California, Poorest/Richest State in the Nation

California currently has more than 600,000 millionaires and 85 billionaires in the Forbes 400 list, far more than any other state in the nation. At the same time, California is now the poorest state in the nation, with the highest percentage of residents living at or below the poverty level. According to the Census Bureau, 23.5% (8.7 million Californians) are living in poverty. Florida is number 2 at 19.5%.

These numbers reflect a revision in how the Census Bureau measures poverty. In the past, it looked solely at income versus food costs. Under this system, the poverty rate would be only 16%. Under the new system, it now considers income plus assistance programs (e.g., food stamps, welfare) versus tax rate, childcare, housing and medical costs, in addition to food expenses, providing a much more realistic (though still incomplete) picture of families’ financial challenges.

Nearly 50% of California’s children live in or “perilously close” to poverty according to the newer metric, probably the single biggest reason for the state’s low test scores. True poverty rates are further obscured by the arbitrary and absurdly low federal threshold of $23,021 for a family of four. Considering that average monthly rents are $1552 in Los Angeles, $1431 in San Diego, $1938 in San Jose and $2106 in San Francisco, families must spend between $17,172 and $25,272 per year just to place a roof over their heads.

It is not just that better methods are providing a more accurate measure of poverty. The recession has also contributed to a dramatic increase in poverty. Between 2008 and 2011, for example, poverty rose 12% in Los Angeles County to 24.3%, and rose even more in some of the state’s rural counties. Conditions have grown so bad that California has seen negative migration patterns for the past eight years, according to the WSWS. A combination of low unemployment rates in Mexico (roughly half of California’s in recent years) and increased militarization of the border and deportations (a record 400,000 in 2012) has significantly reduced migration from Mexico. This has led to labor shortages in the state’s agriculture sector, with some farmers opting to let unpicked produce rot rather than increasing wages to attract domestic employees, since the former increases sales prices and profits, while the latter only cuts into profits.

While the state’s economy “recovers,” job growth has been primarily in low-wage service jobs. Thus many formerly unemployed are now earning far less than they did prior to the recession, contributing to the ranks of the working poor. Cuts to social programs has placed further downward pressure on living standards and contributed to the growing number of poor Californians under the new measurement system.

California’s 1% Goes On The Offensive

We've Saved the Schools! (Image from Flickr, Mike Licht, NotionsCapital.com)

Three of California’s billionaires have committed over $20 million of their own money to launch and win a ballot initiative that would help close California’s perennial budget hole, according to the Los Angeles Times. However, their plan would only increase tax revenue by $10 billion, not even enough to close next year’s budget gap, which is already projected to exceed $13 billion. It will do nothing to restore the $21 billion that has been slashed from K-12 education over the past three years, or the billions cut from higher education and services for the poor, elderly and disabled. But worst of all, it relies on regressive sales tax hikes and a restructuring of the income tax code that leave the 1% unscathed, placing the burden of closing the budget gap on the rest of us.

The Think Long Committee is headed by investor Nicolas Berggruen, philanthropist Eli Broad and Google Chairman Eric Schmidt. The group also includes former governors Gray Davis and Arnold Schwarzenegger, according to the Times.

On the surface, their plan seems like a well-intentioned attempt to help bolster California’s crumbling infrastructure. After all, it promises to increase K-12 funding by $5 billion per year plus add several billion more for higher education. In reality it is an attempt to take the wind out of the Occupy Wall Street movement, which has been criticizing the skyrocketing cost of higher education and the defunding of both K-12 and higher education. The Think Long millionaires and billionaires are hoping the promise of increased education funding will convince the protestors to go home and give up their desire to make “the rich pay.”

This is unlikely, as their plan calls for a regressive 2% sales tax hike that disproportionately impacts lower income peoples, and an income tax restructuring that places the burden of closing the budget gap on middle income people.

The new tax code would leave those making less than $45,000 without any income tax liability, while those in the $45,000-95,000 range would be taxed a modest 2%. However, there would only be one more bracket, $95,000 and above, which would be taxed at 7%. This means that lower middle class families would be taxed at the exact same rate as millionaires and billionaires. In reality, though, those making millions would be paying a much smaller percentage of their income in taxes, since they tend to have more deductions and exemptions and bring in the bulk of their wealth through capital gains, which would be unaffected by their plan.

The California Teachers Association plans to float a countermeasure that would increase taxes on the state’s wealthiest residents. However, even their plan doesn’t go far enough, aiming only to close the state’s existing deficit and doing little to repay schools for the huge cuts they’ve suffered over the past few years, let alone raise revenue to a level that might bring California back among the top five states in per pupil spending.

What the state needs is a revenue increase in the $50-100 billion range, something that it is fully capable of achieving if income taxes on the wealthiest residents are sufficiently increased, along with business taxes and capital gains taxes. If we go back to the pre-Reagan era, the highest tax bracket paid from 50-90% in federal income tax on all income above a certain threshold. There is no reason the state of California can’t do likewise, for example, raising tax rates on all income over $500,000 to 20% or even 50%.

If we consider just the state’s 80 billionaires, this could bring in more than $10 billion. However, if we include each of the state’s roughly 600,000 millionaires, such a tax ought to create a budget surplus.

Of course this is exactly the kind of scenario the Think Long group is trying to avoid with their preemptive strike.

WalSkool: Low Wages, Hard Work, No Excuses, No Poor Kids

The Walton Family Foundation is giving a $25 million grant to the KIPP Foundation, according to the Denver Post. The grant is expected to allow the company to double the number of charter schools it operates. There are currently 32,000 students in 109 KIPP schools in 20 states plus the District of Columbia. KIPP is poised to replicate the Walmart model, by opening schools in towns and cities throughout the country, paying low wages, overworking their staffs, and squeezing out traditional mom and pop public schools by skimming off the best students and district revenues.

The grant will most likely be used to recruit and train young, starry-eyed and bushy-tailed teachers who are willing to work extraordinarily long hours without overtime pay and often no union protections.  The KIPP school day runs from 7:30 to 5:00 on week days and 8:30 to 1:30 on Saturdays twice monthly. Teachers are expected to be on call during evenings to assist students with homework and they are required to work on Saturdays and summers. In Baltimore, KIPP teachers were averaging 18% more than regular district teachers in terms of monthly paychecks. However, if they were paid for all the extra hours they were required to work, they would have been making 33% more than their peers, according to a piece in Education Week.

While the schools are free and supposedly open to everyone, they are notorious for their high attrition rates, especially for students who enter with the lowest test scores. A study by SRI International found that 60% of entering fifth graders at four Bay Area KIPP schools left before completing the 8^th grade. Furthermore, their admission process screens out students who are not already self-motivated and compliant and parents must commit to much more involvement than required in traditional public schools, thus further weeding out many of the most challenging students.

Like other charter school, they get district funding, but are free from the rules governing traditional district schools. Additionally, they get millions of dollars in grants and donations from the likes of the Waltons, Fishers and other billionaires, which other district schools are denied.

With all these factors going for them, you would think that KIPP would be thriving, with long lines of families lining up to get in. Of course there are many who desire their low prices and brand name products. Many of their customers are just regular people trying to get by on a modest income, fed up with the high educational costs of traditional public schools.  Many others see them for what they are: a big box education management organization that exploits its workers and cheats its customers.

Can Good Teaching Overcome Poverty?

Huck/Konopacki Labor Cartoons

Can good teaching overcome the poverty? Of course not.

The notion that education is the great equalizer, that it is the poor kid’s ticket to the American Dream, is simply an extension of the American Dream mythology.

Statistics do show that those with a college degree earn far more on average than do high school drop outs and those who do not attend college and the overwhelming majority of today’s long term unemployed workers are those without college degrees. Furthermore, children who are successful in high school are more likely to attend and succeed in college. However, these are only correlations, not cause and effect relationships.

Consider that familial wealth is also correlated future career success, as it is with K-12 and college success. This does not mean that K-12 success causes college or career success, nor even that affluence does. Rather, the most logical interpretation of these statistics is that familial wealth provides numerous advantages to children that help them succeed at a higher rate in school, college and career.

The American Dream myth presumes that there is a level playing field and that everyone has the same opportunities if they only apply themselves and work hard. While we do all have the same right to an education, to sell our labor, run for office, or become an entrepreneur, there are numerous life circumstances that are not guaranteed or equally distributed that can facilitate or hinder our academic and career success.

Affluent children tend to have better diets, perinatal care and overall health, and less exposure to environmental toxins, each of which decreases the chances of being born premature, with low birth weight and brain size or having developmental or cognitive impairments. They have increased access to enriching extracurricular activities like travel, summer camp, sports, art classes, museums, and educational games. They tend to have greater early exposure to reading and complex vocabulary which results in an achievement gap before they have even started preschool or kindergarten (see Burkam and Lee and Hart and Risely). They have far less danger at home and in their communities and tend to have much less stress in their lives, thus reducing exposure to cortisol, the stress hormone, which can impair memory and learning. While it is true that affluent kids, particularly teens, are under increased pressure to take more AP and other advanced classes, the stress associated with this is not the same as the stress of regularly going hungry, suffering with untreated injuries and illness, and constantly seeing parents worried or complaining about their finances.

Their material security and their parents’ assurances that they will always come out on top confers greater self-confidence and self-efficacy in affluent children. They grow up observing parents and family members who are comfortable with and effective at negotiating bureaucracies and getting their needs met at stores and businesses. Middle class language, norms and mores (which are essentially the same as the language, norms and mores of school) become internalized and second nature to them by the time they are ready for school. All of this gives them a huge advantage over their lower income peers. They are more likely to take risks at school, like asking questions, asking for help, or persevering with something that is difficult. They are more likely to “get” what the teacher is asking or suggesting and to already know how and be able to behave according to the teacher’s expectations.

Can good teaching help some poor students succeed in school? Of course!

There are obviously poor kids who transcend their class backgrounds and move up into the middle class and occasionally even become members of the ruling elite. This does not mean that all of them will. It also is absurd and condescending to them and their families to attribute their success entirely or even mostly to their teachers. Many poor kids come to school with self-confidence, motivation, perseverance and a strong work ethic—attributes that are necessary to succeed in school and that stem mostly from their upbringings and home lives, not from school. Having good teachers most likely helps them to reach their potentials, as it does for affluent children, but it is not the only, nor even the main, reason they succeed.

Nevertheless, the Ed Deformers love to assert that poverty isn’t the problem and that it shouldn’t even be on the table. Of course, many of the most well-known Ed Deformers are billionaires who want to crush the public sector unions and open up public education to private entrepreneurs. So it should not be surprising that they do whatever they can to distract the public from the notion that they ought to give up some of their wealth for the public good.

All the poor kids need, they insist, is better teachers, super men and women who are willing to work 16 hours per day, and do more during each hour than do those other shirkers we politely call teachers. They continue to misrepresent the data on the teacher’s influence on educational outcomes, suggesting that teachers are the largest influence, when even the most conservative researchers say teachers are only responsible for 7-20% of students’ academic success.

Dana Goldstein recently posted links on her blog to some of this research in a rebuttal to RiShawn Biddle’s criticism of her essay on Steven Brill’s Class Warfare.

• This 1998 paper by Eric Hanushek, John Kain, and Steven Rivkin--economists who support free-market education reforms--concludes that teacher quality accounts for "at least 7.5 percent" of student achievement outcomes.
• This 2004 review of a number of studies on teacher effectiveness estimates that between 7 and 21 percent of student achievement differences can be attributed to teachers. See pg. 240. The authors are education researchers at Northwestern, the University of Chicago, and Tennessee State.
• On pages 3 to 4 of this 2002 University of Pennsylvania study, the researchers conclude that depending on the valued-added method used, between 4 and 28 percent of student achievement gaps can be attributed to differences between classrooms within a school, of which the teacher would be the most significant. 

Huck/Konopacki Labor Cartoons

The wealthy do not want to acknowledge the role of poverty out of fear that they might be asked to give up a tiny modicum of their wealth. Politicians don’t want to acknowledge it for fear of losing the support of their funders. School administrators don’t want to talk about it because they “don’t have any control over it,” and they want to focus on what their teachers can “control” through reforms (even if the reforms do not actually do much or anything to help poor children). Teachers do not want to talk about it because they’re too busy trying not to drown under the weight of all the new reforms. The Occupiers do want to talk about it, but ineffectually and delusionally, presuming that their mere presence in public spaces will be sufficient to get the rich to part with a bit of their wealth and that a few extra bucks going into education and public services will somehow end poverty.

Rich Get Richer By Not Paying Taxes (Or Employees)

Greed (by Muffet)

Democracy Now reported yesterday on a new study that found that 25 of the nation’s top 100 corporate executives made more last year than their companies paid in taxes. The study also found the salary difference between corporate executives and workers had grown from a ratio of 263-to-1 in 2009 to 325-to-1 last year.

Meanwhile, Congress recently approved a debt deal that that excluded tax hikes on the nation’s wealthiest individuals and corporations, thus perpetuating historically low tax rates. The tax rate for the highest bracket is now only 35%, yet from 1982-86 it was 50%, and from 1971-81 it was 70%. From 1936 to 1981 it never dropped below 70%. In fact, the only time prior to 1987 in which this tax rate dipped below 63% was in the roaring 20s, when the wealth gap was also massive.

In California, for example, revenue from corporate taxes has declined by 50% since 1981 and the wealthiest residents now pay a lower tax rate than they did two decades ago. Meanwhile, in two years, Californians will have added more than $100 billion to their personal income, with $20 billion of it going entirely to the richest 1% of Californians, and $60 billion going to the top 20%.