A Socialist Worker organization analyzes Madison, Wisconsin

Here’s Mark Rank at the NYT:

Contrary to popular belief, the percentage of the population that directly encounters poverty is exceedingly high. My research indicates that nearly 40 percent of Americans between the ages of 25 and 60 will experience at least one year below the official poverty line during that period ($23,492 for a family of four), and 54 percent will spend a year in poverty or near poverty (below 150 percent of the poverty line).

Even more astounding, if we add in related conditions like welfare use, near-poverty and unemployment, four out of five Americans will encounter one or more of these events.

I’m not at all astounded, as I earned $1500 when I was 25 years old.  (I taught one section at UW Eau Claire that year. Don’t even ask about my diet.)  But of course when people think about poverty they are not thinking about people who have gone to grad school at the University of Chicago.

Philip Crawford sent me an interesting article on poverty in Madison, Wisconsin, which appeared at SocialistWorker.org.  In the end they fail to come to grips with the information they provide, but they certainly do provide a lot of useful information.  It seems that my hometown, ultra-liberal “Madtown,” might be the most racist city in America:

The most racist city in the U.S.?

Sarah Blaskey and Phil Gasper report on a new study that shows the pernicious effects of racism as it afflicts African Americans in liberal Madison, Wis.

When I was young I was told by liberals that we needed to do three things to address poverty among African-Americans:

1.  End housing and educational segregation.

2.  Provide lots of jobs in close proximity to where African-Americans live.

3.  Provide high quality education.

There are few places in the world that do those three things better than Madison, Wisconsin.  And yet the socialist worker newspaper reports:

But while living standards for the white population in Dane County are higher than the national average, for the Black population, the opposite is true. On every indicator, with only two exceptions out of 40 measures, statistics collected in Dane County demonstrated equal or higher racial disparities between whites and Blacks than the national averages.

Here are just a few examples of the extreme inequality that exists in Dane County.

— In 2011, the unemployment rate was 25.2 percent for Blacks compared to just 4.8 percent for whites. Nationally, the unemployment rate was 18 percent for Blacks and 8 percent for whites.

— In the same year, “over 54 percent of African American Dane County residents lived below the federal poverty line, compared to 8.7 percent of whites, meaning Dane County Blacks were over six times more likely to be poor than whites.”

— More than 74 percent of Black children live under the poverty level as opposed to just 5.5 percent of white children. The report suggested “that this 13 to 1 disparity ratio may constitute one of the widest Black/white child poverty gaps that the Census Surveys reported for any jurisdiction in the nation.”

— “In 2011, African American youth in the Madison Public School District had about a 50 percent on-time high school graduation rate, compared to 85 percent for white students.”

— “African American adolescents, while constituting less than 9 percent of the county’s youth population, made up almost 80 percent of all the local kids sentenced to the state’s juvenile correctional facility in 2011.”

. . .

Unemployment disparities and other factors mean that the Black poverty rate in Dane County is 54 percent, almost twice the national average.

. . .

Criminal Injustice

Disparities in disciplinary processes extend beyond the public school system. In 2010, Black youth in Dane County were six times as likely as white youth to be arrested. This compared to a 3-to-1 ratio in the rest of the state and about 2-to-1 nationally.

“The striking result of these disparities is that African American adolescents, while constituting less than 9 percent of the county’s youth population, made up almost 80 percent of all the local kids sentenced to the state’s juvenile correctional facility in 2011,” according to the report.

The numbers are even worse for adult sentencing disparities.

“While Black men made up only 4.8 percent of the county’s total adult male population, they accounted for more than 43 percent of all new adult prison placements during the year [2012].”

Wisconsin as a whole has by far the highest rate of imprisonment for Black men in the United States. A from researchers at the University of Wisconsin-Milwaukee on Wisconsin’s Mass Incarceration of African American Males, issued at the same time as the Race to Equity report, found that in 2010, 12.8 percent of Black men were imprisoned in the state–almost twice the national average, and more than 3 percent higher than the next worst state.

Growing up in Wisconsin I never knew my home state was far worse than Mississippi.  What could explain this dismal record?

A part of the inequities reflect the fact that whites in Dane County do really, really well.  In Dane County only 3% of white children are poor and only 1% of white children in married households are poor.  And Dane county has over 400,000 whites.  But that doesn’t explain all of the data cited above.

Interestingly, the socialists blame the problem on integration:

“Small, Under-Resourced and Disconnected Neighborhoods”

Another structural disadvantage faced by people of color, in particular African Americans in Madison, is the highly fragmented areas on the fringes of the city where most of them live. Location has disenfranchised African Americans politically and socially and made it even harder for them to find accessible jobs.

The Race to Equity report showed that about “half of the area’s low-income Black households live in approximately 15 small, compact residential concentrations scattered within the city and around its perimeter.”

These enclaves are mostly rental developments, tend to be home to between 100 and 400 families of color and are usually surrounded by larger, predominantly white neighborhoods.

There are no large-scale, permanent Black neighborhoods anywhere in the city that would provide a social or political anchor for African Americans. In fact, county-wide, “there is not a single aldermanic district, supervisory district, planning unit, or even a census tract where African Americans constitute the majority of residents,” preventing significant political visibility. In 2013, African Americans only held a handful of public offices out of the hundreds in the county.

These African American enclaves generally lack “a church, a full-service grocery, a public school, social or civic clubs, developed open spaces, a bar, a restaurant, or a significant employer,” and tend to be “thinly or unevenly served” by public transportation systems.

High turnover rates, mobility, small size and many of the factors listed above inhibit strong community building in these neighborhoods.

According to the report, “Kin networks, for example, appear less wide, less deep, and less multi-generational in Dane County’s Black areas than in the larger, more rooted African American neighborhoods found in most American cities.”

This ghettoization has led to a fractured community of color, fewer social programs and fewer support networks, which limits the ability of African Americans to organize.

“Ghettoization” is an odd term here, as they are describing the exact opposite.  I don’t think the socialists realize that they are advocating segregation.  Words have powerful associations, so (they think) the current highly integrated distribution is bad, and ghettos are bad, ergo Madison must have lots of ghettos.  In fact, most African-Americans in Madison can walk three blocks and be in a predominantly white neighborhood.

I don’t have any simple answers, but here are a few hunches:

1.  The answer is not residential integration or segregation; those are beside the point.  The answer is not spending lots of money on schools, or integrating schools or segregating schools.

2.  One answer might be to create the sort of tight labor market that Ed Phelps has recommended for decades.  When we moved in this direction in the late 1990s it seemed to reduce poverty.  But more AD won’t get us all the way there; we’d overshoot toward higher inflation long before we employed all of the underclass.  We need much more radical (supply-side) measures.  I favor abolishing the minimum wage and welfare, and putting in place very high wage subsidies (per hour) for the working poor—much higher than today. Also remove licensing laws and zoning regulations for things like driving a taxi and braiding hair and selling food out of a truck. If there are any ZMP workers who still can’t find jobs without the minimum wage, provide them with government jobs at pay levels below the private sector.

My plan has lots of flaws (there would be lots of fraud, even if administered at the local level—at the national level it would be a disaster.)  But I think it would be less bad than current policy.  Current policy also has lots of fraud, and it encourages people not to work.

PS.  I don’t claim this would eliminate racial inequality, but I doubt any other plan would either, at least in the short run.


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29 Responses to “A Socialist Worker organization analyzes Madison, Wisconsin”

  1. Gravatar of Ironman Ironman
    10. November 2013 at 11:48

    Something the city of Madison might consider doing is eliminating its living wage ordnance, which prices many minorities out of a large number of job opportunities. In this case, simply aligning the city’s living wage scheme with the state’s minimum wage would open up many job opportunities for the city’s minority population.

  2. Gravatar of Steve Steve
    10. November 2013 at 13:31

    Even people who live on investment income (including millionaires!!!) experienced “poverty” in 2008-09.

  3. Gravatar of W. Peden W. Peden
    10. November 2013 at 13:53

    Scott Sumner,

    Apparentely you’re a “refined Irving Fisher”-

    http://mrtno.com/doc/fisher.pdf

    (The title and some of the text suffers from some translation problems- ‘expose’ for ‘exposit’, and I’m not sure that the author fully gets the full derogatory force of the word ‘crank’, but the paper has some very interesting historical details e.g. that interest rates were extremely sticky in the US 100 years ago, even in New York, such that banks would literally engrave their interest rates.)

  4. Gravatar of TravisV TravisV
    10. November 2013 at 16:17

    Joe Weisenthal:

    “Two Things You Have To Read If You Want To Understand The Fed’s Next Move”

    Read more: http://www.businessinsider.com/two-things-you-have-to-read-if-you-want-to-understand-the-feds-next-move-2013-11#ixzz2kI9BZZGY

  5. Gravatar of TravisV TravisV
    10. November 2013 at 16:28

    Marcus Nunes has a great post here: http://thefaintofheart.wordpress.com/2013/11/10/what-a-treat

    “there could be 5-6 new people on the Federal Reserve’s Board of Governors in the period ahead.”

    “My suggestions for members of the Board of Governors of the Federal Reserve: Paul Krugman, Scott Sumner and Christina Romer.

    Wonder why Krugman is included? Easy, he´ll stop talking about fiscal stimulus and liquidity traps and focus like a laser beam on making monetary policy work. It will be a life changing experience for him, and the rest of us will certainly be better off for it.”

  6. Gravatar of Geoff Geoff
    10. November 2013 at 16:31

    TravisV:

    “Wonder why Krugman is included? Easy, he´ll stop talking about fiscal stimulus and liquidity traps and focus like a laser beam on making monetary policy work. It will be a life changing experience for him, and the rest of us will certainly be better off for it.”

    So put morons in charge of a central bank so they’ll stop being a moron in what they are currently a moron about?

    Not sure how that will make us better off. He’ll likely want “laser-like” double digit price inflation and massive capital markets distortions.

    We’re better off if he becomes a janitor.

  7. Gravatar of benjamin cole benjamin cole
    10. November 2013 at 17:58

    And legalize push-cart or sidewalk vending, jineys, frontyard BBQs, prostitution and any other form of litte capital to entry business!
    These are excellent suggestions by Scott Sumner. Like Sumner, I wish there were an answer to the economic-incarceration picture for American blacks. Full employment and a very robust economy are the best options available…

  8. Gravatar of libfree libfree
    10. November 2013 at 18:15

    Interior decorators will still be licensed though….right. I can’t possibly choose a qualified person on my own.

  9. Gravatar of JohnB JohnB
    10. November 2013 at 20:59

    Great stuff right here Scott

    “One answer might be to create the sort of tight labor market that Ed Phelps has recommended for decades. When we moved in this direction in the late 1990s it seemed to reduce poverty. But more AD won’t get us all the way there; we’d overshoot toward higher inflation long before we employed all of the underclass. We need much more radical (supply-side) measures. I favor abolishing the minimum wage and welfare, and putting in place very high wage subsidies (per hour) for the working poor””much higher than today. Also remove licensing laws and zoning regulations for things like driving a taxi and braiding hair and selling food out of a truck. If there are any ZMP workers who still can’t find jobs without the minimum wage, provide them with government jobs at pay levels below the private sector.”

  10. Gravatar of Tom M. Tom M.
    10. November 2013 at 21:35

    I don’t get the wage subsidies. Aren’t the billions of dollars spent on low wage workers really subsidies for the likes of the Walton family?

  11. Gravatar of ChrisA ChrisA
    10. November 2013 at 21:43

    How many people are we talking about in the black community in Dane county? If it is just a few percent of the numbers of the white community it probably is partly the result of the small numbers fallacy we have discussed here before, basically any small sub-set of a population is much more likely to have widely different results compared to the average of a large population.

    In terms of what can be done about the situation, if it is not the natural variance of a small group, probably not a lot. Black people and white people, even in America, have different wants, desires and motivations, on average (not specifically). Partly this is about genetics, but it is also cultural. Not everyone wants to be a 9 to 5 wage slave, with years of self discipline and controlling your natural behavior so you can get a promotion to 5 positions below CEO, and this is not counting the years of study beforehand (most of which is about signalling that you can control your behavior rather than actual learning). There is no suggestion that the black people are actually starving to death, or really going without basic commodities (like housing, TV etc). What’s is really going on is that they are making different choices compared to those that while liberals would make for them. And that is good. Who would want to have a world where we all behaved like nice bourgeois northern Europeans?

  12. Gravatar of MikeF MikeF
    11. November 2013 at 03:44

    “Not everyone wants to be a 9 to 5 wage slave, with years of self discipline and controlling your natural behavior so you can get a promotion to 5 positions below CEO”

    That is why the entrepenureal outlet is so important…especially in minority communities. Minorities have one more reason to hate this..and that is that everyone in the 5 positions are white…but I’d would say that “not everyone” is really “nearly no one”…but people do it because they have been high expectations and responsibilities on them…or because they enjoy the work they are doing and can ignore the rest of it.

    Speaking of northern Europe..look at the lack of success of racial integration in Europe…French and Swedish riots…

  13. Gravatar of Morgan Warstler Morgan Warstler
    11. November 2013 at 05:13

    Let’s just call it what it is: GI / CYB

    The first step is to CODE THE PLATFORM.

    We just saw 3 kids redo Obamacare website in three nights.

    AEI, CATO, etc should throw up a kickstarter campaign for $50K to build the open-source GI / CYB platform and release it to states or foreign governments.

    Folks can come in see how they either attach their bank account or receive a Paypal Visa debit card, they can see how workers can promote their dream job: singer, musician, artist, blogger, chef, etc and look thru the listed jobs folks hiring want to have done.

    Now there’s a live working web environment, where people can SEE exactly how it works, something people can agitate for directly to Try it in Texas.

    Ultimately, it just a a big block grant waiver that has to pass Congress.

    Folks seeking change need to start realizing the future is Govt. as a Platform (GaaP), and that the admin costs of software platforms are a small fraction of the current pub sector labor force.

    The thing that solves these problems also solves our debt issues.

    The reason the software is so important, is that is crystalizes for lefty bloggers that the CYB is the only way GI happens.

    Lastly, Scott there will be a lot less fraud than you imagine. Ebay and Craigslist do serviceable jobs and they have far less legal identity assurances.

  14. Gravatar of Morgan Warstler Morgan Warstler
    11. November 2013 at 05:16

    In case anyone hasn’t yet bathed themselves in the waters of moral absolution to the down and out:

    http://www.morganwarstler.com/post/44789487956/guaranteed-income-choose-your-boss-the-market-based

  15. Gravatar of ssumner ssumner
    11. November 2013 at 06:10

    Ironman and Steve, Good points.

    W. Peden, Thanks for the paper.

    ChrisA, I doubt they want to be in prison, and I especially doubt they want to be in prison much more than blacks in other states. Also, you can’t discuss preferences without also discussing incentives. How would preferences change if welfare was abolished, as I propose?

    The sample size is well over 10,000, certainly statistically significant.

  16. Gravatar of Philip Crawford Philip Crawford
    11. November 2013 at 08:00

    Although the report is interesting, there are many problems with the methodology and the conclusions some (“most racist city”) are making.

    I’ve been saying the report is the dumbest and most brilliant report I’ve read in some time. Dumb, b/c of the way they compare ratios. Brilliant though in terms of marketing material. The report has definitely been shared significantly on the web – heck, I’ve been sharing it!

    Having lived in Milwaukee, Boulder, and Madison. I have some thoughts.

    1. Race and income are HIGHLY correlated in Madison. We have virtually no black middle class. This skews the numbers incredibly. “Black” in MSN is not the same as “black” in Milwaukee or the state, from an income/education/wealth standpoint.

    2. The black population increased by 50% in the past decade. Who are those people? This is important to understand, but the report provides no data. Many conversations have taken place in the past with some people wondering if Madison attracts a poor demographic from Chicago/MKE due to Madison being a _better_ place for them to live.

    3. The university student population “takes” jobs from this population? https://twitter.com/ATabarrok/status/398828468881739777

    4. The “hood” in Madison does not compare with that in Milwaukee. I’ve volunteered many hours in each. No comparison.

    5. Madison black children graduate at a rate about as abysmal as that in Milwaukee. Madison schools get to fly under the radar b/c (unlike Milw) we have such a small % of black students. This is changing as the public becomes more informed and the percentage of black students rises.

    6. I’d love to see a comparison between Madison and Boulder (or other similar cities.) Having lived (and volunteered) in Boulder, I can’t imagine Boulder has less disparity than Madison when measured this way.

    7. Madison’s poor people are fairly hidden for most of us who live here.

    8. Madisonians like to think they live in the Most Amazing City, so confronting them with these disparity issues is good.

  17. Gravatar of Floccina Floccina
    11. November 2013 at 12:37

    I favor abolishing the minimum wage and welfare, and putting in place very high wage subsidies (per hour) for the working poor””much higher than today. Also remove licensing laws and zoning regulations for things like driving a taxi and braiding hair and selling food out of a truck. If there are any ZMP workers who still can’t find jobs without the minimum wage, provide them with government jobs at pay levels below the private sector.”

    I strongly agree but perhaps sending a weekly check for $150 to each adult USA citizen would be better than a wage subsidy.

    Also an end to the war on drugs might help.

    Also: A report released today by the Urban Institute says that Black people are better off living in small to medium-sized Metro areas in the South and West than in the Midwest or Northeast.

    That is surprising because most would assume more racism in the south would hold blacks back, but maybe their being a higher percent of the population in the south helps or the strength of the black churches in the south might help.
    BTW there seem to be 2 exceptions to blacks doing better in the south and west, those would be NY and Louisiana. Studying those 2 could yield hints.

    @Tom M., Are you assuming that absent those subsidies the current Walmart workers would die or be too weak from starvation to work, if not how are they subsidies even remotely to the Walton family?

  18. Gravatar of ssumner ssumner
    11. November 2013 at 13:21

    Philip, All very good points. Take point #7. If you were to ride a bicycle around the neighborhood surrounding Cherokee middle school, you’d see almost no black people. And yet the school has a large black enrollment, I gather from residents hidden on the other side of the highway. I wonder whether there is any city in America where the core is so white and the suburban fringe is so African American and hispanic.

    Floccina, I agree on drugs, but I strongly oppose sending checks to people who don’t work. It’s a recipe for creating an underclass.

  19. Gravatar of mpowell mpowell
    11. November 2013 at 13:36

    Do you really think it’s better for single mom’s to work for $3/hr before subsidies and then have the state, effectively, pay for extremely low quality/cost child care? I’m most interested in preventing cycles of poverty, but it is not obvious to me why this represents a superior alternative to traditional wellfare. Societies without wellfare have also had an underclass so its not clear to me why you think wellfare perpetuates this.

  20. Gravatar of Floccina Floccina
    11. November 2013 at 14:21

    I strongly oppose sending checks to people who don’t work. It’s a recipe for creating an underclass.

    Hmm I will honestly have to reconsider. I used to think that a wage subsidy with a work requirement was best (and that ideally an hourly wage subsidy would best though impossible to police.) I came to think though, that most people not working in the taxed economy are still working. Some work for in family consumption and some work illegally for cash but few are completely idle. Again I will think it though. It seems to me that intelligently helping others without creating bad incentives is a very difficult thing to do.

  21. Gravatar of Tom M. Tom M.
    11. November 2013 at 14:56

    Floccina,

    Don’t the subsidies currently provided to low wage workers(housing assistance, EITC, etc.) suppress the wages Walmart pays? Could Walmart attract workers at 8 bucks an hour if those workers weren’t being subsidized by the government?

  22. Gravatar of Tom M. Tom M.
    11. November 2013 at 15:06

    By the way, I think the best public policy would be government as last employer. Phase out social security, medicare, medicaid, obamacare, all anti-poverty programs and the minimum wage in exchange for a guaranteed government job at say 12 bucks an hour indexed to inflation with health benefits and a retirement plan. It would de facto become the wage floor that all business would have to compete with.

  23. Gravatar of Floccina Floccina
    11. November 2013 at 15:24

    Don’t the subsidies currently provided to low wage workers(housing assistance, EITC, etc.) suppress the wages Walmart pays? Could Walmart attract workers at 8 bucks an hour if those workers weren’t being subsidized by the government?

    How would the subsidies currently provided to low wage workers(housing assistance, EITC, etc.) suppress the wages?

    If we guarantee a government job how would we make the employees work, if you can’t fire them what would make them do any work? Also wouldn’t the over-site of those employees be expensive?

  24. Gravatar of Tom M. Tom M.
    11. November 2013 at 15:44

    I could be totally wrong but it seems to me that a person needs a certain amount to live on(food, shelter, medical, etc). If that number is say $300 a week it doesn’t much matter to him if that comes in the form of food stamps, section 8 housing, medicaid, etc. AND an 8 dollar an hour job 20 hours a week.

    Assuming I’m right and the government programs are taken away, all of sudden that 8 dollar an hour job 20 hours a week doesn’t pay the bills. What would happen? My guess is that it would force the Walmarts of the world to bid up wages to attract and keep those workers. Therefore, while these programs do help the poor, they also subsidize billionaires like the Waltons who would otherwise be forced to pay better wages.

  25. Gravatar of Tom M. Tom M.
    11. November 2013 at 15:50

    As far as the employer of last resort, the government could certainly fire the lazy and shiftless(if it was up to me, anyway). And because all other means of government support would be gone, they would have a strong incentive to be neither lazy or shiftless.

    And also because all other government programs would be gone, I don’t think it would be more expensive to oversee the program than what we currently pay for the existing programs. It would probably actually be cheaper and we could cut taxes.

  26. Gravatar of Wimivo Wimivo
    11. November 2013 at 19:44

    So when are you going to come back to UW-Madison and give a talk, anyway?

  27. Gravatar of Floccina Floccina
    12. November 2013 at 06:47

    Tom M. If I was working at Walmart and getting food stamps and the food stamp program was ended, I do not think that I and all my fellow workers would go to management and say give me more money because I now need more or I will quit and if management said no I do think that we would all quit.

    Also I think that if you can be fired it is not a guaranteed job. SO suppose you fire and shows up for his guaranteed job the next day, what do you do? How much paper work would need to be done?

  28. Gravatar of ssumner ssumner
    12. November 2013 at 07:32

    mpowell, Imagine 5 single moms on a block all raising two kids on welfare. Now switch to a regime where one runs daycare for all ten kids, and the other four do low wage jobs with government subsidies. That boosts GDP and it also reduces the incentive to have kids you can’t support. How is that not better? I don’t get it.

    Floccina, You said;

    “It seems to me that intelligently helping others without creating bad incentives is a very difficult thing to do.”

    Yes, and I free admit that my plan might not work.

    Tom, You said;

    “I could be totally wrong but it seems to me that a person needs a certain amount to live on(food, shelter, medical, etc). If that number is say $300 a week”

    I’m afraid you are wrong. Most people in the world live on very low incomes, even adjusting for COL differences. Of course our living standards are higher, and thus expectations are higher (which is certainly reasonable.) Government jobs should pay less than the private sector, to encourage workers to get more productive jobs in the private sector.

    Wimivo, I doubt they would ever invite me. I get very few invitations to speak at colleges.

  29. Gravatar of Floccina Floccina
    12. November 2013 at 14:01

    I apologize for belaboring this off topic subject but I read the below and could not resist:

    Evelyn Forget, a health economist at the University of Manitoba, has done some of the best research on the results. Some of her findings were obvious: Poverty disappeared. But others were more surprising: High-school completion rates went up; hospitalization rates went down. “If you have a social program like this, community values themselves start to change,” Forget said.

    There are strong arguments against minimum or basic incomes, too. Cost is one. Creating a massive disincentive to work is another. But some experts said the effect might be smaller than you would think. A basic income might be enough to live on, but not enough to live very well on. Such a program would be designed to end poverty without creating a nation of layabouts. The Mincome experiment offers some backup for that argument, too.”For a lot of economists, the issue was that you would disincentivize work,” said Wayne Simpson, a Canadian economist who has studied Mincome. “The evidence showed that it was not nearly as bad as some of the literature had suggested.”

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