Tuesday, January 6, 2015

Tuesday, January 6, 2015

Louisiana median income continues to lag; Raising the minimum wage boosts social capital; Louisiana is still the world’s prison capital; Helping seniors build secure financial lives;

Louisiana median income continues to lag
Despite a series of rosy economic pronouncements by state officials, the income of the typical Louisiana family hasn’t increased much since the Great Recession. The typical Louisiana family took in $44,164 in 2013 – a mere 1 percent increase since 2008, according to an analysis by The Pew Charitable Trusts. By contrast, families in Texas saw their income jump 3.3 percent and Arkansas experienced an increase of 4.4 percent. The state with the largest percentage increase was North Dakota – a 22.1 percent increase.

There are some things Louisiana lawmakers can do to help Louisiana families earn more income. Increasing take-home pay for working families by improving the Earned Income Tax Credit would help hundreds of thousands of households keep more of what they earn, which they would spend at local businesses in their communities. Additionally, raising the minimum wage would provide an immediate raise to thousands of employees, create thousands of new jobs and pump millions into local economies.

 

Raising the minimum wage boosts social capital
Many conversations about the minimum wage focus on job creation, economic activity, profit margins and income fairness. Washington Post columnist Steven Pearlstein introduces another reason why states and the federal government should increase the minimum wage – social capital. As Pearlstein writes, increasing the minimum wage increases social capital, which in turn would improve the nation’s social fabric:

One of the things we know about economies is that those characterized by high levels of trust, collaboration and mutual concern — what economists call social capital — tend to generate higher incomes and growth rates. Moreover, the people who live in those places are happier and express more satisfaction with their lives, which at the end of the day is what we ought to care about. We also know that social capital is enhanced when there is a widespread belief that the distribution of income and opportunity is fair.

In the end, that may be the most important rationale for raising the federal minimum wage. Fairness matters. Decades of stagnant incomes and rising inequality have so torn the social fabric that we can see its impact in higher costs for business and government, diminished engagement of workers and a dysfunctional political process. A reasonable increase in the minimum wage would be a small step in restoring social capital.

 

Louisiana is still the world’s prison capital
Louisiana incarcerated 1,420 people for every 100,000 adults at the end of 2013, according to new data from U.S. Department of Justice. That’s the highest rate in the country, with Oklahoma in second place at 1,300 inmates per 100,000 adults. The Advocate editorial board says the high cost of keeping so many people locked up should be of concern to state policymakers – and voters – as we head into another election cycle.

A national conservative movement to address the costs — directly to the taxpayer, and indirectly to society — of long prison terms and a failure to rehabilitate inmates is headed in Louisiana by the Pelican Institute for Public Policy. The Pelican Institute is part of a broader coalition of liberal and conservative groups who share concerns about criminal justice issues. As taxpayers, there ought to be broad concerns about how many people are locked up. It’s costly not only for the guards and three squares for inmates daily but in capital costs: New Orleans faces continuing disputes over the size and operations of jail facilities, and Baton Rouge is now in a debate over the size and cost of a new prison.

Reforming sentencing laws, which would divert more nonviolent offenders out of jail and back to work under supervision, is part of the answer. Nevertheless, there are vested institutional interests in keeping the flow of prisoners into jails, and thus the flow of taxpayer dollars into agencies that house them, public or private.

 

Helping seniors build secure financial lives
Many of the 40 million older adults in the United States lack the financial assets they need to see them through their later years, when they require more health care and other services than they expected.  A new book, “Financial Capability and Asset Holding in Later Life: A Life Course Perspective”, concludes that older adults require financial knowledge and access to financial services in order to build secure lives. Editors Nancy Morrow-Howell, PhD, and Margaret S. Sherraden, PhD, have assembled contributions from leading experts, who present the latest evidence on financial capability and asset holding among older adults. The book’s recommendations to improve financial circumstances of people in later life can be summarized in four categories: “build capacity at the individual and household level, create more effective institutions, design better public policies, and advance knowledge through research.”

 

Number of the Day
1 percent
– The change in Louisiana’s median household income between 2008 and 2013 (Source: The Pew Charitable Trusts)