Microsoft stands by cuts in benefits

Update: Microsoft was embarrassed by the response to its benefit cuts–as they should have been–but aren’t backing away from them. So much for ‘listening to employee feedback’.


The man in charge of Microsoft Corp.’s worldwide personnel efforts didn’t exactly expect employees to celebrate the company’s decision to scale back aspects of its benefits package. He knew it would be tough news for many of them to swallow.

But Ken DiPietro says he was still a little surprised at how the response unfolded, with thousands of employees expressing their displeasure in what became a very public manner.

“I feel badly about it. I understand the emotion attached to it,” said DiPietro, Microsoft’s corporate vice president for human resources.

“I think we probably could have done a much better job internally of messaging and communicating the changes and giving a little bit better context.”

Those changes include less vacation time for new hires, a smaller discount for employees on Microsoft stock and the introduction of a co-payment for certain brand-name prescription drugs.

Employees, in an unusual display of dissent, strongly criticized the cuts in an informal, internal poll that was leaked to the media and reported widely last week.

More than criticizing the announced changes, however, some employees worry that the cutbacks are a sign of things to come — as Microsoft tries to reduce expenses in a broader effort to improve profit margins as revenue growth slows.DiPietro did not put that issue to rest. “I’m not going to comment on that. The reality is that every year we look at the total portfolio of compensation and benefits that our employees enjoy, and we make modifications in those elements — or not, depending on what the data says and what the surveys say and what employee feedback is.”

But despite the employee reaction to the latest announcement, the company doesn’t plan to reconsider its plans, he said. He cited the work that led to the decision, including market research, employee focus groups, surveys and other measures.

More on this later–there are ramifications for both workers and taxpayers in part of this plan. (To read the rest of the article, click the title.)

What Studs Terkel’s ‘Working’ Says About Worker Malaise Today


Published: May 31, 2004 by the NY Times

Babe Secoli, a supermarket checker for nearly 30 years, is proud of her dexterity in moving items along the conveyor belt. If asked, she will do a little dance, showing how she hits the keys on the cash register with one hand, pushes the food along with the other and intermittently whacks the conveyor-belt button with her hip. She knows what everything costs — the price list on the register is, she says, only “for the part-time girls.” Almost everything amuses her, especially the rich ladies who drop in to shoplift meat. “I’m a couple of days away,” she says, “I’m very lonesome for this place.”

Ms. Secoli’s is one of the dozens of throaty, acerbic voices in “Working,” Studs Terkel’s oral history of working life, which was published 30 years ago this spring. When it appeared, “Working” was a revelation, a window on the thoughts of Americans who were rarely heard from: hospital aides, skycaps, gravediggers. Many of the interviews follow a similar, surprising trajectory, beginning with mundane workplace details but quickly moving on to existential thoughts. Even for the lowliest laborers, Mr. Terkel found, work was a search, sometimes successful, sometimes not, “for daily meaning as well as daily bread.”

The oral histories in “Working” are wistful dispatches from a distant era. The early 1970’s were the waning days of the old economy, when modern management practices and computers were just beginning to transform the American workplace. In the last 30 years, productivity has soared, but job satisfaction has plummeted. It is hard to read “Working” without thinking about what has gone wrong in the workplace.

Mr. Terkel’s ragtag collection of little-guy monologues was a runaway best seller. Part of its appeal was the unusual, occasionally illicit glimpses it offered into the ways of the world. “If you work nights and it’s real quiet, I don’t think there’s an operator who hasn’t listened in on calls,” a switchboard operator says. “The night goes faster.” A gas-meter reader tells of the codes meter men put on customer cards when there was an attractive woman in the house.

Mr. Terkel’s interlocutors also offer deeper insights. A parking lot attendant holds forth on why working people are better tippers than Cadillac drivers. A prostitute reflects that she was “the kind of hustler who received money for favors granted,” not the kind who “signs a lifetime contract for her trick,” or who “carefully reads women’s magazines and learns what it is proper to give for each date, depending on how much . . . [he] spends on her.”

It is striking how many of Mr. Terkel’s subjects have found the meaning he says they are looking for. “Obviously I don’t make much money,” a bookbinder says, but she still loves repairing old books because “a book is a life.” A gravedigger recalls how impressed a visiting sewer digger was with his neat lines and square edges. “A human body is goin’ into this grave,” he says proudly. “That’s why you need skill when you’re gonna dig a grave.”

There are disgruntled workers in “Working,” who feel caged in by their jobs, but many others exult in their ability to demonstrate their competence, to show off their personality and to perform. “When I put the plate down, you don’t hear a sound,” a waitress says. “If I drop a fork, there is a certain way I pick it up. I know they can see how delicately I do it. I’m on stage.”

The 1970’s were a slower age, and much of the workers’ pleasure in their jobs is related to the less-demanding time clock. A hospital billing agent can take time off from dunning patients to look in on a man whose leg was amputated, who has no one to care for him. “If he’s going to live in a third-floor flat and he doesn’t have anybody home, this bothers me,” she says. A stewardess says she is supposed to spend a half-hour on a Boston to Los Angeles flight socializing with passengers.

Three decades later, we are caught up in what a recent book dubbed “The New Ruthless Economy.” High tech and new management styles put workers on what the author Simon Head calls “digital assembly lines” with little room for creativity or independent thought. As much as 4 percent of the work force is now employed in call centers, reading canned scripts and being supervised with methods known as “management by stress.” Doctors defer to managed-care administrators and practice speed medicine: in 1997, they spent an average of eight minutes talking to a patient, less than half the time they spent a decade earlier.

It is much the same in other fields. There have been substantial productivity gains. But those gains have not found their way to paychecks. In a recent two-and-a-half-year period, corporate profits surged 87 percent, while wages rose just 4.5 percent. Not surprisingly, a study last fall by the Conference Board found that less than 49 percent of workers were satisfied with their jobs, down from 59 percent in 1995.

When “Working” was written, these trends were just visible on the horizon. A neighborhood druggist laments “the corner drugstore, that’s kinda fadin’ now,” because little shops like his can’t compete. “Most of us, like the assembly line worker, have jobs that are too small for our spirit,” an editor says. “Jobs are not big enough for people.”

When America begins to pay attention to its unhappy work force — and eventually, it must — “Working” will still provide important insights, with its path-breaking exploration of what Mr. Terkel described as “the extraordinary dreams of ordinary people.”

We’ll be talking about this in future posts: how the workplace has changed, and how far along the process to dehumanize workers has come.

The Paquette Column and My Response To It, Part 1

‘K’ had his say–and beautifully put it was, too–but I haven’t had mine, so off we go.

Why should I apologize for making lots of money?

Who asked you to? This is a standard misstatement of the problem, Larry. Nobody wants you to apologize, we just want you to accept some of your responsibility to society. What’s so hard to understand about that?

By Larry Paquette, 1/13/2003

I AM A MEMBER of a small, elite group widely vilified by the press and in letters to the editor. I am an easy target.

Oh come on, Larry, quit whining. Since your mother obviously never explained it to you, I will. It is unseemly, impolite, rude, and downright arrogant for the rich (which, if you only make $100K, you aren’t, so lay off the wishful thinking and bonk your head against reality occasionally; pretend it’s a wake-up call) to go crying in their beer in public about how badly treated they are. Especially since you’re probably not the one being vilified, so why all the whimpering?

And let’s try to be just a tad honest here, OK? You went after the money because you desperately wanted ‘security’ (which, by the way, makes you a weenie without the guts to face the uncertainty we live with every day) and all the goodies (don’t bother to deny it), including the undeniable fact that people in this society are treated a whole lot better when they have money than when they don’t. In other words, you chased the bucks because you didn’t want other people with more of it than you treating you the way you’re treating us. That’s about right, isn’t it?

I’ve known a ton of you so-called ‘self-made’ assholes in my life and you’re all–or mostly all–the same. You want the power and the privileges that money brings with it: you want to buy cars most of us can’t afford and park them where we aren’t allowed to park because you think this makes you ‘special’; you want to buy a bigger house than most of us can afford–preferably on a hill so you can look down on us–and waste a ton of electricity with floodlights and sound alarms and a dozen lamps lining your walk so you don’t get a few drops of evening dew on your $500 Oscar Rudolpho loafers because you think this makes you ‘better’. So let’s not pretend you were busily following some noble calling all that time. You were making money, period, and you let your family hang while you did it. That doesn’t make you the devil but it sure as hell don’t make you a saint.

And while we’re about it, let’s have no more sniveling about what an ‘easy target’ you are. You haven’t seen ‘easy targets’ until you’ve seen a rich man verbally abusing his maid because she put out the wrong shirt or a passel of right-wing Congressmen descending on ‘welfare moms’ because they can’t feed their kids on $100 a month.

My sin is that I am in the financial top 10 percent of the country – those making $100,000 or more – the 35 percent tax bracket, a member of the so-called rich. So it is much easier to paint a picture of me with black heart and ice in my veins, cake crumbs all about, as I grow fat on the backs of the downtrodden.

Yeah, especially easy after a letter like this. You went a long way toward proving what a loving, tolerant heart you have with this thing, kid. Maybe you’re so po’d at the description because it hit too close to home, hmmm?

However, I feel no need to defend my position.

No? Then why did you write this column? Sure sounds defensive to me.

Over the years I have worked hard and earned every dollar of the obscene wealth I am accused of hoarding.

Right. All by yourself. Nobody helped you? Then how the hell did you manage college on only two minimum-wage jobs? Can’t be done, pal. Pell Grant pick up some of the slack, did it? You know, the govt program you ‘rich’ think is a waste of money and are trying to eliminate? Get a little financial aid? Housing allowance, book allowance, that sort of thing? Maybe a break on your tuition? So who do you think paid all that money for you, Larry? Think it appeared out of thin air, do yah? It was taxes, Larry, those monetary paybacks that one generation offers the next. But you got yours, so screw everybody who comes after you?

Larry, babe, I’m tryin’ not to see you as an ogre but you’re makin’ it awful hard.

What is different about my life and how I came to be here compared with those liberals so willing and anxious to separate me from my compensation?

You conservatives just don’t get it, do you? Everything is about you. We’re trying to save lives here and all you can think about is that one of those lives may cost you a few pennies of your precious ‘compensation’, like we deliberately starved these people just to give us an excuse to take your money. Well, I hate to break it to you, kid, but everything isn’t always about you. Sometimes it’s about *gasp!* somebody else. I know, I know, how dare we? As everyone should know by now, you are the center of the universe and everything revolves around you. The ‘social contract’ is no business of yours, except of course when it provides you with something you want. Otherwise, it’s an albatross around your neck. That extra $1000 you might have to pay every year as your share of fixing leaky roofs of schools so kids don’t have to try to learn while they’re up to their knees in cold water could be going for something really important, like a new gold shift knob for your Mercedes.

I worked two jobs to put myself through college.

Only two? You got off easy. How many years did it take?

While many my age were off to sporting events or dating or cooling off at swim parties on muggy August nights, I was working in a sweltering factory, assembling bicycles until 2 in the morning.

Poor baby! You actually had to work for a couple of years. Terrible. So now you want us to pay for the indignity you suffered, is that it? Excuse me, but if you were working on an assembly line, you weren’t working alone. Did you happen to notice any of the people (yes, I said ‘people’, not ‘welfare bums’ or ‘lazy animals’) working next to you? The people who did that awful job day-in and day-out, year after year, not just summers but winters and springs and falls? Did they dent your self-protective shell at all? I mean, they weren’t ‘cooling off at swim parties’, Larry, they were right there with you, sweating as much as you were, night after night. What did they ever do to you to earn such contempt except work alongside you without the benefit of being able to go to college?

And those kids who went to the ‘swim parties’ you’re so jealous of. You apparently think they were low-income loafers, just goofing off because they were too lazy to go to work, like you. But the chances are a lot better that they were from families richer than yours who could afford to send their kids to college without those kids having to work their way through like you did, so why are you taking out on us your sense of how unfair it all was to you? Because most of us went to work after high school, not so we could pay tuition but so we could survive. We had one summer of ‘swim parties’. ONE–the one after we graduated. We took it because we knew it would be the last time it would ever happen.

See, Larry, the kinds of places we work don’t do ‘vacation time’ much any more. I’ve had one ‘vacation’ in the past 6 years–5 weeks of paid leave when I accidentally put a nail through my hand with an air gun and broke some bones so I couldn’t work. That was it. That was my ‘vacation’. Unless you count being unemployed, of course, when employers in search of better stock prices laid us all off so they could prove how ‘lean and mean’ they were to investors. And if you think being unemployed is a ‘vacation’, you ain’t never been there when you had to live on half-pay while you went trudging through snow and freezing rain to apply for one of the six jobs available to you–and the other 500 laid-off workers in town–because the rest had been outsourced to Indonesia where guys like you could pay 11 cents an hour and pretend it was a ‘living wage’. That ain’t no ‘vacation’, pal.

I can’t say for sure where the bleeding hearts were then, but they were not standing next to me night after night, sweating over that endless assembly line.

Sure they were. You just didn’t see them. Or you saw them and didn’t recognize them, which amounts to the same thing. Because it was those ‘bleeding hearts’ who got you the grants that meant you could go to college in the first place–and only have to work two jobs to get through. Without those ‘bleeding hearts’ you loathe so much, you’d still be on that ‘endless assembly line’, only it would be endless for real–you’d never get off it, except to go somewhere else just like it. If it had been up to conservatives like you, that assembly line would have been your life. Forever. ‘Bleeding hearts’ got you off it and into school with programs conservatives like you fought tooth-and-nail to kill because those programs were ‘separating them from their compensation’.

One thing about you, Larry, I can see right now–you got a short and highly selective memory.

I look back over the years of struggle and sacrifice and can’t count the number of birthday parties, special events, and family gatherings missed because I had to work or finish a special project. I can’t begin to tally the number of empty nights or lonely weekends when, instead of spending time with family and friends, I was on a business trip halfway around the world.

Everybody’s got their priorities, and it’s obvious that yours didn’t include your family when they got in the way of you making money. Screw ’em, huh, Larry? First things first. But wait…I thought you conservatives were big on taking ‘personal responsibility’? Well, take some then. You dumped your obligations to your family so you could get rich. That was your choice. I didn’t make it for you, and neither did those ‘welfare bums’ you despise. So don’t go laying it on our doorstep. Whatever you did to your family, you chose to do when you picked making money over being with them. If we weren’t willing to make the same choice, does that make us evil?

Some of us–a lot of us–aren’t willing to live the kind of life that an obsession with money requires. We don’t ask you or anyone else to buy us the Jag we can’t afford on minimum wage; we’re only asking enough to put a roof over our heads, food on the table, clothes on our kids’ backs, and a 10-year-old Honda in the garage that will get us to work and back. Is that asking too much? Yet you wail and whine about it as if we were demanding the keys to your mansion and free access to your wall-sized satellite tv.

There is no loneliness like being in a strange country for months, struggling with an unfamiliar language while losing contact with those closest to you.

Stop it. I’m gonna cry in a minute.

There is no loneliness like sitting in a hospital waiting room with a sick kid while a nurse tells you your insurance doesn’t cover his condition and you don’t have the money to pay it yourself and nobody else you know has it, either, and you know your child is going to have to go right on being sick because there’s nothing you can do about it.

There is no loneliness like being on third shift for months at a time and never seeing those closest to you because you have to work the opposite end of the day, of going to work in the dark and coming home in the dark, never even seeing the sun.

There is no loneliness like standing at the kitchen cupboards at the end of the month and realizing you’ve got nothing left but beans because prices have gone up but your pay hasn’t and your next check is still a week away.

There is no loneliness like sleeping in a dumpster because your minimum wage job doesn’t pay enough to meet the rents that are soaring through the roof, or the loneliness of having to beg to use the YMCA showers every day, and there’s nothing in the world that can beat the loneliness of watching your family move into a cardboard box because you’ve just been evicted from the rat-infested hellhole a slum landlord was charging $700/month for (not including heat and electricity, those are extra) because ‘that’s what the market will bear’ and it don’t matter a damn to him that he could make money if it was half that much or that your whole month’s paychecks would barely add up to $700 and if you paid his insanely greedy rent your kids would have nothing to eat.

Three-quarters of the homeless in this country aren’t drunks or drug addicts, Larry. They’re families. Low income families of working poor that don’t make enough to pay the rents that landlords charge. Ever hear of the ‘affordable housing crisis’? Well, that’s what it’s about: forcing the market to provide shelter for the working poor at prices they can afford to pay on the ridiculously low salaries people like you offer. What a waste of your precious ‘compensation’, ay? Let ’em live on the street. Fuck ’em.

I wonder at how the mind-set of the country has changed, how the work ethic has been corrupted. When I was growing up, the only rule was that success and achievements resulted from, and were directly related to, hard work. You got back in proportion to the effort you put forth. That’s the way it has worked for me.

You poor, dumb, blind, boneheaded sonuvabitch. You really believe that, don’t you? You had a few lucky breaks–and you made the most of them, credit where credit is due–but you also had a lot of help you don’t acknowledge. What? You think if you ignore it that gives you leave to say you did it all by yourself? Nobody does it all by themselves. Nobody. It hasn’t worked that way for you because it doesn’t work that way for anybody. There’s no ‘fairness doctrine’ here. And you know there isn’t. Christ, George W Bush is President of the United States and he got there without working a single day in his whole life. No pissant bicycle assembly lines for him. Silver-spoon all the way. My friend Andy has been working at least two jobs since he was nine years old, went to college part-time for five years until he got his degree and then couldn’t get a job because he didn’t have enough experience, he was too old, and anyway we’re not looking for people with that skill any more. Meanwhile, he was suddenly considered ‘over-qualified’ for what he’d been doing and couldn’t go back to any of his old jobs. That’s not fair, either.

If you really believe that shit and you’re not just throwing dust in the air, then that is the single stoopidest thing I ever heard a college graduate say. That is so stoopid I’d have to guess you lack the native skill to get out of bed in the morning without help or the talent to be up and around. If the mindless pursuit of money turns otherwise intelligent people into the kind of skull-deep dopes who could say a thing like that with a straight face, then I’ll take poverty every time. God, who could live and be that dumb?

(to be cont)

Microsoft Cuts Employee Benefits

Corporate America is so determined to keep its profits up at the expense of its workers that even the richest company in the world is making cuts in its benefits programs because its stock price dipped a little. Needless to say, this sign of overwhelming greed isn’t sitting well with its employees.


In announcing a series of benefit cuts last week, Microsoft Corp. asked its workers to consider the long-term value of the changes to the company and, by extension, to them, as employees and shareholders.

But many employees are having a tough time seeing it that way.

An informal poll conducted among employees on the Microsoft intranet, but not under the official auspices of the company, suggests a groundswell of opposition to the changes and an unusually strong wave of dissent in a place where employees are known for their allegiance to the corporate cause.

Although the results don’t reflect a scientific sample of the employee base, the poll had drawn nearly 3,000 responses as of yesterday, with more than 90 percent saying they were either dissatisfied or very dissatisfied with the company’s decision to alter the terms of a program through which employees buy Microsoft stock at a discount.

“This change will cost the company far more in lost morale than they could ever save,” one person wrote in response to the poll’s request for comments. Hundreds of employees left written responses on the poll, all but a few of them criticizing the changes.

“This is a very disheartening change for me,” wrote one. “I fear what may come next. It seems as if everyone is expecting a slower rate of revenue growth for MSFT. Are cuts like this going to be the norm in order for us to squeeze out profits? What gets cut next?”

(To read the rest, click the title)

Garment Workers Force Changes

A group of garment workers and their teenage daughters forced the garment industry in Oakland, CA’s Chinatown to improve their working conditions.

By Lee Romney, LA Times Staff Writer

OAKLAND — For nearly a decade, Kwei Fong Lin tolerated numbness in her forearms. Like a great many Chinese immigrants who work in this city’s cramped and poorly equipped garment factories, her neck and back ached from long days spent hunched over a sewing machine while perched on rickety folding chairs, stools or even crates.

“We just took the pain as it came,” the 52-year-old Hong Kong native said in Cantonese.

But an unlikely revolution has taken root here. Today, dozens of women work in relative comfort while seated on customized ergonomic chairs. Simple table extensions relieve their tired shoulders. Wooden footrests keep their legs from dangling. Padded sleeves cushion the metal rods they must press hundreds of times a day with their knees to clamp and release fabric.

A city grant will soon bring the ergonomic equipment to other garment shops that dot Oakland’s Chinatown and other commercial strips. And the project has spawned a much larger study now underway in Los Angeles County — the heart of California’s rag trade.

Most surprising in an industry synonymous with powerless and mistreated workers: The women made it happen. They did it with the help of a group of teenage girls tired of seeing their seamstress mothers suffer, and a team of medical professionals, ergonomics experts, state health officials and product designers.

(It’s an inspiring story and an example of what govt and industry can do together when they try.)

The College Aid Crisis

Almost two weeks ago, we posted an interview with Richard Kahlenburg of the Century Foundation who said that low income students were being kept out of college in large numbers because they couldn’t afford it and grant programs had been cut to the bone by a Federal govt that wasn’t interested and state govts that were already severely strapped by the Federal pull-out from its responsibilities. Today the NY Times editorial board weighed in.

Published: May 25, 2004

Nearly a half-million Americans will be turned away from four-year colleges this year for financial reasons, thanks to rising tuition costs and declining state and federal aid for low- and middle-income students. Congress should modify the federal college loan system to deal with this problem. A proposed bill would save billions of dollars that could then be redirected into grants for tuition aid.

Right now there are two basic college loan programs. The direct loan system, which actually makes a small profit, allows students to borrow from the government through their schools. Under the vastly more expensive Federal Family Education Loan Program, private banks receive federal subsidies to make government-backed student loans. Colleges can participate in only one of the two systems. In the 1990’s, Congress talked about phasing out the costly bank-based program and replacing it with the direct loan program. Such a step could save billions of dollars a year that could be directed into the federal Pell Grant program, which helps pay the college expenses of low-income students with outright grants. This common-sense plan was killed by the banking lobby, but it has returned in the form of a bipartisan House bill known as the Direct Loan Reward Act.

The bill would encourage the nation’s colleges to participate in the less expensive direct loan program by giving half of the savings to them in the form of Pell Grants for needy students. Backers of the loan reform bill say it could channel enough money into Pell Grants to increase the size of the awards by more than a third at some public colleges, raising the maximum grant to about $6,000 a year.

Supporters of the bill calculate that taxpayers may save more than $6 billion annually if all of the nation’s colleges and universities move to the direct loan program. But the money saved and the increase in Pell Grants would be substantial even if only a significant fraction of the nation’s colleges made the switch. That result alone makes this bill a good idea.

You can help by calling your Representative and demanding that s/he support the Direct Loan Reward Act for low income students. While you’re at it, the next time you go to your bank, take a few minutes to speak to a manager and tell them you don’t appreciate the bank’s lobbyists killing the first reform bill and that you’ll pull your account if they don’t support DLRA this time around. Remember: it’s your money, not theirs.

New CA Health Insurance Law Faces Showdown

Gray Davis signed a law before he left office as Gov of California–replaced by the Terminator in a controversial recall election–called SB-2. Among other things, SB-2 requires all businesses with 50 or more employees to offer them health insurance. California businesses promptly started a referendum to undo it.

By Marc Lifsher, LA Times Staff Writer

SACRAMENTO — The November ballot battle over California’s controversial new law on employer-provided health insurance is shaping up to be both noisy and expensive.

The law, known as SB 2 and signed in the waning days of Gov. Gray Davis’ abbreviated term, is facing a recall of its own. A business-backed referendum on the Nov. 2 ballot could wipe the law off the books.

The contest officially kicks off today when a coalition that includes labor unions, doctors, nurses, church groups and retirees launches its defense of the 2003 law. Among other provisions, SB 2 will eventually require businesses with 50 or more employees to provide health insurance for their workers.

The pro-SB 2 campaign plans to play on the insecurity of California voters who worry about paying an ever larger share of their employer-provided health insurance or losing their coverage altogether.

For example, proponents of the law plan to focus on its less publicized provisions, which ban employers from dropping current health insurance plans and limit workers’ share of health insurance premiums to 20%.

At the same time, the “Yes on SB 2” campaign will soft-pedal the law’s mandatory-insurance provision, which has been a lightning rod for opponents.

And that’s exactly where business groups, which won’t officially launch their anti-SB 2 campaign until summer, see a soft spot. Employers argue that the law is a job killer that will raise their costs, lead to higher taxes and insert government meddling and bureaucracy into the healthcare market.

(To read the rest, click the title)

Affordable Housing in Crisis–Again

As we pointed out in the last post, costs that affect us most, like rent, and over which we have the least control have been skyrocketing while our wages remain stagnant or fall behind the inflation rate (which should tell you how little we make and how rarely we get raises–and how tiny they are when we do–because the inflation rate is so low). One of the few Federal programs to survive the Republicans’ relentless war on the poor is the Section 8 Housing Subsidy program. Well, now they’re going after it, too.

House Republicans who authorized cuts in federal housing subsidies for the poor are now fuming over the bad publicity about the cuts. It’s strange that anyone was surprised at the negative reaction. The cuts place tenants in some cities at risk of losing subsidized housing, and financial institutions are beginning to express doubts about continuing to participate in the kinds of development projects that have built much of the nation’s affordable housing.

If the lawmakers really regret the damage they have done, there is still time for them to undo it. The recent promise by the Department of Housing and Urban Development to shovel an extra dollop of money into the current program won’t do the trick. HUD needs to rethink its hostile approach to paying for the critical Section 8 program, which furnishes rent subsidies for two million of the country’s most vulnerable families.

Section 8 has survived the generation-long assault on public housing because it is based partly in the private sector. Rather than building affordable housing itself, the government has guaranteed subsidies for rents in the private market. Families, most of them living at or below the poverty level, pay 30 percent of their incomes toward rent, and Section 8 vouchers pay the remainder. Developers used the Section 8 guarantees as backing when they raised money for low- or mixed-income developments.

But despite its theoretical commitment to the private market, HUD has gotten tired of meeting the fast-rising housing prices in some markets. It announced recently — with Congressional blessing — that it would no longer pay the full cost of the vouchers. It froze federal funds at the level of August 2003, plus an adjustment for inflation.

This is a tactic the Bush administration has used in other areas as it tries to halt open-ended commitments for federal funds in favor of set block grants. A “block grant,” however, is simply a cut by another name. Neither the poor nor the local housing authorities have the power to make rents conform to those dictates. In high-cost areas like New York and San Francisco, officials will have trouble finding landlords and builders who will accept Section 8 tenants because the vouchers will no longer provide a predictable level of support. Families who have been lucky enough to get Section 8 help may wind up having to pay more rent.

Perhaps worst of all, the financial community has begun to react. A New England bank has scrapped an innovative home mortgage program aimed at promoting home ownership through Section 8. Wall Street bond traders have warned that the cuts could cause the bond market to lose faith in Section 8-related programs, undermining the bonding process that makes it possible to build affordable housing.

The incomes of the poor do not expand just because real estate values do. If these ill-advised cuts are allowed to stand, a public-private partnership that has been producing affordable housing since the Nixon years will wither and die.

(emphasis added)

Class Warfare, Dammit!

Phaedrus at No Fear of Freedom links to a story from the LA Times, ‘Though Far From Poor, a Family Struggles Daily’, that lays out the difference between ‘official poverty’–based on the Federal poverty index–and actual poverty, what social scientists cal a ‘self-sufficient income’, meaning you make enough to get by.

The Basurtos are neither destitute nor desperate. They have no debt, do not go hungry, and have managed to put three children through Catholic school. Yet their grip on the bottom rung of the middle class is precarious.By the local cost of rent, by what it takes to commute to work, by the price of food at the local store, by the cost of clothing and healthcare, a family like the Basurtos would need more than $40,000 to make ends meet in Los Angeles. Families with younger children and day-care expenses would need closer to $70,000.

That estimate, called a self-sufficient income, is an emerging measure of economic health seldom used in the calculus of poverty.

Policymakers still measure progress in the war on poverty using the federal poverty level, despite decades of quarrels over its shortcomings. Developed in the 1960s, the poverty level is based on a food survey from 1955.

It tells only how much is too little to live on, not how much is enough to get by on.

Phaedrus points to what that gap means.

By the federal benchmark, 13% of Californians are poor, according to the Census Bureau. By the self-sufficiency standard, 30% don’t make enough to get by.

It may not be that bad for the whole country but I’ll betcha anyt’ing it’s worse than what the gummint tries to tell us.

He also notes some inconsistency in the way inflation is measured:

One reason why the wage-earning middle class increasingly can’t afford California is that wages, adjusted for inflation, have been stagnant for two decades. In the same time, the percentage of income needed to pay for rent, healthcare and child care has spiraled.Economists call this “alligator economics,” because wages are a horizontal or falling line, while costs rise like an alligator’s upper jaw.

They’re saying that wages kept pace with inflation, but the cost of living rose dramatically. At least for those nearer the bottom than the top. So, somebody tell me again. What inna fuck does the inflation index measure? The price of gold bathroom fixtures? “Rents have gone up 30%, but gold bathroom fixtures are down 80%, offsetting rents, so there’s no inflation.” Oo, that helps me a lot.

The result of these two crooked measurements, he says, is what amounts to indentured servitude.

The American working class consists mainly of indentured servants. Oh, they’ve changed the forms so you won’t easily snap to that realization but, effectively, it still works like indentured servitude for the employer. Sure, you can quit, but you damn sure better get another job fast. We don’t have laws binding workers to their employer for long periods (ya know, ‘cept in the music business), and we don’t have company stores. But we have mortgages, and credit cards so usurious they amount to loan-sharking. And that “X% of Americans own homes” shit really cracks me up. If you’re still makin’ payments, you don’t own it. Doubt me? Stop payin’ the mortgage for a while. See what happens.

To read the rest–and you should–click the title.

Why are women more often living in poverty?

The Atlanta Journal-Constitution has an Op-Ed feature called ‘Woman-to-Woman’ in which conservative Shaunti Feldhahn debates various issues with liberal Diane Glass. Both are reasonably good writers and both manage to encapsulate the general differences between the political polarities. The current edition of their on-going argument concerns poverty among women. To read the whole thing, click the title.



A complex socio-economic issue like this often requires multiple answers, but here the answers are far more social than economic. And most reasons can be boiled down to one: The breakdown of the family.

I know that answer might make some folks (like perhaps Diane) want to tear their hair out, but many of the main poverty factors also are the main reasons why more women than men are poor. The simple truth is that skyrocketing rates of divorce and out-of-wedlock births combine to hit women harder than men. Childless women are not as affected by these factors — but statistically most women will have children, and far more women than men end up as the primary caretaker….(cont)


AJC columnist

It’s true that women are forced to carry the burdens of raising a family and, with a high American divorce rate, the majority of women in America who earn less than men have the extra burden of raising a family.

Yet, if Shaunti’s right — if female poverty is the result of disintegrating family bonds — why is it that women earn 50 cents on the male dollar worldwide?

Women are burdened with family obligations and the added costs of raising children from divorced households. Her solution, however, asks us to close the barn door after the animals have already escaped. Divorce may have its problems, but it also has its solutions. It offers women the freedom to leave unfulfilling or abusive relationships, giving women greater autonomy and choices. So now we should give that up? Let’s move forward, not backwards. (cont)