Carson Has the Wrong Prescription to Fight Poverty

HUD Secretary Ben Carson’s ongoing listening tour has provoked deep concerns from those working to expand opportunity in all neighborhoods and for that suffering housing insecurity. Secretary Carson’s comments during the tour have betrayed a misunderstanding of the role that subsidized housing can play in helping families escape poverty.

While the HUD Secretary has raised concerns about residents of affordable homes being “too comfortable,” the inverse is sadly too easy to observe: unstable, inadequate housing often traps generations of families into poverty. Matthew Desmond vividly put these connections on display in his Pulitzer Prize winning book Evicted, that found widespread evictions are a symptom and a cause of chronic housing instability, with cascading negative impacts on health, educational achievement, and  job stability.

Read the full commentary on CarsonWatch>>>

Court Protects Sanctuary Cities From Trump’s Threats


Sanctuary cities have won protection – for the time being – from President Trump’s threats to pull federal funding from jurisdictions that do not cooperate with his anti-immigrant agenda. In a major victory for sanctuary cities and the advocates who support them, a federal district court in California recently blocked the Trump administration from enforcing an executive order that attempts to pull current and future federal funds from local jurisdictions that adopt sanctuary policies.

Ruling in favor of the City of San Francisco and Santa Clara County, Judge William Orrick held that the President’s attempt to coerce local jurisdictions into assisting in enforcement of federal immigration policy is likely unconstitutional. The court issued a nationwide injunction prohibiting enforcement of the main terms of the executive order. This is a critical ruling for the growing sanctuary city movement, because it protects local jurisdictions from the administration’s threatened legal and fiscal consequences – and validates the strong legal arguments against the President’s executive order, as described below.

Though there is no formal definition of “sanctuary cities,” the name usually refers to local jurisdictions that prohibit their employees from assisting federal authorities with enforcement of immigration laws. This approach is an effort to protect the safety and well-being of residents – particularly those who are targets of increased surveillance and threat, such as immigrants, Muslims, and people of color.  Sanctuary policies have been spreading rapidly, as local leaders have sought to push back against the anti-immigrant and anti-Muslim rhetoric and discrimination that has characterized the new administration.

When President Trump signed executive order 13768 in January, it injected major uncertainty into local budget processes for cities that have adopted sanctuary policies or are considering doing so, and led to widespread confusion regarding the order’s scope and the impact. Because of the amount of federal funds at stake, many local jurisdictions naturally feared the consequences of any cutback in federal funds based on sanctuary policies.

However, the executive order threatened such cuts to a degree well beyond what the law permits. As explained in a letter from over 300 law professors, the Constitution sets out strict limitations that are violated by the broad language of the executive order:

  • the administration can’t add new conditions to existing federal grants;
  • Congress, not the administration, sets the terms of federal grants;
  • the administration cannot “commandeer” local officials to carry out federal policies; and
  • even when Congress wants to add conditions to future grants, the conditions must be closely related to the purposes of the grant.


Taken together, these legal principles greatly limit the threat to federal funding received by sanctuary cities, now and in the future. The court’s ruling validates these principles, and at least temporarily restrains the administration from using federal funding to coerce local jurisdictions.

Though this lower-court ruling could be overruled or modified on appeal, for now, sanctuary cities, counties, and other spaces have gained significant breathing room as they fight to protect their most vulnerable residents. Local officials considering sanctuary policies – and the advocates for our immigrant communities – should keep in mind that the administration’s threats to cut federal funding are largely empty, and are likely to continue to be reined in by the courts.

Visionary Opposition: Thomas Shapiro on the Growing Racial Wealth Gap and How to Reduce It

As the United States moves closer to becoming a majority people-of-color nation, wealth and income inequality and racial economic inequities are not only persisting, they are getting worse. What could these trends mean for our future economic prosperity, and what kind of innovative policy solutions would it take to turn the tide? PolicyLink President Michael McAfee recently spoke with Thomas Shapiro, author of Toxic Inequality: How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide, and Threatens Our Future, to discuss why the racial wealth gap continues to grow — and what we can do about it.

Can you describe the genesis of your new book, Toxic Inequality? Why did you write it, and how would you characterize the state of toxic inequality today?

In 1998–1999, I and a team of researchers conducted a series of interviews with about 200 families with children in the Boston, St. Louis, and Los Angeles areas to learn about how their different wealth resources affect their opportunities, decisions, and outcomes. We reconnected with many of them again in 2011–2012 to see how they were doing. About two-thirds of the way through that time we went through the Great Recession, and when we followed up with these families I felt that the United States had entered a different and dangerous time — and I wanted to work through why the situation was so different. Today we are dealing with a combination of racial inequities and wealth disparities that I call “toxic inequality,” which is characterized by several factors.

First, the United States is experiencing historically high levels of both wealth and income inequality, going back as far as the data will take us, which is to the 1920s. No matter how you measure it, inequality is at historic highs.

Second, this increasing level of inequality is made even worse by the fact that it is taking place in the context of stagnating or declining wages and economic mobility for many families, starting in the 1970s. As a society, we can more readily manage inequality if things are also generally getting better at the same time, but that isn’t the case today. Inequality is going up while living standards are going down for many people.

Third, we have a vastly widening racial wealth gap. A large, nationally representative study following the same set of families from 1984 to 2013 found that the racial wealth gap among them grew from $85,000 in 1984 (adjusted for inflation) to nearly $240,000 by 2009. The racial wealth gap basically tripled in less than 30 years. Something very profound, deeply structural, and bent by the arc of state and federal policy is responsible for that.

Fourth is the issue of changing demographics. By 2044, no racial group will be a statistical majority in the United States. Our institutions are not prepared for this change and have done a terrible job of getting ready for it.

Fifth, and the work of Joseph Stiglitz is critical here, corporate power and lobbying on the part of very wealthy individuals and corporations has expanded the rule of the marketplace. For instance, who writes into the regulations that federal agencies cannot negotiate over the cost of pharmaceuticals? It would seem that they should be able to, but the rules say they can’t — because of pharmaceutical companies’ corporate lobbying power and policy influence.

Finally, pandering to racial anxieties — and fears of immigrants and immigration — has become more pronounced in American society in recent years, even before the last election.

Let’s talk more about the consequences of this situation and how the connections between wealth and opportunity affect outcomes related to jobs, homeownership, and other wealth-building strategies. Can you describe the differences between earning income and building wealth? How has the changing character of work and jobs affected the development of the racial wealth gap?

We live in an uber-capitalist society where money buys merit. It is totally inconsistent to have a system where some people have very large inheritances and to say we offer equal opportunity — but we pretend that we have both.

In many ways, financial assets and wealth give some people the opportunity to purchase further opportunities, which isn’t an option for other people. People with wealth and assets can literally buy second, third, and fourth chances for their children. For others, if you make a mistake with your first chance or if you have a life crisis like a layoff, illness, or death in the family, you have no way to get back on track. As john powell has said, “wealth is excess security.”

Jobs are an important piece. In 1970, General Motors (GM) was the largest employer in the United States, employing about half a million people. Most workers there were represented by unions; wages were rising faster than inflation; and living standards were improving. In 2013, the largest employer in the United States was Walmart, with 1.3 million jobs — very few of which offer the wages, job security, and benefits that had been accessible to union workers at GM.

In the 1970s, the connection between work and wealth was much stronger, institutionally and in policy. But in this transition from GM to Walmart, the connection between work and wealth was broken. It exists for far fewer workers in the United States today, and where it does still exist it maps on to the legacy of occupational segregation. For example, 62 percent of White workers work for an employer who provides access to retirement savings, compared to 54 percent of African American workers and about 38 percent of Latino workers.

Take the example of two families we met in St. Louis: the Ackermans, a White family who lived in a predominantly White suburb, and the Medinas, a Black family who lived about 20 miles away. Even though both sets of parents had similar education and skillsets, the Ackerman family earned about $20,000 more per year — and that was just the beginning of the story. Because of the jobs and institutions they were able to access, the Ackermans gained not only more income but also significantly more employer-funded retirement savings, health-care coverage, and college tuition benefits for their children — in total, more than $30,000 a year in additional compensation on top of earnings.

So when we followed up with them in 2010, the Ackermans had accumulated about $350,000 in retirement savings and their son was enrolled at the University of Missouri with his tuition covered. The Medinas had about $12,000 in retirement savings and their daughter was not college bound. When their children were young, these parents’ aspirations and hopes for their kids were equal. But their outcomes were not.

As more people continue to move to access career opportunities, does this change the equation in terms of pursuing homeownership as a key to wealth building?

That’s a great question. For some people, moving represents advancement in a career path, so the question of whether to pursue homeownership is a consideration. But when we followed up with the families in our study after 12 years, I was shocked by how few of them had moved. I expected many of them to have relocated, but only three families had moved more than about 50 miles away from where they started. People do move around a lot, but it tends to be within a given region — and many of them are renters.

The issue of homeownership is a very local thing. But it’s important to remember that for people in the 20th to 80th percentile of income earners, two-thirds of wealth is in home equity. Homeownership is deeply entrenched in policy regulations and mediated by mortgage lenders and real estate brokers and other interests — so access to home equity as a source of wealth is not simply the result of personal responsibility or thrift. Homeownership produces lesser returns for people of color than for Whites, but if you move every five years, buying a condo or a house could still make sense, because you’d otherwise be spending that money on rent.

Clearly the racial wealth gap, in aggregate, is not going to be eliminated by homeownership. But at the individual level, it is still very important. Families aren’t thinking about closing the racial wealth gap. They’re thinking about their security and their family’s needs: stable communities, safe streets, good schools.

Given the situation you describe, what are the innovative ideas and policies that you think have the potential to make a real difference? How do we keep moving forward?

There is a misleading narrative that has grown around the notion of universal solutions — for example, free college tuition in New York state. What should be universal is the outcome, as in the goal of universal college education. That doesn’t mean the policy solutions need to be universal. The solutions should be targeted, based on the different needs that exist, to get everyone to that universal goal.

The good news is that there are success stories of African American families experiencing economic mobility. Aggregate wealth of African Americans is growing — just nowhere near the pace of White family wealth. Some existing strategies are helpful, like HUD’s Family Self Sufficiency program, which allows people living in subsidized housing to save in escrow accounts the money they would otherwise spend on rent increases. A family in our study who was living in subsidized housing used this program to buy their first home; it’s a proven solution but it isn’t operating anywhere close to scale.

There is an emerging strategy that people are calling “visionary opposition”: not shying away from resisting the harms that are being done, but focusing on continuing to build the agenda we have been working on. We need to keep pushing forward to rewrite the rules, regulations, and policies that produced and perpetuate this state of toxic inequality; and the only way that happens is by advocating and winning reforms that simultaneously build political power with new constituencies and loosen the structures that hold power together. That’s where we need to move ahead — however that is defined at the local level and however it plays out nationally as well.

New Data Profile Supports City of New Orleans Equity Strategy

April 20 marked an historic moment for New Orleans. After a year of community engagement and analysis, the City officially launched its Equity Strategy, laying out how local government will do its part to build a stronger, more inclusive city by advancing equity through its operations and decision-making. With this strategy launch, New Orleans joins the growing movement of city and county governments that are tackling structural racism and advancing equity through citywide initiatives. New Orleans is the first southern city to embrace such an approach.

“In the new New Orleans, having an equitable government is a top priority,” Landrieu said in launching the strategy. “We understand the power of equity and view it as a growth strategy that will lead us to creating a stronger and more prosperous city for all our residents.”

The Equity Strategy commits the city government to establish an equity office responsible for promoting equity in all its operations; make equity a central consideration in budgeting; create plans, with accountability measures, for all departments; conduct racial equity training for all employees and members of boards and commissions; and advance equity in hiring and workforce development.

At the event, PolicyLink and the Program for Environmental and Regional Equity at the University of Southern California (PERE) released an equity profile of New Orleans, the first of a series of 10 new equity profiles produced with the support of the W. K. Kellogg Foundation. According to this analysis, the New Orleans regional economy could be $18 billion stronger if racial gaps in income were closed. These profiles are developed to support local community groups, elected officials, planners, business leaders, funders, and others working to build stronger and more equitable cities, regions, and states.

PolicyLink has been working with the Office of Mayor Landrieu to provide assistance with developing its equity strategy for the past year through its All-In Cities initiative, and Senior Director Sarah Treuhaft participated on the panel at the launch event and then held a session to share the findings of the equity profile.

Long Island Is Missing More Than $24 Billion

Cross-posted from Next City

“Equity is the new growth strategy,” PolicyLink CEO Angela Glover Blackwell likes to say these days. A new report from her organization argues that the economy of New York’s Long Island would have been $24 billion stronger in 2014 alone if racial gaps in income were eliminated.

That’s $24 billion in foregone spending, investment and tax revenues in Long Island’s two counties, Nassau and Suffolk, due to longstanding inequality, coupled with policies ignoring history. That’s $24 billion left on the table in just one year, and it’s an annual loss that will only get larger every year, if nothing is done to address persistent racial inequalities.

Read the full story in Next City>>>

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