For many decades, economists have sounded nearly unanimous in their condemnation of the minimum wage. The consensus view among economists was that minimum-wage rules resulted in lower employment, and that the most uneducated and unskilled workers were those most likely to lose their jobs due to a mandatory minimum wage.
Well, the research is in, and the majority of economists were wrong! Surprise! Minimum-wage laws actually don’t reduce employment. In fact, they increase the welfare of minimum-wage workers and their employers.
Who says so? None other than The Economist, the house organ of the economics profession, the gold standard of consensus among economists. In a recent “Free Exchange” column, The Economist dishes the numbers on minimum-wage laws and begrudgingly concludes, “Whatever their flaws, minimum wage laws are here to stay.”
Why? Because “whatever their flaws,” they work. The Economist cites a slew of data about the effectiveness of minimum-wage laws that has become available recently — data which refutes the long-held belief that minimum-wage laws increase unemployment.
Much of this data comes from Great Britain, which introduced a national minimum-wage law in 1999. The British government requires a minimum wage equal to about 46% of median earnings — compared with a less generous 40% in the United States. When Great Britain instituted the national minimum wage “worries about potential damage to employment were widespread,” says The Economist, itself a major worrier. “Yet today the consensus is that Britain’s minimum wage has done little or no harm.”
In case you’re having trouble with the British accent, “little or no harm” means the law did quite a bit of good — by every measurable standard:
Not only has it pushed up pay for the bottom 5% of workers, but it also seems to have boosted earnings further up the income scale — and thus reduced wage inequality. Wage gaps in the bottom half of Britain’s pay scale have shrunk sharply since the late 1990s. A new study by a trio of British labour-market economists (including one at the Low Pay Commission) attributes much of that contraction to the minimum wage. Wage inequality fell more for women (a higher proportion of whom are on the minimum wage) than for men and the effect was most pronounced in low-wage parts of Britain.
Again, let me translate from the British: The minimum-wage law boosted wages at the very bottom of the earnings scale — and all the way up the scale! As Richard R. Troxell, head of the campaign for a Universal Living Wage has eloquently argued, greater income at the bottom leads to greater spending at the bottom, boosting the entire economy. It also leads to lower government spending, lower taxes, and lower budget deficits, as those at the bottom rely less on government subsidies.
How is that possible — for increasing wages to increase profits? The Economist thinks much more work needs to be done to understand the relationship between employment and the minimum wage. The magazine goes part way by explaining that increased wages at the bottom lead to less turnover which saves more money for businesses than the wage increase costs them.
This lesson was not lost on Henry Ford. He paid workers more and thereby reduced the costs of building a car while increasing his profits. All of this is laid out in Richard R. Troxell’s book, Looking Up at the Bottom Line: The Struggle for the Living Wage. While it’s gratifying to see The Economist finally reverse its kneejerk objections to a guaranteed living wage, they have a long way to go to make up for the delays caused by their previous incorrect statements about the mythical damage caused by a minimum wage.
News comes from Oregon that Erik de Buhr has designed a “Conestoga hut” that would provide shelter for people who don’t have any. That is, of course, if the city of Eugene decides to allot any piece of ground to contain them. The city council has been studying this issue for months, and apparently has not even progressed as far as checking to see how Conestoga huts fit in with the state’s building code.
Governments everywhere invoke the magic word “safety” when refusing to allow new housing solutions. They hold onto a quaint belief that it is more salubrious for people to sleep under bushes than in tents, shacks, shipping containers, or whatever. Any architecture student knows there are a hundred ways to create cheap shelters, using recycled materials and engineered to include at least some level of civilized existence. Inventing mini-shelters is not the problem. The problem is no place for them to be.
It seems a bit strange that effort is being put into building a better hut, at a time when there are empty buildings all over the landscape. Some groups are trying to make squatting acceptable, but that movement is losing traction even in Great Britain where it has long been an entrenched way of life.
Yes, it’s all very complicated, and the first question that occurs is, if anybody were to live in a foreclosed house, why not the people who were trying to buy it in the first place instead of some other homeless people? It’s all very complicated, but the bottom line is, thousands of people are homeless and thousands of buildings are empty. If America is as smart as it thinks it is, it needs to figure out a way to fix that.
In Austin, TX, the last elections included a $78 million housing bond which was defeated by a close 49-51% vote, despite the efforts of a very competent team. However, Prop. 17 passed, which will expand the available space in temporary shelters for women and children. Richard R. Troxell of House the Homeless says:
We had realized that this was a responsible group of free thinkers who were likely to vote once informed, and vote they did.
The difference might lie in the way the women’s shelter issue was framed. In the public mind, it was associated with an actual person, Valerie Godoy, who was murdered while sleeping out in the open. The idea of permanent affordable housing might need the same kind of public relations. Maybe at this very moment there is an activist in Austin wondering what to do next. Maybe this is the project — to find a way of personalizing the need for housing, by concentrating on individuals. Humanize the story, one human at a time, for as long as it takes. For examples, see Invisible People, Underheard in New York, and numerous others.
Permanent housing — wouldn’t it create jobs? Couldn’t it even create a few jobs for people experiencing homelessness? Sure, there are a lot of homeless people who have some kind of paid work, but still can’t afford to live anyplace. And others are just plain unemployed. There is a reputable university in Austin. Couldn’t it think up a spectacularly innovative way to bring back a housing initiative that would do something good for the homeless, the housed, the business owners, the tourists — in short, everybody? And earn more renown for itself of course, for creating a win-win-win-win-win situation.
For many reasons, Austin has a unique opportunity to show every other American city how it ought to be done. In many ways, Austin has already charted the course. For example, Richard mentions this year’s Foundation Communities’ Annual Fund Raiser, which put a human face on the organization’s work, and not just one but many faces:
They showed videos of beautiful and affordable housing that Walter Moreau and his wonderful team have already brought to Austin. They brought out men, women and children whom they had helped. The individuals told their stories and told how getting their home had changed their lives.
Moreau’s accomplishments are further detailed on the Foundation Communities page, headed by its motto, “Creating housing where families succeed in Austin and North Texas.” When the organization won an award for Best Affordable Housing Intervention last year, this is the reason given by the “Best of Austin Critics”:
Foundation Communities creates housing for low-income folks through a holistic philosophy that includes literacy training, financial coaching, afterschool care, and counseling. This whole supportive web of services helps families stabilize, survive, and kiss the bad times goodbye.
Source: “Huts for homeless,” The Register-Guard, 12/08/12
Image of Conestoga Hut by The Register-Guard.
Starting today Austin residents and others are encouraged to donate winter clothing items and participate in House the Homeless’ Thermal Underwear Drive. The Thermal Underwear Drive is an annual event which has successfully raised money and clothing for people suffering from homelessness.
Today House the Homeless Founder Richard R. Troxell — and sidekick “Homie” — spoke with Austin’s Fox 7.
Earlier this year, a Daily Kos columnist pointed out that, however many American service members died in the Vietnam war, twice that many Vietnam veterans are currently experiencing homelessness in the United States, for which they fought and are owed plenty. We have heard of “the gift that keeps on giving.” Vietnam was “the war that keeps on taking.” For these men and women, Southeast Asia is not ancient history. In fact, there are even veterans still around from before Vietnam.
Additionally, numerous veterans of more recent and ongoing conflicts are on the streets. They have all earned “sweat equity” in our country, or perhaps it should be called “blood equity.” Here is the quotation:
67,495 veterans are homeless on any given night and twice as many experience homelessness during a year.
The page consulted here gives a whole list of statistics, and these are two of the most pertinent ones.
23% of the homeless population are veterans
76% experience alcohol, drug, or mental health problems.
There are two different facets to look at. One is the accuracy of the various numbers. Popular Mechanics magazine published a very technical yet highly understandable article about why the numbers are problematic. Joe Pappalardo explains how current figures can lose their apparent meaning, because it is impossible to know whether the methodology obscures some deeper truth. He mentions an announcement that was made by HUD secretary Shaun Donovan, stating that veteran homelessness had decreased by nearly 12% in a year.
The journalist says of Donovan:
But what he didn’t mention is that between 2010 and 2011, HUD changed the way it counts homeless veterans, and those changes could throw uncertainty on the veracity of the numbers. Last year, HUD stopped using statistical estimates and instead mandated that homeless organizations that receive federal money survey homeless people to determine if they are veterans. They also used figures supplied by local Veteran Administration (VA) programs instead of estimates.
In time, of course, a change of technique becomes the new routine, and numbers are more reliable. But they are never entirely reliable. They are always, at best, estimates. Because so much of bureaucratic procedure depends on numbers, both the government agencies and the public would prefer accurate ones, but we make do with what we can get.
More important is the human story behind the numbers, and sometimes fiction can illustrate such things better than hard facts. In Michael Connelly’s novel The Black Echo, one character is a retired colonel who runs a group home for veterans released from jail. He says:
You know, these boys were destroyed in many ways when they got back. I know, it’s an old story and everybody’s heard it, everybody’s seen the movies. But these guys have had to live it. Thousands came back here and literally marched off to the prisons… I wondered what if there hadn’t been any war and these boys never went anywhere… Would they still have ended up in prison? Would they be homeless, wandering mental cases? Drug addicts? For most of them, I doubt that. It was the war that did it to them, that sent them the wrong way.
Los Angeles is the site of one of the most bitter and long-fought battles on the home front. Since 1888, America’s vets have owned 400 acres of prime real estate smack-dab in the middle of LA. The land contains the Veterans Administration hospital and outpatient clinics, and a whole pack of unrelated business tenants. The administration and the VA need to put that land to the use of the veterans, and build long-term supportive housing on it. All the bureaucrats are blaming each other for the lack of progress, and the American Civil Liberties Union has filed suit.
To renovate one (1) building to house the homeless, $20 million was allotted months ago. No construction contract has even been drawn up, but somehow a completely renovated building is promised by August of 2014. Gee, that’s only another year and a half — and it will only have 65 beds! Meanwhile, an estimated 8,000 veterans are on the streets of LA every night. Advocates are asking for at the very least, help in establishing a tent city on some of the land. But the prospects don’t look good.
A Housing Placement Boot Camp was, coincidentally, held in Los Angeles, to teach agencies how to shorten the time it takes (many months) to place a homeless veteran into housing. One suggestion is that nonprofit organizations obtain the inspection standards required by the local public housing authority, so they can get a jump on checking out prospective rental quarters. Also, it would help a lot if the minimum income requirements could be eliminated.
Several other recommendations, if followed, can speed up the process. One is that the individual’s military discharge form be considered as adequate identification, without requiring a birth certificate or social security card. The big one, which House the Homeless has discussed before, is that the “housing first” principle be followed. Since federal law doesn’t require a veteran to enter or complete substance abuse treatment before receiving a housing voucher, local VA branches should not require that. With a home base to work from, a recovering addict or alcoholic has a much greater chance of success. If the true goal is to help people clean up their act, “housing first” is the obvious course.
Source: “Helping Our Homeless Veterans,” Daily Kos, 10/26/12
Source: “How Does Washington D.C. Count America’s Homeless Vets?,” Popular Mechanics, 01/19/12
Source: “Homeless Veterans: Whose Responsibility?,” The New York Times, 10/08/12
Source: “Top 9 Things You Can Do Right Now from 100K Homes,” usich.gov
Image by sneakerdog.