The Progressive Ensign

insights and analytics to build an economy that works for all

Household Debt Continues to Mount – Students Staggered by Debt

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Photo: commondreams.org

U.S. household debt is up as families are caught between soaring debt and stagnant wages.  We have noted how wages have been wiped out by inflation in the latest Bureau of Labor Statistics report comparing July of 2017 to July of 2018. The Federal Reserve of New York and Equifax have tallied the last figures on household debt in the charts below.

Sources: Federal Reserve of New York, Equifax, The Wall Street Journal, The Daily Shot – 8/15/18

Student Loan debt continued to increase while credit card, auto and other debt held steady.  The reduction of financial support by state and federal government to higher education is appalling.  Before the Great Recession public funding for higher education was at 50 % still a drastically less then funding in the 1970s.  Now, public funding for higher education is at 35 % leaving universities with no choice but to raise tuition.

Source: kypolicy.org

Public college tuition and fees costs (in 2015 dollars) have almost tripled since 1975, so students needed to borrow money to complete their education.

The student loan predicament is a national disgrace.  It exemplifies how poorly we as a society have supported the higher education.  Our young people are looking to start families and looking to purchase homes yet, they are not moving ahead.  The birth rate is at the lowest level it has ever been in this nations’ history and the number of millennials purchasing homes is a the lowest level it has been since before the Great Recession. Without the younger generation purchasing homes the second stage economy supported by new household formation fades.  The markets for appliances, furniture, home repair and remodeling, carpeting and many other household product sales will fall.

Next Steps:

We said in our blog of May 29th the student debt problem is so great that it is hurting the formation of new households:

In 2003, 42 % of people under age 35 owned a home now only 35 % own a home.  The dream of owning a home is slipping away as our society allows the rich continue to enjoy huge tax reductions in the most recent tax bill, with continuous lack of state funding for colleges and universities and then a paucity of forgiveness programs for graduates.”

Sources: Federal Reserve Bank of New York, US Census Bureau, New York Times – 5/29/18

Further we outlined some recognition of the student debt problem but much more needs to be done.

“As part of the spending bill that Congress passed last month, $350 million was allocated for a fix it forgiveness program for some types of student loans.  Senator Elizabeth Warren has been surveying the issue and individuals trying to take advantage of the provisions where she found that it was quite complex, answers were in complete from the Department of Education and work still needed to be done to setup the process. She found many firefighters and teachers having a difficult time getting into the program.  Prior to passage of the spending bill Senators Whitehouse and Kaine wrote a bill to setup a student debt forgiveness program and get it funded, their bill set the stage for Democrats to push for provisions of the bill to be included in the omnibus spending bill.

This solution is still not enough compared to the huge issue of $1.49 trillion outstanding placing an anchor of debt on our young people when they need to be investing in starting their families and careers and buying homes. In blog of February 16th in our archives, we review an idea to cancel all student debt.  We like the idea moving forward, yet recommend that forgiveness be done in stages, by reducing interest rates, offering Heartland Service, providing a universal national service option and corporate sponsorship of an internship by the student.”

It is unacceptable that our Congress and Executive branch are focused on how to give more money to Corporate Nation States and The Elite, they should be representing us and focusing on how to solve the student loan crisis and create opportunities for our young people and our country.

Wage Increases Evaporate Due To Inflation Again

 

Image: industryweek.com

As we have noted in past posts, worker wage increases have been stagnant for decades and most recently for the 80 % working class since the last recession while 90 % of income increases have gone to the top 10 %.

The Department of Labor announced last week that inflation has completely wiped away any worker wage increases from July 2017 to July 2018.

Sources: Bureau of Labor Statistics, The Wall Street Journal – 8/10/18

Inflation went up during the 12 month period by 2.9 % while wages were up only 2.7 %.  Since the Great Recession workers have not left out of the economic recovery.  In 2000, the share of corporate sector income  going to workers was 82 % now it has slipped to 77 %.  The benefits of the Tax Cut, which were supposed to raise worker wages has mostly gone to stock buy backs raising the compensation for executives by juicing the price of their stock holdings. Goldman Sachs estimates that nearly $1 trillion will be spent this year on stock buy backs, and many analysts believe that stock buy backs are holding the U.S. stock markets up in the midst of a worldwide decline in share prices. Stock buybacks mean that necessary capital expenditures in productivity programs, innovation and new plant and equipment are forgone.  Economists note that investments in key long term projects are crucial to increasing productivity which has been at an all-time low of 1.7 % over the past ten years. Increased productivity will support raising wages without increasing costs.

Next steps:

Let’s start with the fundamental reason employees do not receive raises beyond inflation – management has no incentive to raise wages.  Wages are accounted for as a cost in the books of the company, executives receive major bonuses to increase profits not costs.

The next major factor is automation. Automation of jobs, and work process activities increases profits reduces salaries, benefits and is easier to manage than staff. Automation has continued to give management the upper hand in any wage negotiation.  Most job losses over the past ten years have been due to automation. As robots and computer software become more sophisticated with artificial intelligence even more jobs will be lost. For example, while Amazon announces hiring 100,000 workers over the next ten years, at the same time they are installing 40,000 robots to permanently perform many of the those jobs.

Other factors play a major role, corporate mergers reducing the number of companies in major industries, there are 50 %  fewer public companies on the stock exchanges than ten years ago.  The gig economy employs almost 33 % of all workers, contracting is cheaper and companies can contain costs with flat fixed based contracts with no benefits.  Executive pay is 300 % of the average worker pay, so there is less money to go around for raises.  Workers have lost union representation over the past 50 years when 33 % of all workers were in unions in 2015 only 10 % were represented.  Finally, job market automation, the Internet has provided employers with a vastly larger pool of candidates which they can play off each other.  Sites like LinkedIn were designed for corporate recruiters to look at candidates – not with the needs of candidates in mind.  We examine all these factors in more depth in our blog: Wages Are Stuck, Here’s Why and What to Do About It.  Here is a summary of our recommendations:

The Action:

  1. Place Workers on Boards– as Germany has so effectively setup, engaging management with required representation of workers on Boards.
  2. End Outsourcing– corporations would pay 50 % tax on each job moved overseas making the move costly, encouraging corporations to move jobs to low cost or inland areas of the US, or innovation economic zones (special tax geographies) and to invest in worker training to receive training tax credits.
  3. End Low Cost H1-B Visas– the practice of importing inexpensive labor to drive down wages in US markets would be ended.
  4. Offer Lower Taxes on Repatriated Funds– only if the profits from overseas are invested in productivity actions, increasing wages of workers (not executives), reducing costs or innovation. Stock buybacks or dividends would be prohibited.
  5. End Stock buybacks– these funds are totally wasted, mislead investors on earnings reports and only serve to increase compensation for executives and shareholders. These funds are better allocated to increase worker wages or increase productivity so workers can receive higher wage increases.
  6. Breakup Oligopolies– breakup market concentrations in key sectors: information technology, banks and financial services, health insurers, airlines, hospitals and clinics, entertainment, media and distribution and others as deemed in the public interest.
  7. Balance Job Market Process– require companies over 100 employees to offer information on their website for contacts, phone numbers, job listings with identified contacts, and to let the candidate know the status of his consideration, and candidate introductions held monthly for F2F communication.
  8. Balance Worker and Executive Pay– tax corporations 25 % surcharge on any corporate income where any executive makes greater than 150 % than any the average worker wage – this would force executives to share their income with workers while not increasing costs. End federal tax deductions on corporate income taxes for executive stock compensation above $1 million. End golden parachute packages by taxing 50 % of every dollar received above $1 million. Severance packages for workers would have to be in proportion to the highest executive package ie, executive receives 10x of monthly salary a worker would receive 10x of his/her monthly salary.
  9. Fund Worker Training and Increase Wages – for each robot employed, the corporation would be required to offer training, skills development for the displaced worker to find a comparable job within the company or outside. Where automation software or technology is deployed 10 % of the realized cost benefit would be used to raise the wages of all workers in the company.

Turkey Tariffs Hurt EM and U.S. Economies

Image: gsiexchange.com

Last Friday, President Trump’s tweet doubling tariffs on aluminum and steel from Turkey caused a major shock to the Turkey stock market and sent the lira spiraling down by 10 %.  However, the damage was not contained to just Turkey, emerging country currencies around the world took hits, the U.S. SPX took a .71 % dive.  Emerging countries with similar high debt levels like South Africa and Argentina took 2 % or more hits to their currency values.  The correlation of the lira with other emerging market currencies hit a new high today, according to Bloomberg.

Sources: The Daily Shot, The Wall Street Journal – 8/13/18

Sources: The Daily Shot, The Wall Street Journal – 8/13/18

Our President chose to lob an economic bomb at a country already reeling from a 40 % drop in the lira year to date, high inflation at 15.85 %, ten year bond rate of 20 %, and a corporate $210 billion net currency account deficit owed to foreign investors.

Investors are concerned that EU banks holding loans or positions in Turkish banks could be vulnerable to losses. The European Central Bank is concerned with exposure of banks in Spain, Italy and France.

Sources: The Daily Shot, The Wall Street Journal – 8/13/18

U.S. banks do not hold many direct positions in Turkish banks or loans, but they do hold positions in EU banks in the three exposed countries.

The crisis was in the making, when President Erdogan took office in July after 15 years of rule declaring super powers to himself sending the lira into a flash crash.  Over the past month Erdogan insisted on keeping interest rates low, allowing inflation to get out of hand, and used foreign investment to build shopping malls and construction projects rather than invest in industry, productivity or critical infrastructure.  Today, the lira was falling quickly during the day, until its fall was steadied by Turkish central bank interventions, yet stock markets in U.S. were down with SPX losing .40 %, the Dow off by .50 %, and emerging markets down by 1.62 %.  All this financial uncertainty about loans, bank exposure, and foreign capital reserves has caused investors to hit the pause button to wait and see how officials around the world respond to the crisis.  The most critical question: can this financial crisis be contained to Turkey, Argentina and South Africa or will developed country markets be hit?

Next Steps:

We see economic bomb throwing via tariffs to gain supposed political advantage to secure the release of a pastor as a major mistake.  The added tariff on top of present tariffs on Turkey already in financial straits just exposed other emerging markets to investor and official scrutiny causing alarm and uncertainty.  Uncertainty is the big cloud growing stronger as world markets deviate from U.S. markets in the past several months.

Sources: The Daily Shot, The Wall Street Journal – 8/13/18

This divergence won’t continue, either the U.S. market will fall or the emerging markets will rise – with global economies slowing, currency weakness and tariffs it would seem that U.S. markets are likely to fall. Plus, the U.S. dollar strengthening versus emerging country currencies makes U.S. goods more expensive for global customers resulting in a reduction in U.S. sales.

Is this what the President wants; falling emerging markets eventually leading to the U.S. economy going into a recession? One crucial aspect of financial markets is that perception can become reality, just the perception that a country can’t pay its debts, or a bank may fall is enough to cause investors to run for the exitsThe President by making an impulsive tweet into a fragile financial system will only lead to more uncertainty, falling markets and economic disaster.  Economically damaging a NATO partner like Turkey only plays into the hands of Russia in establishing closer economic and strategic ties. America has a military partnership with Turkey at the Incirlik Air Base, where over 5,000 U.S. airmen are stationed used for monitoring Russian military exercises and staging for operations into Syria and Iraq.  Undermining the economy of our NATO partner may create enough civil unrest to force us to leave the base. We need to recognize that our military presence around the world keeps countries safe for us and all companies to conduct business, otherwise markets shrink.  The The White House needs to think in terms of what their tariff and protectionist policies are doing to the economies of countries our companies want to sell products to.  If offshore prospective customers are in falling economies they won’t have the money to buy U.S. products. So, how will the trade deficit be reduced? These poorly thought out short term trade policies need to be ended and sound long term, trade programs focused on building economies need to be implemented.  This Administration needs to follow the trade path of the past 50 years by both Democratic and Republican administrations.

Update: August 14, 2018 – President Erdogan declared the country is in an ‘economic war’ telling citizens to boycott American electronic products, sell dollars and euros to support the lira.  This tit for tat retaliation is exactly what we don’t want to see trade relationships spiral into uncontrollably.  What if China uses nationalism to drive boycotts of U.S. goods?  The deadline for the U.S. imposing new tariffs is August 23rd we will watch the action with great concern. Economic nationalism will cause worldwide recessions and setup conditions for civil unrest. Just in, Bloomberg reports that Turkey has slapped tariffs on U.S. goods including a 50 percent tax on rice, 140 percent tax on spirits, and 120 percent on cars. Tensions continue to escalate out of control.

Corporations Have A Responsibility for The Common Good

 

Image: Your Little Planet

Corporations provide the economic foundation for the common good in supporting a community.  Air, water,  and land need to be kept in good stewardship by companies using these natural resources and returning them as they found them.  Yet, there is an economic responsibility too – good jobs for fair pay while keeping the social contract with the worker.

The New York Times returned to the Carrier site in Indianapolis that 20 months ago President Trump ‘saved’ from being moved to Mexico. Today, the furnace plant is plagued by absenteeism and concerns that the plant will be shut down when the political light is gone.  Management has not helped when the CEO of the Pratt and Whitney that owns Carrier said that there would be lost jobs and automation would help to reduce costs. Unfortunately, the Carrier situation is true for many blue collar workers in America, always looking over their back, with a cloud hanging over their job future.  There isn’t a cloud hanging over executives careers.

How can workers make commitments, to their families, pay mortgages, make car payments are send children to college when there is economic uncertainty hanging over them.

It used to be that corporate management was concerned with the future of their workers in a deep and personal way, which was reflected in their policies.  All too pervasive in executives suites throughout America is the focus on profits, stock price and how to make more money – with worker security and careers taking a second place or not at all in the financial plan.  Certainly corporations have extreme competitive pressures worldwide, government regulations and personnel laws to adhere to.  Yet, when companies announce automation plans, they seem to forget the people losing jobs to robots are unlikely to get another job that pays as well.

Automation is a social concern, damaging the common good that workers can’t be just flung out of work while all the executives left make more money.  There is something intrinsically unfair with this model.

People are the most important resource in our economy, we need to be thinking of how we treat people when economic storms come.  When companies automate workers out of job they need to take the social responsibility for ensuring the worker thrown out of work and still progress positively in their economic life. While, a capitalist democracy supports corporations as private property and run entity, with the onslaught of automation corporations can’t just run the other way after giving the laid off worker a small severance check and say ‘good luck’  That approach is just not enough, the corporation profits the worker losesWe need to end the spiral down for workers, they need to be guaranteed a productive economic life just the same way an executive who is left with the benefits of an automated factory.

Washington AG Increases Job Mobility for Fast Food Workers

 

Photo: blogs.reuters.com

Washington Attorney General, Bob Ferguson negotiated with seven major fast food franchises including; McDonalds, Arby’s, Carl’s Jr., and Jimmy Johns to delete franchise agreements with parent companies which include a no poach clause.   The no poach clause provided a way for individual franchisee’s to keep managers from other same brand franchisees from hiring their workers.  Two Princeton professors, Krueger and Ashenfelter published a study last year that estimated that no poach clauses affected about 70,000 individual restaurants in the U.S. or about 25 % of all fast food outlets.  The professors noted that the clauses were primarily to keep turnover down, limit competition and job mobility with other same brand franchises.  As a result workers had limited options to negotiate higher wages, work schedules or conditions.

Turnover in the fast food industry ranges from 60 – 70% in up-scale dining restaurants to over 120 % in fast food franchises. Franchisees are faced with constant pressure to raise wages in a low wage industry but face tight profit margins of 3 %:

Source: The Heritage Foundation – 9/4/14

With only 3 % margin to work with it is difficult for a franchise owner to raise wages.  Workers also mention in surveys the need to have more scheduled hours with more notice on the hours they work. With the no poach clauses gone from contracts workers can move to a same brand restaurant and negotiate for better hours and schedules.

We are pleased to see Attorney General Ferguson successfully negotiate with major fast food chains to delete the no poach clause to give workers more negotiating power and flexibility in their job situations.  It seems to us that major chains should have figured out that at least keeping the worker in the same chain was a plus, and the deleting the clause may force owners to treat workers better in order to reduce turnover.  Better managed franchises would rise to the top and have lower turnover rates.  Now on to raising low wages, increasing wages to a livable level is a complex issue that will require all involved; the owners, corporate franchise executives and workers to come up with a plan that will give workers the wages they deserve.

IRS Takes Care of Wealthy in Pass-Through Tax Policy

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Photo: calwatchdog.com

The IRS was tasked after passage of the Tax Bill last winter with defining which businesses and owners would qualify for a special 20 % deduction on pass through income.  Interpretations of the pass through 20 % deductions where announced yesterday.  As maybe expected the law favors the rich, and even gives the Trump Organization new benefits which the president can take advantage of as he still holds title to his businesses and properties while in office.

Half of all U.S. businesses use pass-through income structures with 70 % of the income flowing through to the top 1 % in wealth.

Sources: Joint Committee on Taxation, Center on Budget and Policy Priorities – 5/10/18

The tax bill provision for pass through deductions builds on a tax law that is already biased toward the wealthy who own businesses structured to maximize tax benefits. The Center on Budget and Policy Priorities (CBPC) notes due to a byzantine design opportunities for gaming are rampant, “ it could wind up being even more expensive and delivering larger tax cuts to high-income filers than current estimates show because it creates a significant gaming opportunity:  high-income individuals may now be able to secure very large tax savings by converting their labor income into pass-through income to take advantage of the new deduction.”

The CBPC estimates that over $50 billion will be lost in tax revenue each year for the nine years the law is in effect for a total of $450 billion of the $1.5 trillion deficit from the bill. When the law was written arbitrary winners and losers were chosen for example excluding architects and engineers.  New York University law professor David Kamin observed in recent congressional testimony, “This pass-through deduction represents the very worst kind of tax policy, picking winners and losers haphazardly in a complex tax provision, and then generating significant incentives for people to rearrange their businesses to try to get on the right side of the line.”

Next Steps

We have consistently noted that the Tax Bill of 2017 favoring the rich with 80 % of the tax benefits will torch taxpayers to the tune of $1.5 trillion deficit to be financed by bonds. This abusive blatant giveaway to the rich is a disaster both in terms of income equality and economics.  Our generation and many generations to come will be paying off bond interest instead of investing funds in education, infrastructure projects, job training, Heartland initiatives, medical care and apprenticeship programs.  The bill needs to be repealed, applying taxes to corporations and the wealthy to invest in programs that benefit the 80 % not the top 1 % in income.

US Steel and Nucor Use Tariffs To Monopolize Markets

 

Image: vice.com

Two major steel companies, US Steel and Nucor, last March lobbied the Trump Administration to post tariffs on imported steel at 25 %. They are now pressuring the Administration to deny any requests for waivers from the tariffs.  Over 1,600 applications have been filed for exclusion from the tariff provisions which blanketed the world including the European Union, Mexico, Canada, Japan and China.  The two steel giants are in fact creating a monopoly for their steel products in the U.S.

In order to protect about 33,000 steel worker jobs, several million jobs in steel using industries are jeopardized by the tariffs:

Sources: U.S. Bureau of Labor Statistics, Bloomberg – 3/2/18

Nucor paid for a film by presidential advisor Peter Navarro, when he was a professor at UC Irvine on the threat of China imported steel being dumped onto U.S. markets.  Certainly, there are issues related to China trade practices but is using 25 % tariffs on all imported steel even from allies going to force China to change their export practices?

Next Steps:

Companies that use steel in their products are reeling from soaring price increases in steel and sourcing issues because U.S. steel producers do not make the products they need.  Elite corporate CEOs are running their companies via the U.S. government to pick winners (themselves) and losers over 1,600 companies being denied exemptions to run their businesses successfully and keep jobs here in the U.S. Now, many firms are planning on moving operations to countries closer to their customers to avoid the tariffs all together – thus moving jobs out of the U.S. It seems already the tariff plan has backfired, moving jobs out of the U.S. and jeopardizing millions of jobs.  We should not be tolerating this state of oligarchy, where two major companies setup tariffs to their exclusive benefit in while damaging thousands of other companies businesses and threatening millions of U.S. jobs.  It is the job of our federal government to not pick winners and losers but to establish fair markets for innovation and entrepreneurship to triumph. The tariffs need to be lifted and an intelligent trade strategy in collaboriation with our allies to end China steel dumping practices be implemented.

Seniors Feeling Financial Crunch – Increased Bankruptcies and Pension Overpayment Collections

Image: debt.org

Researchers tracking the financial blight of seniors report that seniors over age 65 are 3 times more likely to file for bankruptcy. Seniors are caught by reduced pensions, co pays on their children’s student loans, spiraling medical costs and lost wealth from the Great Recession.

Sources: Consumer Bankruptcy Project, The New York Times – 8/3/18

The post – Baby Boomer generation is feeling squeezed too as their bankruptcy filings are up over 66 % for the 55 to 64 year old group. Many Baby Boomers just beginning their retirement or in the their last years of savings were hit hard by the Great Recession, wiping out 401k investments in stocks and losing home equity wealth too. In all households lost $14 trillion in wealth, most of the income and asset recovery of the past 10 years has gone to the top 10 % in income.

The Consumer Bankruptcy Project is an ongoing effort led by Professor Thorne, University of Idaho; Professor Lawless; Pamela Foohey, a law professor at Indiana University; and Katherine Porter, a law professor at the University of California, Irvine. Their universities fund the project as they review court documents and send out questionnaires to retirees.

Social Security has not been able to fill the gap.  Nor was Social Security designed to be the sole source of income for seniors – it was setup to supplement pensions and savings.  Over the past 30 years corporations have shifted from defined benefit (pension direct payment) plans to defined contribution plans like 401k where the worker makes the majority for the contributions and the employer is off the hook to make direct fixed payments. Yet, today for 33 % of retirees receiving Social Security it provides 90 % of their income.  Medicare and drug costs cut into their Social Security checks:

Sources: The Kaiser Family Foundation, The New York Times – 8/3/18

Health care spending for the average retiree is increasing every year beyond Social Security income and drugs become more expensive, some with standard prices of $70 per dose gauged up in price to $1700 per dose.

Adding insult to injury firms like  AT & T are contracting with collection agencies to claw back overpayments to pensioners.  The firms make up the calculation tables and send out the checks now they blame the pensioner, who has already spent the money.  It is important if the retiree receives a statement of planned disbursements to send back incorrect checks, however in most cases the checks were sent over some years until the error was found and the retiree had no idea that there was an overpayment.

Next Steps:

The perfect financial storm for retirees comes down to the basic fact that corporations shifted their responsibility for pensions onto workers helping the financial services industry sell more financial products to an naïve and financial challenged workers.  Professional financial managers were replaced by amateur workers doing their best to invest their 401k plans and save for the future.  For the bottom 80 % income the last 30 years their wages have been stagnant with increasing educational costs for their children and increasing medical costs for themselves. The federal government has been of little help, not indexing Social Security payments to the actual costs seniors incur for increasing medical and health services costs.

  1. Pension Claw backs – this makes no moral sense, many retirees have spent 20 or 30 years of their lives for the business, the business made the mistake they need to take care of it. In AT & T’s case they spend billions on stock buy backs to make their executives and shareholders rich, they could take a fraction those funds and take care of their seniors and fund their pension liabilities appropriately.
  2. Retirement Income – in previous posts we have recommended that instead of an incredible mess of 401k accounts, financial houses and amateur investment management by workers, a guaranteed retirement program be implemented starting at the time a person begins work and receives his Social Security card. Worker savings toward retirement would be transferred into this one account for a lifetime, with Social Security contributions by the federal government, and savings by the worker.  A portion would be guaranteed by the federal government and professionally managed as a defined benefit plan. Workers could opt for professional management of all their funds as well.
  3. Medical Costs – as we have recommended health insurance should be run by one entity the present Medicare operation for all Americans from the time of birth. Medicare already has a formulary for drugs, and should be authorized to negotiate drug costs for all patients. Standard compensation for procedures and quality of care implemented for Obamacare should be extended. Drug companies will no longer be able to buy back their stock, but instead will be required to spend those funds to bring drug costs down, or reduce costs in other ways.  Direct prescription drug advertising should be outlawed to save the over $1 billion spent a year in wasted advertising and spend the funds on price reductions.

Weaving Together a New Social Fabric for the Common Good

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: meritsolutions.com.au

One of the major problems we face in our society is isolation quite often brought on by inequality and poverty.  It is hard to be ‘in the social mainstream’ when you are out of the economic mainstream.

As we have noted we need common experiences, social connections and collaboration toward shared goals to overcome isolation.  Often for a person not moving up the economic ladder there is a lack of feeling connected to the community or a network that can assist them during a rough patch in life.

Education is a key to moving up the economic ladder. For young students in poor neighborhoods, without school resources, overworked teachers and rundown school facilities getting a good education is especially challenging. An group that is meeting the challenge of isolation head on is Thread, a social fabric weaving organization in Baltimore.  Thread connects students with up to five volunteers who do things that a family member might do. The volunteers are coached by an experienced volunteer called the Head of the Family.  The Head of the Family is coached by a Grandparent, and Grandparents are supported by Community Managers.  Community Managers are paid Thread staffers. Offering complimentary help are Collaborators who provide special assistance when needed for example in: legal help, SAT tutoring, mental health counseling etc. Thread replicates the family connections and support networks, while providing key links to volunteers who can help with connections to colleges and universities or other resources.

Thread works with 415 high school students, more than 850 volunteers and over 300 collaborators.  The results are impressive:

  • 87 % of students who have been in the program for 6 years have graduated from high school
  • 84 % of students in the program for 5 years have been accepted to college
  • 83 % of student alumni have completed a 4 or 2 year college degree or certificate program

The Thread example is one for policy makers to review, and examine in detail for the elements of what makes a social fabric weaving organization work.

Education is the Fifth Estate, an essentially building block of our democracy providing opportunities for all to move up in life.  Programs like Thread, provide insight into how to create the underlying support village for those that are isolated or have limited family support to change their life and shift into a productive path leading toward self-respect and self-esteem.  Our society benefits from adding productive citizens to our economy, while building safer and more democratic communities.  Certainly, forming organizations to rebuild the lives or our isolated young people in both cities and rural areas is critical to strenthening the Common Good.

EDF Announces Satellite To Monitor Climate Change

 

Image: EDF

One of the major problems facing environmental government and non-government groups is monitoring emissions from locations all over the planet.  Many locations maybe quite remote while others are easily identifiable using land based monitoring systems.  So, having a satellite to monitor emissions world wide is a way to accurately monitor emissions.

Methane emissions are a major component of climate change gases.Here are EPA projections for all climate change gases:

Chart: EPA – 2016

Environment Defense Fund President, Fred Krugg recently announced in a TedTalk, in Vancover, British Columbia that EDF was developing a fourth wave environmental monitoring system. The first wave was the conservation movement led by President Teddy Roosevelt, second came the anti-pollution laws of the 1960s and 1970s. Third, was the use of market based solutions and corporate partnerships in the 1990s.

The MethaneSAT is a Fourth Wave environmental monitoring system, using satellite technology to identify methane sources planet wide.  Readings would be sent to government and non-government groups to identify sources, work out solutions and weigh alternative measures. Methane is a potent gas responsible for 25 % of all global warming. Targeting methane gas emissions is the fastest, cheapest way to attack global warming while other programs continue to focus on carbon dioxide emissions as well, according to EDF.

The launch target for MethaneSAT is 2021, with a focus on specific monitoring areas including 80 % of all oil and gas fields across the planet. Feedlots, agriculture and other methane sources will be monitored as well. EDF has set a high goal of 45 % reduction in oil and gas methane emissions by 2025.  Achievement of this goal would deliver the same 20 year climate benefit as closing one third of all coal fired power plants worldwide.

We are pleased to see EDF take a proactive approach to monitoring methane worldwide, we hope that the U.S. and other countries will work hard to support this effort. The U.S. should not be waiting for an NGO to take the lead, the EPA needs to take the lead and focus on how to gather accurate data to effectively manage climate change initiatives as well as water.

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