents received systematically more funding. In contrast to New Deal spending, political variables explain very little of the variation in EOA funding. The smaller role of politics may help explain the strong backlash against the War on Poverty's programs.
The labor market increasingly rewards social skills. Between 1980 and 2012, jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the U.S. labor force. Math-intensive but less social jobs-including many STEM occupations-shrank by 3.3 percentage points over the same period. Employment and wage growth were particularly strong for jobs requiring high levels of both math skill and social skills. To understand these patterns, I develop a model of team production where workers "trade tasks" to exploit their comparative advantage. In the model, social skills reduce coordination costs, allowing workers to specialize and work together more efficiently. The model generates predictions about sorting and the relative returns to skill across occupations, which I investigate using data from the NLSY79 and the NLSY97. Using a comparable set of skill measures and covariates across survey waves, I find that the labor market return to social skills was much greater in the 2000s than in the mid-1980s and 1990s. © The Author(s) 2017. Published by Oxford University Press, on behalf of President and Fellows of Harvard College. All rights reserved.
We use data from the US Financial Diaries study to relate episodic poverty to intrayear income volatility and to the availability of government transfers. The US Financial Diaries data track a continuous year’s worth of month-to-month income for 235 low-and moderate-income households, each with at least one employed member, in four regions in the United States. The data provide an unusually granular view of household financial transactions, allowing the documentation of episodic poverty and the attribution of a large share of it to fluctuations in earnings within jobs. For households with annual income greater than 150 percent of the poverty line, smoothing within-job income variability reduces the incidence of episodic poverty by roughly half. We decompose how month-to-month income volatility responds to the receipt of eight types of public or private transfers. The transfers assist households mainly by raising the mean of income rather than by dampening intrayear income variability.
The use of comparisons to explain, analyze and understand social and economic phenomena is recognized as a valuable social science tool. This textbook deals with the differences in management and organization between nations and their effects on multinational enterprises.
In comparing management practice across the world, the authors cover themes such as national cultures, diversity and globalization. Students are guided through the key business disciplines, providing a broad introduction to the field and including truly global coverage.
With student and instructor friendly resources such as chapter summaries, mini-case scenarios, larger case studies and power-point slides, this book is core reading for students of international business and international management.
Local food system governance increasingly occurs in collaborative venues at the local, state, and regional levels. Prominent examples of such are food policy councils (FPCs). FPCs take a systemic approach to improve local food systems by including diverse stakeholders to advise on policy development. The authors study public FPCs to understand how policies structure the stakeholder composition and goals of FPCs and how FPCs’ stakeholder composition facilitates and/or impedes performance. Data come from a content analysis of policies that mandate the structure and functions of public FPCs and interviews with FPC representatives. Findings indicate that FPCs connected to a broader array of food policy actors in their communities produce more diverse policy outputs, but this outcome is tempered by whether council members represent personal or organizational interests.Practitioner PointsCollaborative governance can be an effective strategy when public problems are reframed to account for new information or failures of traditional governance approaches.Collaborative policy-making efforts in food system governance should include participants who serve as liaisons to a broader array of community stakeholders.Diverse governance structures are more productive when members have latitude to leverage individual expertise in policy making rather than simply serving the interests of organizations they represent.Local communities interested in addressing a wide range of food-related policy issues should consider creating food policy councils or similar collaborative policy-making efforts.
We examine how susceptible jobs are to computerisation. To assess this, we begin by implementing a novel methodology to estimate the probability of computerisation for 702 detailed occupations, using a Gaussian process classifier. Based on these estimates, we examine expected impacts of future computerisation on US labour market outcomes, with the primary objective of analysing the number of jobs at risk and the relationship between an occupations probability of computerisation, wages and educational attainment.
This study documents an increase in the prevalence of extreme poverty among US households with children between 1996 and 2011 and assesses the response of major federal means-tested transfer programs. Extreme poverty is defined using a World Bank metric of global poverty: $2 or less, per person, per day. Using the 1996–2008 panels of the Survey of Income and Program Participation (SIPP), we estimate that in mid-2011, 1.65 million households with 3.55 million children were living in extreme poverty in a given month, based on cash income, constituting 4.3 percent of all nonelderly households with children. The prevalence of extreme poverty has risen sharply since 1996, particularly among those most affected by the 1996 welfare reform. Adding SNAP benefits to household income reduces the number of extremely poor households with children by 48.0 percent in mid-2011. Adding SNAP, refundable tax credits, and housing subsidies reduces it by 62.8 percent.
American democracy is at a pivotal moment: electoral dysfunction, low levels of participation, divisive politics, and power imbalances dominate governance and impede our ability to resolve critical issues facing the nation. In this environment, the author argues, our ability to be the representative system of government we claim is in question. Using Harold D. Lasswell’s 1942 essay “The Developing Science of Democracy” as a vehicle for reflection, the author reviews progress and challenges in democratic practice today along four dimensions: information delivery and knowledge building; accurate capturing of citizens’ views; conducting democratic conversations; and maintaining balances of power. Among the reforms necessary to address persistent challenges in each of these areas, explored in depth is the institutionalization of citizen voice in governance. Seven elements of an infrastructure to achieve such an institutionalization are reviewed: a mandatory legislative framework; designated physical spaces; specific technological, human, and organizational capacity; a trustworthy media; and a recommitment to civic education.
Because the official U.S. poverty level is too low to adequately assess need for assistance among low income households, assistance agencies set eligibility levels to multiples of the poverty level, such as 125 or 150 percent. The Self Sufficiency Standard provides an alternative measurement that accounts for many characteristics of modern society and geographical differences in cost of living. We use both measures to examine eligibility levels for customers seeking payment arrangements for their utility bill arrearage. Sensitivity analyses reveal that the two methods are in the greatest agreement when the poverty level is adjusted to 185 percent. We conclude that the Standard is a more accurate assessment of poverty and the need for assistance, but is unlikely to be politically feasible. Given this, we see it as a useful tool for determining the appropriate multiple of the official poverty level to use in setting eligibility levels for assistance programs.
We examine the mobility of individuals in the United States based on equivalent family income--that is, total income of all family members adjusted for family size according to the equivalence scale implicit in the U.S. poverty line. Our analysis, which tracks movements across quintiles, centers on four questions: How much movement is there across the family income distribution? How has this mobility changed over time? To what extent are the movements attributable to factors related to changes in family composition versus events in the labor markets? In light of major socioeconomic changes occurring in the quarter-century under study, have the determinants of mobility changed over time? Our findings indicate that mobility rates in the 1980s differed little from those in the 1970s. However, individuals in families headed by a young person or a person without a college education were less likely to experience upward mobility in the 1980s than in the 1970s.
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