Archive for the ‘USA’ Category

A back door attack on oil payment transparency

May 9th, 2013 | by

A few weeks ago, a few House Republicans introduced H.R. 1613, the innocuous sounding “Outer Continental Shelf Transboundary Hydrocarbons Agreement Act”. A little over four pages long, H.R. 1613 is primarily designed to provide Congressional approval to a US-Mexico Transboundary Hydrocarbons Agreement (TBA) signed by both governments over a year ago.

Oxfam has no problem with the approval of the US-Mexico TBA which simply lays out the rules for how hydrocarbons reserves in the Gulf of Mexico that straddle our maritime borders would be developed.

We do have a big problem with an irrelevant provision inserted into the bill designed to weaken the payment disclosure requirements in Section 1504 of the Dodd-Frank Act, also known as the Cardin-Lugar provision. That law provides for the annual disclosure of payments made by oil, gas and mining companies to host governments around the world – final rules were issued by the SEC in August last year. H.R. 1613 would exempt any covered company from reporting payments from in accordance with any transboundary hydrocarbons agreement anywhere in the world.

The American Petroleum Institute (API) – backed by companies such as Exxon, Shell, Chevron and BP – is suing the SEC in federal court and is now hoping that its Congressional allies can help weaken this landmark law. Oxfam is intervening to defend the rule. Meanwhile, the European Union has reached agreement to put in place similar reporting requirements.

I spoke this week with Neil Brown who was, until very recently, a top Senate Republican aide working on energy issues for Senator Lugar, who was the ranking member of the Senate Foreign Relations Committee. His response: “this exemption is unnecessary and inclusion would only forestall quick approval of this important agreement.”

He should know. As both the co-author of a Senate Foreign Relations Committee minority staff report for Senator Lugar on “Oil, Mexico and the Transboundary Agreement” as well as someone intimately familiar with the “Cardin-Lugar” provision in  Dodd-Frank, Mr. Brown would know if the reporting requirements in Dodd-Frank Section 1504 present any issue in approving the US-Mexico TBA. The short answer – they don’t. The minority staff report envisions reporting under Section 1504 and says that under Section 1504 covered companies “would already have to disclose payments” to the SEC if “they invest in Mexico”.

The US-Mexico TBA requires that certain information be kept confidential unless disclosure is required by law. The TBA text demonstrates that the US and Mexico have already made the correct policy judgment that the specific confidentiality provisions of the TBA should be subordinated to each country’s commitment to openness and subject to each country’s disclosure requirements. Nothing in the TBA would require the exemption provided by H.R. 1613.

Tellingly, the Senate Energy Committee has introduced a bi-partisan bill, S. 812, sponsored by Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) to approve the US-Mexico TBA, and it contains no Section 1504 exemption provision. If Congress is truly interested in approving this agreement and providing the “rules of the road” for joint development of oil and gas reserves straddling the US-Mexico maritime boundary, then it should adopt the clean Senate bill without the reporting exemption.

Former Senator Jeff Bingaman, past Senate Energy Committee chairman, told Reuters that the exemption proposed by the House “complicates things significantly” for passage of the bill. Referring to the Section 1504 exemption language, he said, “They’ve added in some things that are going to make it difficult to pass in that form.”

The Mexican Congress ratified the TBA a year ago, and the Obama administration – and the oil industry – would like to see it approved. The Obama administration, though, has made clear that implementation of Section 1504 is a priority.

In a letter to Oxfam, Sec. of State Kerry said, “The Department of State and Administration strongly support transparency in the extractives sectors, as outlined in Section 1504 of Dodd-Frank, and the new rule issued by the SEC. The new SEC standard directly advances our foreign policy interest in increasing transparency and reducing corruption, particularly in the oil, gas and mineral sectors.”

My guess is that the oil industry lobby wants this TBA approved far more than it wants this unnecessary Section 1504 exemption. Surya Gunasekara, a tax and trade counsel with the American Petroleum Institute told me that there is “no doubt” that API cares more about Gulf of Mexico access than the proposed Section 1504 exemption.

Why are two generals talking about poverty?

April 25th, 2013 | by

Andrew L. Yarrow is a senior research advisor at Oxfam America who studies inequality and low-wage work in the US.

Americans are struggling. The middle class is disappearing. Younger generations may not do as well as their parents.

None of this is news. Yet, behind the widespread recognition that our economy remains sour well into the “recovery” is the troubling reality that 1 in 3 Americans—more than 100 million people—struggle to make ends meet, living in poverty or “near poverty,” based on income thresholds set by the Census Bureau.

While there is much talk about the dangers of our nearly $17 trillion federal debt, there is little public discussion of the even greater economic crisis that consigns 50 million people to poverty and tens of millions more to low-wage jobs that barely lift them out of poverty. That is why Oxfam America has launched Voices on US Poverty, an initiative intended to stimulate discussion about US poverty. Essays from more than two dozen writers, which are being published in news media throughout the country, consider the specific challenges facing poor families and children, immigrants, minorities, and the working poor, as well as the broader nature of economic injustice. They bring such perspectives as economics, theology, journalism and social activism, and offer ideas on how to truly fix our economy in ways that benefit all Americans.

Gen-Roger-Blunt

Maj. Gen. Roger R. Blunt

Gen-Paul-Monroe

Maj. Gen. Paul D. Monroe Jr.

 

“There are clearly moral and economic problems when millions of Americans are desperate for work and unable to meet their families’ basic needs,” Maj. Gen. Roger R. Blunt and Maj. Gen. Paul D. Monroe Jr., two military leaders participating in Oxfam’s initiative, write.

“A free-market system that does not provide opportunities for all of us to succeed undermines one of our most convincing arguments against totalitarian regimes and state-run economies that often oppose our interests abroad,” they say.

 

What does it mean to be poor? Wealth and poverty are relative terms that vary greatly over time and by country. The World Bank defines poverty as “pronounced deprivation in well-being.” This can mean that people are unable to meet basic human needs (housing, food, clothing, health care), but in the US it can also mean that they struggle to stay afloat with jobs that pay just a few dollars above the US$7.25-per-hour minimum wage, with no benefits or job security. These are not the desperately poor in developing countries who live on less than $2 a day, but they are American men and women and families who can barely afford a cheap apartment and groceries, who patronize pawn shops and payday lenders, who can’t afford to get sick, and who are likely to have more debt than savings. Government benefits and charity help them—somewhat, but not enough to enable them to lead decent lives.

The numbers are chilling:

  • One in six Americans lives below the federal poverty line, with incomes less than $11,722 a year for an individual and $23,497 for a family of four.
  • The number of people in poverty is the highest in the 53 years that statistics have been collected, and the poverty rate has risen every year since 2006.
  • Another one-sixth of Americans lives in near poverty, with incomes between the poverty level and twice the poverty level.
  • About 6.6 percent of Americans, or 20.4 million people, live in severe poverty, with incomes less than half of the poverty threshold, or about $5,800 for an individual and $11,700 for a family of four.
  • Forty-four percent of children live in poverty or near poverty.
  • More than half of African Americans and Hispanics have incomes below 200 percent of the poverty level.

The picture looks even worse using an alternative measure of poverty developed by the National Academy of Sciences and the Census Bureau. Under this new Supplemental Poverty Measure, which takes into account regional differences, health care, housing, payroll tax and other costs, as well as government benefits. (See comparison of the measures below.) The number of Americans with incomes below twice the poverty level shoots up to about 150 million, or half the entire population.

Poverty Rates Comparison

“Poverty is about power, not scarcity,” Ray Offenheiser, Oxfam America’s president writes. “As Americans, we believe that our nation must lead. Poverty and inequality, and the social exclusion they breed, are wrongs to be righted, whether they occur in sub-Saharan Africa, South Asia, or the United States.”

7 possibilities for addressing income inequality in the US

April 3rd, 2013 | by

Here are the facts:

Income inequality in the US continues to worsen. While earners at the very top claim greater shares of the country’s income distribution, shares among the rest are shrinking.

A recent analysis by Pulitzer Prize-winning journalist David Cay Johnston suggests incomes for the bottom 90% only grew by $59 between 1966 and 2011 (inflation adjusted). Over the same period, average incomes for the top 10% rose by $116,071. The top 1% saw their share grow by $628,817. And the top 1% of the 1%? They saw their share grow by $18,362,740.

Here’s a visual courtesy of Johnston: If a $59 boost is equivalent to an inch, then the incomes of the top 10% grew by 168 FEET! The top 1% grew by 884 feet, and the cream of the crop – the top 1% of the 1% – saw an increase of 4.9 miles (that’s 310,464 feet). I attempted to plot these distances on the graph below. However, it’s largely unreadable because the cream of the crop dwarfs even the 1% as a whole. (If you look close though, you can sort of see the other distributions.)

 

And this trend is becoming worse.

Despite the fifth year of post-financial crisis recovery, inequality is growing. The first two months of 2013 saw median incomes drop by 1.1%, to $51,404, moving it 5.6% below where it was in June 2009 (from $54,437 at the start of the recovery). Since 2000, Americans have seen the median income drop nearly 9%.

At the other side of the income spectrum, a different story has unfolded. Since 2009, while the bottom 90% saw their incomes shrink, the top 10% of earners took a whopping 149% of the post-recovery growth! How is that possible, you ask? Because the incomes of the bottom 90% shrank. The top 1% captured 81% of the gains, of which more than half went to the top 1/10 of the 1%, and 39% of the gains to the top 1% of the 1%.

“Ponder that last fact for a moment,” says Johnston. “The top 1 percent of the top 1 percent, those making at least $7.97 million in 2011, enjoyed 39 percent of all the income gains in America. In a nation of 158.4 million households, just 15,837 of them received 39 cents out of every dollar of increased income.”

We’ve got more questions than answers.

The dangers of growing income inequality are now widely recognized. Yet, there’s little dialogue regarding how to reverse the tide, especially in the US.

At issue is a fundamental question:

How do we recast the American economy so that it generates broad-based growth, as opposed to merely great growth at the very top, and flat (or even regressive) growth for everyone else?

Oxfam is still trying to identify the best policy solutions to help curb inequality in the US, and we’re interested what our allies, adversaries, and the blogosphere have to say about the following possibilities:

1)      Target the wealthy. Make corporations and rich people pay their fair share.

2)      Gain greater access to social services for the very poor.

3)      Strengthen organized labor.

4)      Raise the minimum wage.

5)      Improve education.

6)      Clean up America’s legislative and regulatory bodies, which are too corrupted by wealth.

7)      Focus on creating more incentives for an environment of inclusive growth.

I offer these to stimulate thinking, not as a be-all-end-all list. So what’s missing? Which of these or other policy responses may prove best to reverse the US’s growing inequality? We want to hear from you!

The Times’ Friday news dump

March 1st, 2013 | by

It is often said that politicians who want to bury a bad story, put out their news late on a Friday afternoon in order to avoid the media scrutiny. It’s called the Friday news dump. Today at 5pm, our country’s most venerable media institution, the New York Times, dumped its own awful news on the world, announcing they will be discontinuing their Green blog.

The decision is incredibly disheartening if not altogether unexpected. A little more than a month ago I called the paper’s move to shutter the environment pod “an unmitigated disaster,” predicting that the closure would undermine the paper’s focus on critical issues facing our planet. At the time editors expressed unwavering commitment to continuing their coverage of environmental issues. But it was hard to see then how that promise could be kept. Today’s news feels like a nail in the coffin of that particular pledge.

Some have argued the changes could ultimately be a good thing. But let me give a timely example of why I think that’s wrong. This week Oxfam released a major report into the social and environmental policies of food and beverage companies. Stephanie Strom from the Times covered it. But because of a hitch in the news cycle and the timing of her article, the only place her editors could find space for the story was on the Green blog.

Now that the blog is gone, what will happen with stories like this? Chances are that they will just go away. Theoretically they could live somewhere else. But if the blog is closing for a reason, why wouldn’t the stories that fed it be affected?

I know this all sounds like a very self-interested complaint, a flack hand-wringing about how I’m going to get coverage for my employer. But obviously this goes beyond stories about Oxfam’s research. The idea that the Times would take all of its reporters who are focused on environmental issues and reassign them to other beats, then close down the most significant space on their website for these topics, yet somehow manage to “continue to cover these areas of national and international life just as aggressively,” seems, well, laughable.

The editors should skip the spin and just admit that they have made a business decision to deprioritize these vital, if soon-to-be neglected, energy and environment issues.

As BP trial begins, communities and businesses call for restoration and opportunity

February 25th, 2013 | by

Today marks the beginning of arguably the biggest trial of this young century. The U.S. Department of Justice goes to court with global oil giant, BP. After spilling 4.9 million barrels of oil into the Gulf of Mexico in 2010, BP could be on the hook for a record-breaking $21 billion in fines.

Gulf Coast communities are watching closely thanks to the passage of the RESTORE Act, which Oxfam and allies worked hard to pass. Eighty percent of the fine money will head directly back to the five states along the coast. And they can use the help. Since the spill, the Gulf has suffered enormous environmental damage, such as decreased oyster harvests, oiled marshes, and dying fish habitats. The economy has also taken a hit, with a significant rise in the poverty rate, and rough times for those in the fishing and tourism industries.

People like Byron Enclade, a 3rd generation oyster fisherman from East Pointe A’La Hache, Louisiana, will be watching the BP trial proceedings closely. Enclade is the president of the Louisiana Oystermen Association and the South Plaquemines United Fisheries Cooperative. Photo: Audra Melton / Oxfam America

With the money most likely on the way then, and the needs so acute, the question is: how to invest it most effectively? Unfortunately, with so many interests at play, discussions have at times devolved, often to a stark debate between the economy and the environment.

Oxfam America and others have a simple response. We can address both environmental and economic interests at the same time. We recently joined with The Nature Conservancy and business allies as well as community leaders to raise our voices in support of just such an agenda.

On February 19, leaders from over 120 businesses and industry associations, operating in more than 800 locations along the Gulf and generating more than $20 billion in annual revenues, delivered a letter to the five Gulf Coast governors to say that a healthy ecosystem is a key to driving private sector job growth, future prosperity, and fostering economic mobility. They called for using RESTORE Act funds to make critical environmental investments in restoring wetlands, barrier islands and oyster reefs, together with funding for worker training, i.e. preparing dislocated, low income and disadvantaged workers for jobs in these projects.

“These restoration projects create a demand for work from a wide variety of companies in the engineering, construction, transportation and manufacturing sectors,” said Thomas Matthews, of the marine construction firm Matthews Brothers, Inc. in Pass Christian, Mississippi. “I have witnessed firsthand that investments in coastal restoration can mean jobs for coastal workers and economic growth for local businesses and communities.”

Auburn Wessman of Phylway Construction in Thibodaux, Louisiana wrote in an Houma Courier op-ed, “[M]any of us in the business community believe the best solution is clear: We can use Restore Act money to spur the economy while we restore the environment and protect our communities. And we can employ local workers while we do it — a win for everyone.”

In an op-ed published in Sunday’s New Orleans Times Picayune, Patrick Barnes, President of the consultancy firm, Barnes, Ferland & Associates, Inc., and founder of the New Orleans-based training organization Limitless Vistas, Inc., said, “Our restoration plans could benefit from including efforts to prepare local, low income and disadvantaged workers for these new restoration jobs…We have a chance to bring industry, communities, and training institutions together to identify the necessary skill sets and training programs to prepare our state’s workforce to conduct future restoration projects.”

Last week, officials from the US Department of Commerce and the Gulf Coast Ecosystem Restoration Council held public hearings along the Gulf on a comprehensive plan to use spill fines.  At one meeting, Rebecca Templeton, an Oxfam partner at Bayou Grace Community Services in Chauvin, Louisiana, reported that community groups agree with the business leaders that we need to invest in ecosystem restoration—at the same that we fund worker training and policies to help local people find work on these projects. “If we have the support of the business community, then hopefully the local people made most vulnerable by land loss will have a chance as well at the livelihood opportunities that will arise,” she said urging the Council to make ecosystem restoration job training a priority.

While the BP trial may result in many billions of dollars for the region, a recent settlement between the US Department of Justice and the owners of the rig that exploded, Transocean, will start to send $1 billion in fines to the region as early as April.

Hopefully this is just the beginning. All of us remain hopeful that we can tap into new opportunities to bring vulnerable communities, business leaders, and government together to tackle these economic and environment challenges effectively.

In the meantime, like everyone else, we’ll be watching to see what happens in court!

The sequester’s attack on the poor

February 25th, 2013 | by

Andrew L. Yarrow is a senior research advisor at Oxfam America who studies inequality and low-wage work in the US.

If Washington lawmakers are unable to step back from the brink of Friday’s scheduled budget “sequester,” low-income children and families will be among the many Americans hurt by this supremely foolish and cowardly exercise in policy making.

Photo: Getty Images/Rubberball

It all seemed so far away and unreal back in the summer of 2011, when President Obama and House Speaker John Boehner came up with the hare-brained idea of automatic cuts to defense and domestic discretionary spending at the beginning of 2013 if no longer-term budget deal could be reached. The January 1st “fiscal cliff” arrived, only for our bumbling budgeteers on New Year’s Eve to kick the can down the road another two months.

Well, here we are. The March 1 sequester is upon us, and $44 billion in cuts over the next six months will begin to take effect, with roughly half coming from the Pentagon and the rest coming from all manner of domestic programs. Mandatory programs such as Social Security, Medicare, and Medicaid, as well as Food Stamps, are exempt.

What does this mean? While Kentucky Republican Senator Rand Paul called the sequester a “yawn,” it will be anything but that to the 600,000 poor children and mothers who will lose WIC nutrition aid or the 70,000 children who will no longer be able to attend Head Start programs, according to the Coalition on Human Needs. Other initiatives that help the neediest Americans will also be slashed: 125,000 low-income families will lose rental vouchers; four million fewer Meals on Wheels will be served to the elderly; more than 370,000 adults and children will lose treatment for mental illness; and aid to the 23 million low-income Americans who get help with their heating bills will be reduced.

Of course, it’s not just the poor who will suffer, as the finger-pointers in both parties are quick to mention. The FBI and air-traffic controllers will see cuts. So will defense contractors. Federal employees may be furloughed. The long-term unemployed will lose benefits. And those who crunch the macroeconomic numbers say that the sequester’s ripple effects could throw as many as 700,000 Americans out of work.

These cuts come on top of a 7.6% reduction in federal funds to states since 2010. They also exclude even more draconian cuts proposed in the House Republican budget of $810 billion to Medicaid and $134 billion for Food Stamps over the next 10 years.

Few would disagree that the federal government needs to reduce its massive deficits. There are hundreds of billions of dollars in potential revenues that could be collected if we went after overseas tax havens and closed corporate tax loopholes. A 5.6% surtax on those earning more than $1 million a year could raise $450 billion over 10 years—as much as all of the domestic discretionary cuts slated under the sequester. Spending could also be cut—not only for defense but, most effectively, by reducing the astronomical healthcare costs that have driven Medicare, Medicaid, and other federal health programs to devour $800 billion a year. This is more than all domestic discretionary spending and more than even the Pentagon.

Pretending to achieve fiscal responsibility by cutting relatively small programs that benefit the poor and the middle class is dishonest and doesn’t work. And budget-cutting by sequester is not only a way for legislators to shirk responsibility, but an inhumane attack on poor and working Americans.

From Pennsylvania to Peru: “Promised Land” Movie Highlights Universal Extraction Challenges

February 5th, 2013 | by

Emily Greenspan is an extractive industries policy and advocacy advisor with Oxfam America.

Promised Land is now in theaters and I couldn’t wait to see it given my day job at Oxfam. Matt Damon and John Krasinski star. The movie depicts a small rural town in Pennsylvania as an international gas company comes in, promising to make millionaires of the struggling local farmers off of the shale deposits under their lands. Some eagerly jump to sign leases with the company while others worry about potential environmental impacts on their lands and waters.

The film really struck a chord with me because it highlights some of the seemingly insurmountable challenges that rural communities, in the US or elsewhere, face when deciding whether to make a deal with big oil. In Promised Land, the local high school teacher has a PhD from MIT, past experience as a Boeing engineer, and the time to do some internet sleuthing on the potential benefits and impacts of fracking. Many communities faced with the prospect of becoming oil boom towns, however, are not so lucky.

[youtube]http://www.youtube.com/watch?v=AHQt1NAkhIo[/youtube]Citizens in developing countries face even more daunting information asymmetry challenges when oil and mining companies come to town. Often governments sign oil deals with companies directly and choose to keep the terms of these agreements and the amount of revenues generated by projects secret from their citizens. Logistical challenges like high illiteracy levels and limited internet access compound the situation, making it very difficult for communities to engage in negotiations with project sponsors on an equal footing.

In Peru, for example, the multi-billion dollar Peru LNG pipeline project crosses through two of Peru’s poorest regions, Ayacucho and Huancavelica. Communities in these two regions faced serious challenges when engaging in consultation processes with the company, given that approximately one-third of women in the regions are illiterate and only around 10% of the population uses internet services.

Also, almost all governments in the world have legal regimes that provide for government ownership of oil, gas, and mineral deposits. This means that oil companies can bypass making deals with landowners and negotiate directly with government. Communities that oppose development projects on their lands risk being displaced. The beleaguered town in Promised Land faces a number of disadvantages as they attempt to negotiate with a multinational company willing to bribe and cajole its way to community approval. The town must contend with a local leader with dubious ethics and competes with the high school basketball team for meeting space. However, ultimately they at least have the right to decide whether or not to sign a lease with the company.

Weighing potential costs and benefits around high-risk extractive industry projects is a challenging endeavor for any community. However, a few key measures to promote transparency and community engagement can go a long way:

― Governments should disclose the oil and mining contracts that they sign with companies. This will increase government accountability to their citizens by creating positive incentives for good deals and closing off possible avenues of corruption. Over the long term, contract disclosure will also contribute to a more stable investment climate since better deals are less likely to be overturned by future governments.

― Governments should disclose the revenues they receive from oil and mining companies, and companies should disclose the revenues that they pay to governments. Landmark section 1504 (“Cardin-Lugar”) of the 2010 Dodd-Frank Wall Street Reform Act goes a long way towards promoting good governance of the extractive industries by requiring companies registered with the US Securities and Exchange Commission to disclose their payments to governments. Beyond this, the more companies and governments that adopt revenue disclosure policies the better, both for citizens and for responsible companies which would benefit from a level playing field.

― Finally, governments and companies should commit to obtaining the Free, Prior and Informed Consent of local communities before implementing oil and mining projects on their lands. Consultations with local communities should be inclusive and adequately informed, and if communities decide against a development project, their decision should be respected.

These measures will not solve all of the challenges associated with oil development for communities around the world, nor the ones portrayed by Hollywood. However, they will create a framework that helps to ensure that local communities affected by oil projects are more informed about these projects, and have control over decisions that govern their lands, their health, and their livelihoods.

Is inequality killing us?

January 23rd, 2013 | by

Andrew L. Yarrow is a senior research advisor at Oxfam America who studies inequality and low-wage work in the US.

What do high Gini coefficients and diabetes, regressive taxation and cardiovascular disease, and low minimum wages and respiratory ailments have to do with each other? More than most people—even physicians and economists—may think.

It’s not news that economic inequality in the United States has sharply increased during the last 30 years. It’s also not news that super-sized soft drinks, the easy availability of assault weapons, and the lack of health insurance for 49 million people are tragically cutting many American lives short.

What could be big news is that inequality in the United States may be a factor contributing to Americans’ poorer health, especially compared to Western Europeans, Japanese, Canadians, and Australians.  According to a massive new report by the National Research Council and the Institute of Medicine, “U.S. Health in International Perspective: Shorter Lives, Poorer Health,” the United States ranks dead last among 17 rich countries in life expectancy and at or near the bottom in nine key health indicators, ranging from infant mortality, obesity, and heart disease to homicides, chronic lung diseases, and sexually transmitted diseases (STDs).

Table courtesy the paper's authors.

These international health rankings look remarkably similar to inequality rankings by the Organization for Economic Cooperation and Development (OECD). Denmark, Norway, and Sweden hover near the top with the best health outcomes and the least social inequality; France, Germany, the Netherlands, and Canada are in the middle of both rankings. The US and Portugal are at the bottom.

Among the 17 countries studied, the United States now has the greatest disparity in wealth between the richest 1 percent of households, whose $16.4 million average net worth is 288 times that of the median household. The US also has the lowest male life expectancy and the lowest probability of its citizens surviving to age 50. Likewise, average incomes of the top 1 percent are more than 70 times higher than those of the poorest fifth of Americans—much greater than in Western Europe or Japan. And finally, the US has the dubious distinction of having the highest rates of infant mortality, STDs, and deaths from car crashes and gun violence.

Table courtesy the paper's authors.

Even fatal illnesses that our state-of-the-art medicine might be controlling, such as heart and lung diseases, are more likely to kill Americans than they are to kill citizens of all but one other country in the study. And the gaps have been widening, as America has been slipping farther behind other developed countries in health outcomes during the last 30 years.

Some might chalk this up to the fact that, prior to Obamacare, the US has had the highest proportion of people without health insurance. Others, pointing to the fact that the poor tend to be less healthy, would be right to note that the US has the highest poverty rate of the countries studied.

Yet, neither lack of health insurance nor poverty fully accounts for America’s miserable health ratings. Even well-to-do, white, college-educated Americans with health insurance fare less well than their counterparts in almost every other rich country.

While the report devotes only a paragraph to the role of high economic inequality, other researchers—notably Richard Wilkinson and Kate Pickett, authors of The Spirit Level: Why More Equal Societies Almost Always Do Better—argue that highly unequal income distribution harms all members of society. They posit that social stress, status anxiety, social competition, and lack of trust born of inequality lead to poorer health.

“Shorter lives and poorer health will ultimately harm the nation’s economy as health care costs rise and the workforce remains less healthy than that of other high-income countries,” concludes the authors of the National Research Council and the Institute of Medicine report.

Moral arguments against excessive inequality have recently been supplemented by macroeconomic evidence that inequality hinders economic growth and contributes to greater economic volatility. Now, we may add that inequality is medically harmful. This, in turn, brings the argument full circle.

Education as the great equalizer? Or class enforcer?

December 18th, 2012 | by

Policy-makers put a lot of faith in education as a pathway toward prosperity—for individuals, for families, and even for entire countries. And for many, education offers the possibility of economic mobility and, perhaps equality of opportunity.

For Oxfam building human capital through education is not just good for society and families, but should be considered as something closer to a human right.

'Numbers and letters' class (pre-primary) at N. V. Massaquoi School, West Point, Monrovia, Liberia. Aubrey Wade/Oxfam GB

This case is easier to make—and more salient—for primary and secondary education. For more advanced education, a careful analysis is worthwhile to make sure the value to individuals, families, and societies is worth it. In general, the presumed answer is yes. But, as the costs of getting a college education rise, the question increasingly gets asked and doubts creep in about whether it’s worth it.

I came across a report released earlier this year on “the economic case for higher education” in the USA produced by the US Departments of Treasury and the US Department of Education.  Those are formidable authors, so I thought it would be an impressive document. And it is.

The paper finds that college tuition has increased rapidly since 1991. This is offset a bit by increased financial aid (from various sources) and government tax breaks. But even taking these into account, college tuition has increased by 58 percent since 1991 for public schools and 25 percent for private schools. Public schools educate the large majority of students, so rising public school costs affect more people. Rising costs in public schools reflect the relentless budget cutting happening in the states, as well as increasing costs and administration of those schools.

Despite increasing cost, college education has a high return-on-investment. Incomes for people who have college education are 64 percent higher than for those who do not. And people with college education often receive other benefits, like pensions, health insurance, paid time off. And they are employed more, or rather, experience less unemployment.

In general, the wage premium for going to college has accelerated since the early 1980s. This might imply a shortage of college-educated people for the labor force, but it also reflects the stagnation of wages for non-college educated people.

For individuals and families, it’s clear that college is a good bet. Individuals that start life in a poor family (in the lowest income quartile), but who get a college education, reduce the chance that they will also be poor by more than half.

But the positive story of college education and prosperity begins to fray with this graph:

Here we see that college is still a distant dream for the overwhelming majority of poor Americans (bottom or first quartile on the left).  Less than one-third starts college, and less than one-tenth graduate. Compared to people in families with more money, poorer kids enroll at much lower rates, and once they enroll have a much harder time graduating. While the trend has been upward for poor people over three decades of college enrollment and graduation, the improvement has been for every income level, not just poor families (the orange v. blue bars). In fact, the improvements have been faster for higher income levels—with the rate of  improvement in college entry and graduation highest for kids in families in the third quartile.

Despite increasing cost, college education has a high return-on-investment. But it is still a distant dream for the majority of poor Americans. Photo: Nikki Eads/Oxfam America.

So richer kids have an easier time getting to college, more success sticking with it, and get higher incomes as a result. Things have been getting better for them over the years.

A college education is a great opportunity and is an engine for class mobility. It could be an engine for increased equality. But is an engine that is unavailable to kids from the lowest class really an engine of opportunity at all? If college delivers higher income to graduates, but is denied to poorer families, then does it actually help transmit increased inequality?

The Future of Agriculture needs a fertile conversation

December 18th, 2012 | by

A little over three months ago, I sat attentively listening to the give and take between Nigerian Female Food Hero, Susan Godwin, and Chicago Council on World Affairs Senior Fellow, Roger Thurow. Thurow was moderating a panel at the World Food Prize Symposium called A Billion Hungry: Can We Feed the World Sustainably? Also part of the discussion were Sir Gordon Conway, scholar and author; plant breeding and genetics pioneer, Gebisa Ejeta, and Jane Karuku, President of the Alliance for a Green Revolution in Africa.

Roger Thurow and Susan Godwin at the World Food Prize Dialogue. Photo: Jacob Silberman.

Now, an online dialogue, The Future of Agriculture, is considering much the same question about addressing hunger in the face of many challenges ahead. This discussion also includes my acquaintances, Susan Godwin and Roger Thurow. Mrs. Godwin writes eloquently on the challenge of passing the legacy of farming on to the next generation in  My Daughter Wants to Be a Farmer. Thurow again plays the role of summarizing and connecting the dots at the end of week one of the conversation.

In the first week, writers like Bill McKibben, writer and founder of 350.org, and Jose Graziano del Silva, Director General of the Food and Agriculture Organization of the United Nations (FAO), argued that moving away from an agriculture dependent on fossil fuels could not only benefit the planet but set the stage for a more resilient and productive agriculture.

Joining McKibben and del Silva were thought leaders with very diverse points of view and from different parts of the world. All considered what future farming might look like if we better considered the role of women, risk, farmer-based knowledge, and less reliance on fossil fuel.

The discussion continues through this week with a new set of essays posted each day. So far the discussion has been lively. But to help build our understanding we need broad participation and dialogue. So please take some minutes each day to visit http://blogs.oxfam.org/en/future-of-agriculture. The essays are short; the implications for our future tasks are great.

After reading both Roger Thurow’s and Susan Godwin’s online contributions, I thought back to that hall in Iowa with over 800 people attending. Mrs. Godwin told how her community and other had asked her what she might offer to all the highly educated and important people that she might address in the US. She said that most important she would tell them how her work had improved the lives of her family and the other women in her community. And after a pause, during which the audience grew even more quiet, she declared, “I will tell them that I am a farmer!”

That day, that large crowd filled with educators, scientists, political leaders, and activists rose to their feet. They acknowledged that the hope for a well-fed future depends on the efforts of all stakeholders, and ideas from all sectors.

The Future of Agriculture discussion is no different. Join the conversation today.

 

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