Impact of the crisis

We’re now months deep into a financial-economic-employment crisis across the country, and it’s especially severe in Michigan. What are some of the real impacts of this economic downturn on ordinary people?

The most visible impacts are on jobs and homes. Michigan’s unemployment rate has increased sharply in the past three months, to a current national high of 11.6 percent in January. There have been large layoffs in the auto-related industries in the state, and non-automotive businesses are now reducing their workforces as well as a result of reductions in business and consumer spending. Restaurants, retail shops, law firms, and accounting firms are eliminating positions, so job insecurity extends across the blue collar and white collar spectrum.

The loss of jobs feeds into a worsening mortgage foreclosure crisis in Michigan. Even before the surge on job losses Michigan had a high rate of troubled mortgages. That number now threatens to increase as a result of families’ loss of income, though there are a variety of new measures designed to help families to hold onto their homes.

A measure of the social distress for families in Michigan is the volume and nature of 2-1-1 calls that have been received over time. (2-1-1 is a growing national service in many areas that provides referrals to agencies and other resources for families and individuals facing difficult issues.) The United Way of Southeast Michigan provides detailed reporting of the volume, subjects, and demographics of its callers (link), and the results over the past 12 months are striking. Calls received in January 2009 are up by 30% compared to January 2008, at 22,518. The top five services for which referrals were provided included utility assistance, food, housing, temporary financial assistance, and employment. And emergency food providers such as Gleaners report a sharp increase in the amount of demand for their services in the past six months.

So how about the 80-85% percent of Michigan families who are still employed? (In addition to the 11.6% of people who are officially unemployed, there is a population of “hidden” unemployed people who are not counted in the official unemployment figures.) How has the crisis affected the majority who have not lost their jobs? It’s pretty clear that just about everyone in Michigan has been affected by the crisis. Anxieties about retirement investment accounts are at the top of the list — especially for people in their fifties or older. But a second major anxiety stems from job insecurity. With all the bad economic news, whose job will be the next to go? There is worry too about employers’ health benefits — will these benefits continue in their current form in the current economic environment? And these anxieties have led people to rethink their spending and consumption habits — leading, of course, to less demand in many sectors and perhaps another round of job reductions. Sales tax collections in Michigan fell by 18% in February from January; this is a direct indication of sharply reduced consumer spending (link). (Here is a report from the Chicago Federal Reserve Bank describing recent trends in Michigan retail sales.) And major purchases like automobiles and trucks seem to be on hold — witness the roughly 50% drop in demand for cars and trucks in recent months.

Another hardship that many families are experiencing is the frozen credit market and the stagnant home sales performance. Families who need to sell their homes are finding that there are few prospective buyers. And families looking to buy a home or a car may have substantial difficulty in finding a lender to provide the mortgage or car loan.

Add all these problems to a chronic American issue — the lack of medical insurance for upwards on 50 million Americans — and you have a rising financial and personal crisis for thousands of households in Michigan: how to pay for medical treatments when health benefits go away, or when you don’t have insurance at all. Unreimbursed care has increased sharply in hospitals in Michigan, resulting in severe financial pressures and the need for further cost-cutting; health systems in Michigan are currently laying off workers to adjust their budgets to current revenues.

So the impact of the current recession is sharply differentiated between people who have lost their jobs and those who haven’t. The first group is in serious, daily distress, having a hard time keeping their families provided with the necessities of life. The second group probably divides into segments with different levels and kinds of anxiety — those who have realistic fears of losing their jobs in the next wave of layoffs, those who are concerned that they may lose lose benefits or wages in the next year or so, and those who are anxious about the future value of their retirement savings. And it all adds up to a set of communities that are being forced to cope with a wide range of personal hardships, almost across the board.

Social hate

This is a difficult posting to write. The impetus comes from an exhibit presented by the Jim Crow Museum of Racist Memorabilia at Ferris State University in Michigan (link). The curators have put together a set of artifacts that capture horrific attitudes towards African-Americans, Asians, gays, women, and other individuals and groups in American society, extending over a century of our history. There are photos of mass rallies of the Ku Klux Klan in the midwest; images of the lynchings of Emmett Till and other African-American victims; t-shirts with racist images of blacks, Jews, Asians, Latinos, and gays; photos from the scene of the Oklahoma City bombing; and recent examples of racist depictions of President Obama. And, of course, it’s not just about iconography; it’s also about real violence against individuals from these groups. Hate-based murders continue to occur in the United States.

Just viewing these images is a profoundly disturbing experience. But here is the really difficult part: our society continues to embody these strains of hatred somewhere. And it continues to reproduce these hateful beliefs and attitudes for the next generation. We want to imagine that our society is peace-loving, tolerant, respectful of difference, and ultimately “good neighbors” for all members of our society. And this is certainly true for a very high percentage of Americans. But the exhibition makes it all too plain that this is not the case for everyone. There are individuals, and more importantly, there are groups, for whom racial, sexual, and religious hatred is a fundamental social and psychological reality. As investigators for the Anti-Defamation League (link) and the Southern Poverty Law Center (link) have documented, these extremist groups continue to exist, and they continue to recruit new adherents using sophisticated social media (web pages, video games, chat rooms), as well as more old-fashioned means of mobilization.

How are we to come to grips with the idea that some of our fellow citizens — in our own communities, in our state, and in our country — have such despicable attitudes and behaviors towards other human beings? And what precautions should our society take to defend itself against the violent manifestations that these attitudes and groups sometimes lead to?

It seems that schools have done a pretty good job of conveying the values of racial equality and social tolerance to our children. This has been an important priority for the past several decades. But at the same time, the hatred documented in the exhibits mentioned here can still be found among young people as well — not just gun-toting aging militia types. (Here’s a resource on youth hate crimes.)

We would all like to imagine that the twenty-first century is going to be a better time than the twentieth century. And a big part of that hope is the idea that hatred and violence between groups will subside, replaced by the values of tolerance and civic equality. Anti-semitism, racism, hatred of gays and lesbians, and the forms of violence that are associated with these attitudes, must disappear. It is tough to be reminded how far we are from that ideal in the first decade of the new century.

Mobile social mapping

Wouldn’t it be interesting if our GPS units gave us basic social data about the spaces we pass through, along with advice about where to find the closest fuel stop? This would function as a sort of “social reality meter” that would render more visible the social realities and human inequalities we traverse as we travel.

Such a device is entirely possible. It would require a spatially coded social data base, including characteristics such as infant mortality, high school completion, poverty, crime, single-parent families, home ownership, property values, and as many other characteristics as we might be interested in. These features would be attached to a geographical location (a census tract, for example, with a boundary file), and the map would dynamically display several selected variables as we travel through the region.

This kind of GIS mapping is commonplace on the desktop. (See ZipSkinny, for example.) But putting it into a mobile device — a GPS unit in the car or a GPS-equipped cell phone — would be a way of greatly extending our perception of the social landscape around us.

Here’s a possible snapshot of violent crime data as we drive across Chicago:

Or a drive through Washington D.C. showing the patterns of unemployment in the metropolitan area:

Or this drive through Cleveland observing the distribution of poverty across the city (measured by eligibility for food stamps):

The idea is “location-based social awareness” using the same technologies that cell phones and GPS devices currently use to keep track of local points of interest or “locations of your friends right now”; but providing the user with enormously greater ability to “sense” the social landscape around him or her. Socially conscious iPhone programmers — how about it!

Wealth in the United States

So how is wealth distributed spatially across the United States?

Here’s a quick effort at analyzing the Forbes list of the top 400 wealth holders in the U.S. Here is a snapshot of the graphic included on the page:

It is logical enough that there is a great concentration of these wealth holders in a few important cities — Chicago, Los Angeles, Dallas, Houston, San Francisco, New York, Boston. But this snapshot is of limited value in helping us get a handle on the social geography of wealth. It tracks only the very tip of the wealth iceberg.

We might take a different tack and try to use the concentration of million dollar homes across the United States as an index of the concentration of great wealth across space. Unfortunately, I can’t locate a convenient data source that provides this information — though it’s probably not too difficult to find. But here’s a related approach. The map provided below represents counties by their median home rental prices; this ought to be a reasonable proxy for house values. So we might reason that the highest home rental counties are also the counties with the highest income.

It would be interesting to see a series of maps on this theme along the lines of the treatment that Richard Florida offers for the spatial distribution of various salient social characteristics — for example, his maps of the distribution of different personality types across space.

Fair prices?

We live in a society that embraces the market in a pretty broad way. We accept that virtually all goods and services are priced through the market at prices set competitively. We accept that sellers are looking to maximize profits through the prices, quantities, and quality of the goods and services that they sell us. We accept, though a bit less fully, the idea that wages are determined by the market — a person’s income is determined by what competing employers are willing to pay. And we have some level of trust that competition protects us against price-gouging, adulteration, exploitation, and other predatory practices. A prior posting questioned this logic when it comes to healthcare. Here I’d like to see whether there are other areas of dissent within American society over prices.

Because of course it wasn’t always so. E. P. Thompson’s work on early modern Britain reminds us that there was a “moral economy of the crowd” that profoundly challenged the legitimacy of the market; that these popular moral ideas specifically and deeply challenged the idea of market-defined prices for life’s necessities; and that the crowd demanded “fair prices” for food and housing (Customs in Common: Studies in Traditional Popular Culture). The moral economy of the crowd focused on the poor — it assumed a minimum standard of living and demanded that the millers, merchants, and officials respect this standard by charging prices the poor could afford. And the rioting that took place in Poland in 1988 over meat prices is a reminder that this kind of moral reasoning isn’t merely part of a pre-modern sensibility.

So where do contemporary Americans show a degree of moral discomfort with prices and the market? Where does the moral appeal of the principles of market justice begin to break down — principles such as “things are worth exactly what people are willing to pay for them” and “to each what his/her market-determined purchasing power permit him to buy”?

There are a couple of obvious exceptions in contemporary acceptance of the market. One is the public outrage about executive compensation in banking and other corporations that we’ve seen in the past year. People seem to be morally offended at the idea that CEOs are taking tens or hundreds of millions of dollars in compensation — even in companies approaching bankruptcy. Part of the outrage stems from the perception that the CEO can’t have brought a commensurate gain to the company or its stockholders, witness the failing condition of many of these banks and companies. Part is a suspicion that there must be some kind of corrupt collusion going on in the background between corporate boards and CEOs. But the bottom line moral intuition seems to be something like this: nothing could justify a salary of $100 million, and executive compensation in that range is inherently unfair. And no argument proceeding simply along the lines of fair market competition — these are competitive rational firms that are offering these salaries, and therefore whatever they arrive at is fair — cuts much ice with the public.

Here is another example of public divergence from acceptance of pure market outcomes: recent public outcries about college tuition. There is the common complaint that tuition is too high and students can’t afford to attend. (This overlooks the important fact that public and private tuitions are almost an order of magnitude apart — $6,000-12,000 versus $35,00-42,000!) But notice that this is a “fair price” argument that would be nonsensical when applied to the price of an iPod or a Lexus. People don’t generally feel aggrieved because a luxury car or a consumer device is too expensive; they just don’t buy it. It makes sense to express this complaint in application to college tuition because many of us think of college as a necessity of life that cannot fairly be allocated on the basis of ability to pay. (This explains why colleges offer need-based financial aid.) And this is a moral-economy argument.

And what about that other necessity of life — gasoline? Public complaints about $4/gallon gas were certainly loud a few months ago. But they seem to have been grounded something different — the suspicion that the oil companies were manipulating prices and taking predatory profits — rather than an assumption of a fair price determined by the needs of the poor.

Finally, what about salaries and wages? How do we feel about the inequalities of compensation that exist within the American economy and our own places of work? Americans seem to accept a fairly wide range of salaries and wages when they believe that the differences correspond ultimately to the need for firms to recruit the most effective personnel possible — a market justification for high salaries. But they seem to begin to feel morally aggrieved when the inequalities that emerge seem to exceed any possible correspondence to contribution, impact, or productivity. So — we as Americans seem to have a guarded level of acceptance of the emergence of market-driven inequalities when it comes to compensation.

One wonders whether deeper resentment about the workings of market forces will begin to surface in our society, as unemployment and economic recession settle upon us.

China’s Charter 08

The New York Review of Books has published an English translation of an important emerging document calling for political and legal reform in China. The document is called Charter 08 (in analogy with Czechoslovakia’s Charter 77 in 1977). It is a citizen-based appeal for the creation of a secure system of laws and rights in China, and has been signed by several thousand Chinese citizens. The Chinese state has belatedly taken note of the Charter, and a number of lead proponents for the document have been detained by the police, including Liu Xiaobo, Zhang Zuhua, Gao Yu, and Liu Di. Perry Link provided the translation.

The central principles articulated in the Charter include:

Freedom
Human rights
Equality
Republicanism
Democracy
Constitutional rule

The specific points included in the Charter include:

A New Constitution
Separation of Powers
Legislative Democracy
An Independent Judiciary
Public Control of Public Servants
Guarantee of Human Rights
Election of Public Officials
Rural-Urban Equality
Freedom to Form Groups
Freedom to Assemble
Freedom of Expression
Freedom of Religion
Civic Education
Protection of Private Property
Financial and Tax Reform
Social Security
Protection of the Environment
A Federated Republic
Truth in Reconciliation

Perry Link makes the point that this is not a “dissident” document, but rather a public-spirited attempt to articulate a future for China’s polity.

The Chinese government should recognize that these are precisely the reforms that China needs for the twenty-first century. China needs to find its way to a genuinely law-based society; this is the point of items 1-7 and 14. China needs to rebuild a spirit of legitimacy joining government and the governed. And China needs to end the environment in which corruption, both private and public, is the most visible manifestation of unjust power that is visible to virtually all Chinese people.

Here is a very interesting audio interview with Perry Link on the NYRB website about the context of Charter 08. Also of interest is a piece that Daniel Drezner has posted on Charter 08 on the ForeignPolicy blog. Drezner’s view is that the goals of the Charter can only be realized through confrontation with a mass movement, not through consultation and negotiation. But there are other pathways through which a governing party has come to rethink the conditions of its grip on power in the past twenty years. Let’s hope the Chinese government has the wisdom to recognize the suitability of these principles for China’s future.

[January 22: see this very extensive and illuminating analysis of the Charter by Rebecca MacKinnon at Rconversation.]

Protest in China

Carrefour protest in Beijing

China has witnessed a visible increase over the past ten years in the number of protests, demonstrations, and riots over a variety of issues. Areas of social problems that have stimulated collective protests include factory conditions, non-payment of wages, factory closures, environmental problems (both large and small), and land and property takeovers by developers and the state.

It isn’t surprising that social conditions in China have given rise to causes of protest. Rapid growth has stimulated large movements of people and migrant workers, development has created massive environmental problems for localities, and opportunities for development have created conflicts between developers and local people over land and property rights. Following the terrible earthquake in Sichuan and the collapse of many buildings and schools with tragic loss of life, there was a wave of angry protests by parents against corrupt building practices. So there are plenty of possible causes for protest in China today.

What is more surprising, though, is that the state has not been successful so far in muzzling protest, or in keeping news of local protests from reaching the international public.

We might say that the presence of protest in a society is actually a sign of rough and ready democracy as well: it indicates that public opinion is important and can be mobilized, it suggests that the state is unwilling to use the most repressive means available to crush protest, and it suggests that the state can be affected by public protest. So the rising frequency of protest in China might be seen as evidence of a growing importance of the sphere of civil society within Chinese politics.

YouTube provides a surprisingly wide window on protests in China today. It’s worth viewing a sampling of clips from YouTube that surface when one searches for Chinese protest:

Unemployment for migrant workers

Labor protest in Shanghai

Shoe worker protest over back wages

Environmental protest in Xiamen

Protest about water pollution in Xiamen

Parents protesting children’s death in Sichuan

Will the sociology of the future be able to use the contents of YouTube, Twitter, or Facebook as an important empirical indicator of social change in societies such as China, Malaysia, or Russia?

Paying for health

picture-3

A person’s income determines his/her access to many things he wants and needs: food, clothing, transportation, housing, entertainment, and the internet, for example. And people who have higher income are able to consume more of all of these categories than people with lower income, if they choose to. More affluent people shop for food at Papa Joe’s or Whole Food; live in larger and more luxurious homes; buy their clothing from boutiques rather than Penny’s or the thrift shop; and drive multiple handsome cars. Poor people can’t afford the luxury end of these forms of consumption. And in some way our culture has judged that these sorts of inequalities of consumption are a legitimate and fair part of a market economy; if you judge that inequalities of income are justifiable (perhaps with some limits on extremes), then you pretty much have to support the idea of inequalities of consumption as well.

But what about goods that have a price but that are essential to living a decent human life? Food certainly falls in this category; if 30% of society could literally not afford to purchase enough calories to provide 2200-2900 calories per day for adults and 1800 calories for children, then we would probably have a different idea about the fairness of a market for food — the principle that says “to each according to his/her earning capacity” doesn’t seem very convincing in circumstances where it leads to malnutrition or starvation. In other words, if the normal workings of a market economy left a significant segment of the population without the ability to purchase enough food for subsistence, we would surely judge that this isn’t a fair or socially just way of distributing income and food. And there is an important point to be noted here: there is hunger in America, and the system of producing goods and income isn’t fully satisfying the subsistence needs of the whole population. (This is exactly what makes it compelling that our government needs to provide food assistance for the very poor, through food stamps or targeted income supplements.) So there is an important issue about the justice of current actual distributions of such basic goods as food, clothing, or shelter across the U.S. population.

But push a little deeper and consider the “market for health care”. Supporting one’s current healthy status is a costly effort; repairing the body in times of traumatic injury or serious illness is even more costly; and our society leaves a lot of the allocation of health care services to private purchasing power. Health insurance is the primary vehicle through which many Americans provide financially for their health care needs. Some people have insurance provided or subsidized through their employers; some families purchase health insurance through the private market; and many families lack health insurance entirely. Upwards on 45 million Americans are uninsured, including 20% of adults and 9% of children (CDC link). And this includes a wide range of Americans, from the extremely poor to the working poor to the solidly middle class.

It is clear that access to doctors, hospitals, nurses, and prescription drugs is a critical need that everyone faces at various points in life. It is obvious as well that one’s future ability to live and work productively and to enjoy a satisfying life is conditioned by one’s ability to gain access to health care when it is needed. It is also clear that uncertainty about the availability of health care is a major source of anxiety for many, many people in U.S. society today. So it is self-evident that decent health care is one of our most basic and unavoidable needs.

So what do people do when they lack health insurance and serious illness or injury occurs? This isn’t a mystery anymore; families go into debt to doctors and hospitals, they face bankruptcy, they find some limited sources of free care (free clinics, pro bono doctors’ services), and they forego “optional” treatments that may well extend the length or quality of life. And it is evident that this pattern results in very serious harms and limitations for people in these groups. People who have the least access to health care through our basic institutions may be expected to live shorter lives and to suffer more.

And what about people at the high end of the income spectrum? How do they relate to the problems of health? Here too the answers are fairly well known: they are able to seek out the best (and most expensive) specialists, travel to national centers for specialized treatment, and undergo advanced diagnostic tests that are not covered by insurance. (Here is a news story from CNN on boutique health care.) The affluent aren’t able to assure their health through expenditure — but they can certainly improve their odds.

In other words, ability to pay influences the quality and extent of health care that an individual or family is able to gain access to; and the health status of the family is affected by these variations in quality and access. So, to some meaningful extent, our social system places health care in the category of a market good.

But here is the question I’m working around to: what does justice require when it comes to health care? Is it right to look at health care as just another consumption good like shoes — affluent people wear Gucci and poor people wear Dollar Store, but everyone has his/her feet covered? Or is health care in a special category, too closely linked to living a full human life to allow it to be distributed so unequally?

It seems a bitter but unavoidable truth that there are very substantial inequalities in the provision of health care in our society. One person’s likelihood of surviving a devastating cancer may be significantly less than another person’s chances, simply based on the second person’s ability to pay for premium health care services. Further, it seems unavoidable that these inequalities are flatly unjust in any society that believes in the equal worth of all human beings. And where this seems to lead is to the conclusion that some system of universal health insurance is a fundamental requirement of justice.

Can America overcome racism?

The social and economic inequalities in America that are associated with race are staggering and persistent. Pick almost any category where you’d rather have more than less — income, health status, property and home ownership, likelihood of having health insurance, life expectancy, or likelihood of having a favorable outcome in the criminal justice system. In all of these categories there is a wide gap between black and white Americans. And this remains true even when we control for income — the health gap between white and black Americans earning more than $80,000 remains significant. So America has embedded a set of economic and social institutions that reproduce racial disadvantage. America remains a deeply racialized society.

These observations don’t necessarily amount to a conclusion about racist attitudes and deliberate discrimination on the part of most Americans. Attitudes and outcomes need to be distinguished. It is likely enough that there has been a lot of progress in conscious attitudes about race since 1950 for the majority of Americans. But persistent discriminatory outcomes can arise without explicit racist attitudes or discrimination on the part of specific individuals. Central examples of these forms of embedded “structural” mechanisms of racial discrimination include residential segregation and unequal educational opportunities for black and white children, based on where they live. Segregation certainly arose in part through deliberate efforts at excluding black people from certain neighborhoods — real estate “steering”, mortgage and insurance redlining, and overt violence and intimidation. But the mechanisms sustaining segregation today may well be more impersonal. The fact remains that patterns of racial residential segregation help to reproduce the kinds of racial inequality mentioned above.

These racial inequalities are also deeply intertwined with the social geography of major American cities. The concentration of poverty, racial isolation, poor schools, poor health facilities, and high crime rates create a multi-stranded social mechanism for reproducing racial inequality. It isn’t impossible for an African-American child to thrive and achieve in this environment — but it is certainly much harder. And the probabilities are stacked against her.

So, back to the main question: can America overcome its racism? Several things are necessary if this can happen.

First, we have to honestly face the facts — the outcomes mentioned above. We can’t delude ourselves by saying “the problems of race are finished in America” because we’ve elected an African-American president. The facts of racial difference in life outcomes need to be recognized, and we need to be vigilant in uncovering the mechanisms that lead to these disparities.

Second, we have to recognize why it is so important for our political culture that we address and resolve these continuing racial inequalities. Most fundamentally, we believe in equality — equality of worth and equality of opportunity. The persistent inequalities between black and white populations are a fundamental affront to these values. And we believe in democracy –but a democracy cannot thrive in circumstances of what amounts to two levels of citizenship.

But third, pragmatically, justice is a necessary component of social peace. Our country has seen violent outbreaks for over a century over the facts of contemporary race relations — Watts, Chicago, Detroit, Harlem, Miami. It is only enlightened prudence to realize that we must aggressively and consistently attack the institutional realities that reproduce racial disadvantage. Securing racial justice is a good investment in future social harmony.

Finally, we will need to have the resolve it takes to provide the resources necessary to assure genuine equality of opportunity for all Americans. This will be the work of a generation. But it will lay the basis for a more sustainable, harmonious, and productive society.

Poverty in the United States

There is a lot of poverty in the United States, and the regional patterns are striking. The map above represents 1998 data, and it tells a very sectional story about poverty in this country. (The map is presented by the Regional Development Institute of Northern Illinois University.) The largest concentration of poor counties is clearly in the deep south and in Appalachia. And it would appear that there is a high correspondence between poor counties and populations of minority Americans — Mexican-Americans in southwest Texas, Native Americans in the Dakotas and Arizona, and African-Americans throughout the south (Arkansas, Mississippi, Louisiana, and Alabama). The industrial midwest had relatively less poverty in 1998 (it will be urgent to see how this map changes once the restructuring of the automotive industry is complete). Even after the deindustrialization of many midwestern cities in the 1970s and 1980s the incidence of poverty at the county level remained relatively low. And the Boston-New York-Washington corridor shows one of the lowest levels of poverty — along with some of the highest population density in the country.

But what about the distribution of urban poverty in the United States? Here is a map of the metropolitan and micropolitan statistical areas of the United States (hosted by New Markets Tax Credit Resource Center).

Here is a map of poverty rates for Chicago in 2000 (host):
Here’s Houston:

And Detroit (% children under poverty in 1990):

What each of these metropolitan maps indicate is the very high concentration of poverty that exists in most American cities. And these patterns illustrate at the city level the same point noted above at the national level: that there is a very close correspondence between poverty and race.

It is time for a well-planned “war on poverty” once more. And let’s hope that the Obama administration will find the strategies and resources that are necessary to address these persistent patterns of poverty and inequality.