The Nightmare of Daycare

May 16, 2013
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Editor's note: This piece originally appeared on New America's In The Tank blog.

The average childcare worker in the U.S. earns less than a janitor. Sure, some daycare centers pay well, but the average parent can’t afford those high-end centers that can cost as much as public university tuition.

Piling on to that: The daycare industry is largely unregulated with low standards on quality of care. At an event this week based off of a recent New Republic article, The Hell of American Daycare, panelists showed how that painful reality -- a broken system full of tales of toddler deaths and injuries – can also have dire consequences for our economy.

Putting the Kibosh on Using Credit Checks in Hiring Decisions

May 14, 2013

Update 5/22/13: The original version of this post incorrectly used the term "credit score" in several places where "credit check" or "credit history" would have been more appropriate and accurate. The post has been edited to reflect that correction. Kevin Drum at Mother Jones has a piece that explains the process by which the credit reporting agencies deal with employee screening. Specifically, employers may request prospective employees' credit histories via a credit check, but these histories do not contain an actual credit score. Thank you to Greg Fisher at creditscoring.com for pointing out the error.

The use of credit checks to inform hiring decisions has been getting some much deserved scrutiny recently. Over the weekend, Charles Ellison for the Philadelphia Tribune and Gary Rivlin for the New York Times took a look at the practice of employers evaluating a job applicant's credit as part of the employment decision-making process. Ellison chronicles recent legislative efforts to curb the practice and points out that campaign finance data shows lawmakers are receiving sums of money from major credit reporting companies. Rivlin spoke with non-profit service providers and unemployed individuals who have experienced the negative effects of this phenomenon first hand.

On the surface, using credit checks as part of employment screening may seem like a simple, data-driven way for employers to ascertain a candidate's reliability. Upon closer inspection, however, using credit checks in this way is ineffective and exacerbates inequality.

Asset Building News Week, May 6-10

May 10, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include housing, retirement, wealth disparities, employment, and government assistance.

Upcoming Event: "The Hell of American Day Care"

May 9, 2013
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The Asset Building Program is hosting an event Monday to feature Jonathan Cohn’s recent article for The New Republic "The Hell of American Day Care." A great panel will help us piece together the complicated picture of day care systems (or lack thereof) in America and offer ideas that address the issue from multiple angles. RSVP to come Monday at 12:15pm or tune in online to watch live.

Opportunities for Young Anti-Poverty Activists to Participate in Upcoming RESULTS Conference

May 6, 2013

Our friends at RESULTS Educational Fund are gearing up for their 2013 International Conference to be held in D.C. this year July 20-23. RESULTS works to train a new generation of advocates to address poverty and hunger both in the U.S. and around the world. The REAL Change Scholarship program is designed to bring more young people to Washington, D.C. for the international conference and provide access to trainings on organizing and advocacy, a career panel, and a chance to network with the over 500 conference attendees. The scholarship covers most of the cost of conference registration, travel to D.C., food costs, and lodging for young people ages 18 to 28. This is a great opportunity for emerging leaders in the field to build their skills and make connections to a broad range of organizations working to end poverty.

Asset Building News Week, April 29-May 3

May 3, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include retirement security, racial wealth disparities, housing, and homelessness.

Medicaid Is Asset Building?

May 2, 2013

A new study came out this week evaluating the impact Medicaid coverage has on participants' health, financial lives, and general well-being. Sarah Kliff describes the study design:

The research uses data from Oregon, where the state held a lottery among low-income adults in 2008 for a limited Medicaid expansion. Of the 90,000 people who applied, 10,000 ultimately gained coverage. The lottery gave researchers a unique opportunity to conduct the first randomized experiment on Medicaid coverage, by studying those who gained insurance through the lottery and comparing them against a similar group of adults who did not.

The randomization of the study is an important feature: other studies have struggled to control for the differences in people who seek out Medicaid coverage and those who do not (but may be eligible). As Joe Colucci from New America's Health Policy team explains, "That created an incredible research opportunity - the randomized design allows researchers to really see the effect of Medicaid enrollment on people’s health, and hopefully put to bed the nonsense idea that Medicaid is bad for people’s health."

The study looked at what impact Medicaid coverage has on people's physical health, as measured by things like blood pressure, cholesterol levels and other "easy to obtain" indicators. In the two year study period, the researchers found "few short-term physical health gains," which came as a surprise and disappointment to some and as fodder for others to decry the program as ineffective. (The results on the physical health side are complicated and mixed, but I would refer you to Kevin Drum's analysis for more on some of the statistical issues at play. A question posed Aaron Carroll and Austin Frakt is also relevant here: "How many people saying that are ready to give up insurance for themselves or their family?") 

From an asset-building perspective, the really amazing finding from the study is on the impact Medicaid coverage had on participants' financial security. Jonathan Cohn explains:

The big news is that Medicaid virtually wiped out crippling medical expenses among the poor: The percentage of people who faced catastrophic out-of-pocket medical expenditures (that is, greater than 30 percent of annual income) declined from 5.5 percent to about 1 percent. In addition, the people on Medicaid were about half as likely to experience other forms of financial strain—like borrowing money or delaying payments on other bills because of medical expenses.

I bolded parts of that because I really want to emphasize what a striking impact having health insurance had on people's financial situations. On top of the benefits to low-income people's financial security, the study also reported "significant improvements in mental health outcomes, with rates of depression falling by 30 percent."

Can Mobile-Enabled Savings Products Bridge the Youth Financial Services Gap?

April 29, 2013
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Editor's note: This post was authored by Julia Arnold, a Research Fellow with the Global Assets Project, and originally appeared on the Center for Financial Inclusion's blog.

Many of the challenges to saving faced by the world’s poorest people were highlighted in the recent Washington Post article Microsavings Programs Build Wealth, Pennies at a Time.  Among others, the article articulated two especially salient points around microsavings: 1) we know the poor save, and 2) savings can help poor people withstand shocks to their income (such as unexpected medical emergencies or job loss) without going further into debt and poverty. However, low-income people tend to rely on informal methods of savings, often putting their money at risk of being lost, stolen, or ruined by floods or rodents. Having a safe, reliable place to save is both beneficial to and desired by the world’s poorest people. 

Asset Building News Week, April 22-26

April 26, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include financial security, housing, gender equality, the safety net, and workforce and consumer protection.

The Rise of the Dynamic Welfare State

April 24, 2013
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Earlier this month, President Obama released his budget for the next fiscal year. The budget can be thought of as a large set of “asks” for Congress to consider, including funding levels for existing programs and proposed changes to tax policies. It’s incumbent upon the executive branch to justify each of its proposals and make the case for reform. But the release of the President’s budget is also an opportunity to think holistically about how all of the proposals and current policies fit together as well as how they have changed over time.

In this spirit, we are publishing a paper by David Stoesz which examines the recent evolution of the policies which collectively comprise the welfare state. His 2005 book, Quixote's Ghost, offered a groundbreaking critique of how emerging philosophical battles fought between the left and right transformed the delivery of social policy, epitomized by the welfare reform efforts of the 1990s. In the subsequent years, he observes how the private sector has continued to increased its influence over welfare policy but has created new opportunities for policy reform in the process. Stoesz describes the emergence of what he calls the dynamic welfare state, which (in contrast to its more bureaucratic predecessor) is more open to policy innovations and places a greater emphasis on mobility and empowerment.

Many recent policy innovations have emanated from the nonprofit sector, which has increasingly incubated and directed demonstration projects and real world policy experiments designed to create an evidence base for policymaking. In the process, the responsibility for policy development has shifted so that it is no long an exclusive task of government. The paper explores the implications of these developments. It potentially creates a more dynamic space where multiple actors and institutions can explore alternative interventions which in turn can inform new policy efforts. The emergence of the asset-building field can be viewed in this context. Not only is this arrangement more reflective of the American experience, which historically has assigned a larger role for the private sector in the delivery of social policy than its European counterparts, but there may be a significant upside to these trends if government can be responsive to these learning and innovations. On the flip side, Stoesz introduces us to a host of new challenges, including the high-bar of an evidence-based policy standard and outsized corporate influence in the public sphere.

Beyond its excellent review of the evolution in social policy efforts, the paper argues sounds a cautious but hopeful note.

Undoubtedly, the dynamic welfare state will discomfit liberal social activists who have advocated benefits without attending to taxpayer concerns about the cost of open ended entitlements or the pernicious effects of social programs on recipients of services. But a dynamic welfare state will provide the justification for increasing investments in social capital to which conservatives have reflexively objected. Continual experimentation of social programs will prove of substantial public benefit in the long run as harmful programs are replaced by more effective interventions. Ultimately, the dynamic welfare state, which values consumer preference, optimizes program investments, and incorporates continual renewal will be more congruent with the requirements of 21st century America.

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