Category Archives: Poverty & income gap

Why Released Felons Fail

stacked_odds2by Sarah Scarbrough

Society chastises criminals, felons, addicts and others getting out of jail. The average citizen today thinks this population consists of bad guys. Why should people care about repeat offenders? They deserve to be locked up and the key thrown away. But in the next breath, people decry generational cycles of criminality and the high rates of recidivism.

Have you ever thought the two might go hand in hand?

It isn’t easy to escape the cycle. Let me present three situations that will make you think in a different vein – and, if not, at least give you food for thought. The stories below are true; some names have been changed to protect their identity.

Meet Scott. He’s a 39-year-old African American male. Scott met a girl that he really fell for. He was over 18; she was just shy of 18 years old. The girl’s mom didn’t like Scott, not one bit. She threatened him if they didn’t break up. Scott cared too much for the girl to leave her, so the mom filed charges against him for having sex with her underage daughter. At this point, in 1998, Scott was put behind bars. Criminality began with narcotics and related charges over the next 18 years.

Scott just finished serving 24 months for a hit and run. While he was locked up this time he did everything he could to rehabilitate himself. He worked extremely hard, and seven days a week. Many people recognized his work and he received constant commendations. As Scott neared release, however, he had nowhere to go. He literally was going to be homeless after release. He did not have one single person to call for help, not even someone to pick him up after he was released. He had four t-shirts and three boxers to his name – that is it. No socks, shoes, or pants. No money either, not a penny.

Scott seemed destined to live on the street corner somewhere, maybe under a bridge if it was raining. Fortunately, he was such a hard worker and had reached out for help to so many jail staff while incarcerated that donations came in like crazy. (The picture above shows the donations.) He received two bus tickets as well. But he was had nowhere to live. Not only did he not have money to fund a place, but he was a sex offender, making it close to impossible to find his own place. Because he was going to be on state supervision, he was set up to stay in a local hotel. Between the donations, including some non-perishable food items, and the hotel, we thought he would do OK. Little did we know the continued obstacles he would face.

Scott had no refrigerator or microwave in his hotel room, thus preparing food was tough. He did not have any money – literally not a dime. How was he supposed to eat? Open a a can of green beans and eat straight out of the can. Or eat protein bars for all three meals? He could not eat the mac ‘n cheese because he couldn’t heat the noodles. There were roaches covering his hotel room – on the first morning at the hotel he killed over 50 roaches (not an exaggeration). He needed to get a state ID to get food stamps. Well, the ID costs $15. He then needed a document from the Virginia State Police to get the ID. That cost $30. With no money, how could he get these items? Without these items he couldn’t get food stamps. Without the food stamps, he could not to eat. Without an ID he couldn’t get a job either. Wow, talk about setting someone up for failure. No wonder some many people have trouble breaking the cycle.

Fortunately, someone he networked with while in jail took Scott under his wing. His friend paid for the ID and the state police document, bought him McDonalds for lunch on the day of release, and bought him Wendy’s for lunch the next day. Wow, thank goodness he found this person. But not everyone in Scott’s position finds someone to help. If he hadn’t had this person helping him, it would have been next to impossible to escape the cycle. Sadly, the person who took Scott under his wing stated to me via text, “He seems depressed. He’s been institutionalized. He’s on his own, with nobody and he’s lonely. To top it off, HE KNOWS HE HAD IT BETTER IN JAIL.”

Wow, he had it better in jail. But it makes sense. Three meals, heat, and a roof over his head with no roaches, all of his basic needs were taken care of. Despite these obstacles, Scott began working on his forklift certificate after release, got a job interview in two days seven days after release, and landed another job interview later in the week. This is awesome. But how hard will it be for Scott to succeed considering everything is working against him? Continue reading

Breaking the Cycle of Debt and Suspended Licenses

Joe Herbin, driving worry-free and working as a forklift operator at Frito-Lay.

Joe Herbin, driving legally and working as a forklift operator at Frito-Lay.

by James A. Bacon

Joe Herbin has always been a hard worker. When he was 15 years old, he’d accumulated the $1,200 it took to buy an old Cadillac. The fact that he didn’t have a driver’s license — or was too young even to get one — wasn’t a deterrent. He installed a bad-ass sound system and drove around town like the king of the world for about a week, then had an accident in a gas station. The policeman gave him tickets for about four different violations — the first of many to come.

Herbin kept driving, though, and he kept racking up tickets in and around the City of Richmond, often while driving to or from work at Wal-Mart, Target or his cousin’s music CD shop. He prayed every day that he wouldn’t get stopped and slapped with another fine, penalty or gig in jail. He was around 22 years old when he was driving his pregnant girl friend to the hospital, when he got stopped again. This time someone finally told him about the Drive to Work program, a not-for-profit group dedicated to helping people with suspended licenses restore their driving privileges so they can function as productive members of society.

When Drive to Work staff tallied up all the fines, penalties and back interest, they found that Herbin owed a total of $7,500 to courts in five jurisdictions, each with its own set of procedures for collecting the money. By his own admission, Herbin is a “careless person,” lacking the temperament to make payments to so many court clerks on a regular basis. Drive to Work created a plan whereby he made a single monthly payment of $357 to the non-profit, and staff made sure each court clerk received the money on time. Drive to Work also negotiated a deal allowing Herbin to receive a restricted driver’s license allowing him to drive between home and work, home and church, and home and daycare.

Today, Herbin has worked his fines down to under $1,000 and his monthly payments to less than $50. He now drives a forklift for Frito-Lay making $17 an hour, as well as a part-time job for extra cash, and he lives in a committed relationship with the mother of his three children.

Herbin’s story is surprisingly common in Virginia. A recent study conducted of 606 of Drive to Work’s clients found that fines, penalties and interest ranged as high as $33,000, with average debt about $4,800. Clients owned money to an average of 3.6 different courts.

At an awards and recognition banquet Monday, Drive to Work President O. Randolph Rollins described the predicament of another client. Of the $8,000 in obligations he’d amassed, 35% consisted of unpaid fines, 45% of court penalties relating to hearing his case, and 20% interest.

The system creates a vicious cycle for poor and working class people who build up fines they cannot hope to repay, Rollins said. Many continue driving because they can’t get to work any other way, lose their license and lose their jobs. The situation is a Catch 22: Without work, they have no hope of generating earnings to repay the fines. Indeed, the inability to repay fines accounts for 37% of all suspended licenses in Virginia, Rollins said  — affecting nearly 200,000 people across the state.

Recognition of the need to restore drivers licenses became a political issue during the McDonnell administration and with bipartisan support has continued during the McAuliffe administration. The Department of Corrections has implemented a program to help felons prepare while still in prison to get their licenses when they re-enter society. And Del. Manoli Loupassi, R-Richmond, submitted a bill in the 2015 session to study the use of drivers license suspensions as a collection method for unpaid court costs. Although that bill failed because of a technicality, said Rollins, there strong support for passing it next year.

The initiative to restore driving privileges is part of a larger movement to reintegrate felons into society upon their release. The days of giving an offender $20 and bus ticket home are long over. Virginia has one of the best track records in the country for recidivism, said Harold W. Clark, director of the Department of Corrections. Second only to the state of Oklahoma, the recidivism rate is just under 23%. The rate ranges as high as 60% in other states.

While the biggest risk factors for recidivism include antisocial personality, antisocial associations and dysfunctional family, the ability to find employment is one of the “top eight,” Clark said. “Not having a driver’s license is a serious problem. People without driving privileges are effectively excluded from many jobs.”

Many offenders don’t know why their license was suspended or how to get it back, said Clark. A program like Drive to Work helps them navigate the bureaucratic maze, create plans for repaying fines and get offenders a license, even if just a restricted one, that allows them to seek employment.

Conservatives, Planned Parenthood Is the Wrong Target

Poverty fighter: the IUD

Poverty fighter: the IUD

by James A. Bacon

Like millions of other Americans, I was horrified by the videos detailing the traffic in aborted fetal tissues and organs in which Planned Parenthood takes part. But I’m not joining the parade of conservatives calling for the de-funding of the organization. Not only would de-funding be a meaningless gesture — Planned Parenthood doesn’t use federal funds to finance its abortion operations — it would not address the complex moral trade-offs arising from the harvesting and sale of fetal parts. That trade would continue even if Planned Parenthood shut down tomorrow.

What Planned Parenthood does use federal money for is family planning, pregnancy tests and prenatal care for low-income women. While conservatives have legitimate reasons to oppose abortions — I share some of their reservations, especially concerning late-term abortions — conservatives should support Planned Parenthood’s distribution of contraceptives on the grounds that family planning is the most effective anti-poverty (and anti-abortion) program we know of.

Poverty in America is intractable. Fifty years after Lyndon Johnson declared a war on poverty, we’re still fighting it. The usual liberal solution — spending more money on income transfers and creating new poverty-fighting bureaucracies — is not working. Indeed, the liberal paradigm perpetuates poverty by weakening the incentive of poor people to lift themselves from their condition.

We continually hear that more children live in poverty than adults. That’s because, while many people manage to rise out of poverty, their departure from the ranks of the poor is more than offset by the large number of children born in poor households. Indeed, women in households making less than $10,000 per year give birth at nearly twice the rate of women making $35,000 a year or more, as seen below.

Source: Statista

Source: Statista

And that raw fertility number understates the nature of the problem. Poor women also tend to bear children at younger ages than higher-income women, who tend to defer childbirth until after college and marriage. Thus, a poor woman bearing a daughter at age 18, who in turn bears another daughter at age 18, adds two people to the ranks of the poor in the same period of time in which a high-income career woman bearing her first child at age 36 adds to the ranks of the non-poor.

I rarely find myself in agreement with Washington Post columnist Catherine Rampell, but she has the facts on her side in this instance: Low-income women are no more likely than higher-income women to be sexually active, but they are less likely to use birth control. Thus, says Rampell, a poor woman is more than five times as likely to get pregnant by accident than an affluent woman.

Anyone interested in fighting poverty without expanding the federal entitlement programs that are driving the country toward fiscal insolvency should enthusiastically embrace the policy of giving poor women more control over their fertility. When poor women control their pregnancy, they are likely to have fewer children, and when they do have them, they are more likely to do so at a later date — waiting, perhaps, until after they have graduated from high school, found a job and possess the maturity and financial resources to be a good parent.

Family planning is one of the very few anti-poverty programs that work, and it’s arguably the most cost-effective. Conservatives need to stop venting about Planned Parenthood and turn their attention to the larger and more challenging job of crafting an ethically responsible approach to the trade in fetal organs.

Income, Ethnicity and Student Indebtedness

by James A. Bacon

Both sides of America’s ideological divide acknowledge that student debt is a huge and growing problem, and both sides deem the climbing delinquency rate on student loans to be a bad thing. The question is what to do about it. The Obama administration has chosen to target private career colleges, whose students accumulate disproportionately large loans and fall behind on their debt payments at disproportionately high rates.

As the Obama administration points out, students at for-profit colleges represent only about 13 percent of the total higher education population, but about 31 percent of all student loans and nearly half of all loan defaults. “Higher education should open up doors of opportunity, but students in these low-performing programs often end up worse off than before they enrolled: saddled by debt and with few—if any—options for a career,” said U.S. Education Secretary Arne Duncan in a press release last year.

The recent publication by the Department of Education (DOE)’s online College Scorecard” was designed to bring some transparency to the cost and performance of public colleges, private not-for-profit colleges and private for-profit career colleges. There is no question that attendees of for-profit institutions experience are far more likely to fall short on student loan payments. But for-profit institutions argue that their programs aren’t the problem. The problem is that their students consist disproportionately of low-income and minority students who have trouble carrying their debt load regardless of the type of educational institution they attend.

Drawing upon College Scoreboard data, I decided to look and see what the situation looked like for Virginia-based institutions. Do private, for-profit colleges in the Old Dominion fit the stereotype of preying upon low-income and/or minority students and saddling them with unmanageable levels of debt?

First, I collected College Scoreboard data on (a) for-profit colleges, (b) community colleges, and (c) two public universities with high percentages of low-income and minority student bodies, Norfolk State University and Virginia State University. Then I plotted four different variables against the percentage of students at each institution that failed to pay at least $1 of the principal balance on their federal loans within three years of leaving school.

One logical explanation for the failure to pay down debt is low post-school earnings of students. The lower a student’s earnings, the heavier the burden of student-loan debt, whatever the size. There is indeed a modest correlation between earnings and debt troubles, as seen in this chart:

Data source: College Scoreboard

The R² of 0.125 suggests that about 1/8th of the variability in students’ ability to support their debt hinges on how much they earn after they leave college (making no distinction between whether they graduate or not). That’s not insignificant, but it’s less important than other variables.

Next I looked at the size of the monthly student-loan payments. All other things being equal, students with larger monthly payments, I conjectured, would have a harder time keeping up with their debt than students with smaller payments. This hypothesis is borne out by the numbers.


The R² of 0.2642 was twice as high as that for post-college earnings, suggesting that this variable has twice the explanatory value as post-college earnings. Continue reading

Virginia’s Tax Code the 35th Most “Unfair”

Source: Insitute for

Source: Institute on Taxation and Economic Policy. (Click for larger image.)

On the subject of state and local taxes (see previous post), a 2015 report by the Institute on Taxation and Economic Policy says that Virginia has the 35th “most unfair” state and local tax system in the United States. By “unfair,” the Institute means regressive — poor households pay a larger share of their income in state and local taxes than do affluent households. As seen in the chart above, the lowest 20% the lowest-income families in Virginia pay 8.9% of their income, while the top 1% of richest families pay 5.1%.

Presumably, 35th most unfair is equivalent to the 16th most fair. In other words, despite the pro-business slant of Virginia’s tax code, it does not load as much of the burden on low-income citizens as the codes of other states.

I would expand the definition of what constitutes a “fair” tax code. The “fairest” tax code is that which does most to stimulate job creation. A weak labor market is the major explanation for the lack of wage growth in the United States. A tax regime that supports job creation, like that proposed by the Thomas Jefferson Institute for Public Policy, arguably would indirectly help wage growth, which would do far more to help the bottom 20% than tweaking the tax code to make it more progressive. A progressive tax code that inhibits job creation does no favors to the poor.

Update: I have re-written extensive portions of this post. In the original version, I had failed to comprehend that the 35th most “unfair” equated to 16th most “fair.” Thanks to reader “Slowlane” for pointing out the obvious. All I can say in defense of my carelessness is, “Duh!”


Purge the Algorithms

Ned Ludd

Ned Ludd

by James A. Bacon

It’s Labor Day, a suitable occasion for opining on the future of work…

One of the great questions of our era revolves around the impact of robotics and artificial intelligence on the job market. People have fretted about automation since the days of Ned Ludd, the knitting-frame wrecker. Machines have been replacing human labor on a large scale for more than two centuries now. Yet somehow the economy managed to generate more new jobs, and somehow our society has managed to become more productive and prosperous than ever.

Some say, this time it’s different. The nature of automation is changing.

My friend David Rafner refers me to an article in Space Daily describing how biophysicists are developing an algorithm for inferring laws of nature from time-series data of dynamical systems. The hope is that large-scale computing can spot patterns that elude mere mortals. If the biophysicists are successful, they will have made a huge advance toward Ray Kurzweil’s vision of the Singularity, in which computing power and AI exceed humans in intelligence, thus accelerating the rate of scientific discovery and the rate of technological development.

Machines first reduced the demand for physical labor; soon AI will reduce the demand for cognitive labor. Once those two sources of employment dry up, what’s left? While machines build the cars, plow the fields, manage the currency transactions and conduct the scientific research, what will humans do? Will we revert to a nation of artists, musicians, writers and craftsmen? Perhaps. David thinks there still will be room for philosophers and bloggers. But I’m not confident that the United States can accommodate 320 million philosophers and bloggers. Personally, I think the only occupational category that’s safe is politicians.

Work is so central to our culture — so essential to our standard of living, our status, our self-worth — one can’t help but fear will happen when the AI-enhanced robots take over. Who will control the wealth and power as robots (a form of capital) replace labor? Will the plutocrats rule? or will we distribute material blessings so that all of us are freed from drudgery and toil? And what would a life free from labor and toil be like? Would humans have any purpose? Would life have any meaning beyond the hedonistic pursuit of pleasure? Are we not destined for an existential crisis that will give rise to nihilism, thrill seeking and violence?

As much as I love my time away from paid toil, I see no substitute for work. Ned Ludd wrecked the knitting machines. Maybe it’s time to start purging the algorithms.

Pell Grants: Soaking Taxpayers and Creating Debt Slaves?

pell_loansby James A. Bacon

Earlier this month the Hechinger Report found that a large percentage of the beneficiaries of federal Pell grants to students from low-income families never graduate. The study also found that the federal government, despite spending $300 billion on the program since 2000, doesn’t keep track. The feds have doubled their commitment to the program since the 2007-2008 school year with absolutely no idea of what results they are getting.

Uncle Sam may be flying blind, but Virginia is not. The Commonwealth has been collecting the data for years and reports the results for every public and private university in the state, reports the VLDS (Virginia Longitudinal Data System newsletter. According to Tod Massa with the State Council for Higher Education for Virginia, “Virginia knows more about the success of students in all the Title IV financial aid programs, which are not ours, than the federal government does.”

Pell grants for low-income students provide awards of up to $5,775 per student. Graduation rates for Pell recipients in Virginia can be seen here.

For all first-time, full-time college students entering a Virginia institution in the 2001 school year, 60.3% graduated within five years compared to 43.4% for Pell recipients. The graduation rate varied widely between institutions, however. The more elite the institution, the higher the graduation rate. For instance the Pell graduation rate within five years at the University of Virginia was 85% for freshmen enrolled in 2001, while it was 20% at Norfolk State University. (View data for individual institutions here.)

The disparity in graduation rates raises the question of whether the program is inducing poor students to attend college when they have no business doing so, either because they are unprepared for college-level work or because they struggle to pay the tuition, fees, room and board. A nearly $6,000 grant covers about a third or fourth of what it costs to attend a public university in Virginia. It would be interesting to know how many Pell recipients end up taking out student loans. It would be even more interesting to know how many Pell recipients end up saddled with student debt without the degree credential that would help them pay it off.

Virginia has the data to undertake such an analysis. The fact that the U.S. Department of Education does not is just disgraceful. It’s not often that a government wealth-distribution scheme can both squander your tax dollars and propel thousands  of would-be beneficiaries into debt slavery.


Amherst Ordinance Violates Basic Human Right

ex-conby James A. Bacon

I have little sympathy for criminals. I don’t buy into the Officer Krupke school of thought that people “are depraved on account of they’re deprived.” And I’m all in favor in getting tough on crime. But I also believe that once a criminal has served his sentence , government policy should be geared to making it easier, not harder, for him to find a job and reintegrate into society.

Employers are understandably reluctant to hire ex-cons for certain types of jobs, with the consequence that many employment opportunities in government, health care, education and finance are off limits. For some felons, the only employment opportunity is creating one’s own job.

But now comes Amherst  County, enacting an ordinance in May, that allows the Commissioner of Revenue to “withdraw the privilege of doing business or exercising a trade, profession, occupation, vocation, calling or activity by revoking a business license” for anyone convicted of a felony or crime of moral turpitude.

As Eugene Volokh, a California law school professor observes, “This isn’t limited to particular job categories and particular criminal histories (e.g., barring people with child sex abuse records from working in day care centers, barring people with recent DUIs from driving trucks, and so on). If the Commissioner wishes, anyone with the specified kind of conviction could essentially be disqualified from pretty much any job in the County.”

“This sort of discretionary control over people’s lives is not how a free country should work,” writes Volokh.

I agree whole-heartedly. Indeed, I would go further. The idea expressed in the Amherst County ordinance that the right to self-employment is a “privilege” revocable by government is reprehensible in a free society. The ability to freely sell one’s labor and/or skills in the marketplace is, or should be, a foundational human right. I can’t imagine what the Amherst board supervisors were thinking when they enacted this ordinance, but they need to repeal it immediately. And if they don’t, some one needs to file a legal challenge. This is an embarrassment.

(Hat tip: Tim Wise)

Want Social Justice? Create Jobs.

Photo credit: Buz and Ned's

Photo credit: Buz and Ned’s

by James A. Bacon

I’m all in favor of people earning higher wages. I want to live in a society in which people make enough from their labors to live on without government assistance. I just don’t think that mandating a minimum wage is the way to go about it, for all the reasons that foes of the minimum wage usually cite that don’t bear repeating here. A better way to increase wages is to (a) increase the number of jobs in the economy, which would (b) give employees more options, which would (c) prompt employers to offer better wages, benefits and working conditions in order to hang onto their workforce. Crank up the jobs machine, and the wages, benefits and working conditions will follow.

This forehead-smackingly obvious formula can be seen at work in Richmond’s restaurant community. After years of sub-par economic growth following the Great Recession, competition for skilled restaurant employees in the Richmond region is finally heating up. And guess what’s happening — restaurateurs are raising wages.

Thus, we read in the Richmond Times-Dispatch today that Buz Grossberg, owner of Buz and Ned’s Real Barbecue restaurants, is bumping the starting pay to $12.50 per hour for regular employees and to $8 per hour for servers working for tips. That’s up from $8 and $6 an hour respectively.

Grossberg acted for reasons both idealistic and pragmatic. “This has been on my mind a long time, even before it became current politics,” he said. “It’s just gotten worse and worse. It’s gotten hard for people to repay their bills and see their family without working multiple jobs. … How do you attract people and keep people who can’t afford to feed their family? Pay them a living wage.”

But why did he act on his conscience now? Turns out that it’s getting harder finding and retaining talent, particularly kitchen workers, in Richmond’s increasingly competitive and crowded restaurant scene, according to other restaurateurs quoted in the article. Said Grossberg: “The people who would typically work [in the restaurant industry] are going other places.” Paying higher wages will bring them back in.

Bacon’s bottom line: It’s basic supply-and-demand economics. If the economy creates jobs at a faster rate, wages will rise faster. And how do we create more jobs? Once place to start would be to re-think some of the job-killing policies we’ve enacted over the past 15 years, starting with Sarbanes-Oxley, Dodd-Frank, the Affordable Care Act, EPA regulatory overreach, higher taxes, regulation of the Internet and dozens of other initiatives that collectively have gummed up the economy and slowed growth to a crawl.

Defenders of the current regulatory regime tend to blame mysterious “economic forces” beyond their control. I’m old enough to remember those who claimed the “stagflation” of the 1970s likewise was due to some mysterious change in the nature of the economy rather than the policies of Richard “We’re All Keynesians Now” Nixon and Jimmy “Gas Rationing” Carter. Then along came policies that killed inflation, deregulated major industry sectors, cut taxes and enacted and real government spending cuts, precipitating nearly two decades of job creation. The surge in jobs in the 1980s and 1990s made the minimum wage irrelevant in many parts of the country because businesses were so desperate for labor that they were paying more than the minimum already.

I do feel badly for anyone trying to make a living on the minimum wage. But the answer isn’t more of the same “social justice” economics that have created our moribund economy and depressed wages. The best social justice program in the world is a strong job-creating economy.

Cutting Virginians No Slack: Colleges and Universities


Data source: State Council of Higher Education in Virginia

by James A. Bacon

The rocket-like ascent of college tuition in Virginia continues unabated, with tuition and fees across the state’s higher ed system averaging six percent in the 2015-2016 academic year, according to a new State Council of Higher Education in Virginia (SCHEV) report. That compares to an inflation rate of less than 1.0% between 2015 and 2014 and it outpaces the meager gains in average household income.

Prime offenders: Virginia’s elite universities, the University of Virginia and the College of William & Mary, continuing to parlay their pricing power into higher tuition and fees at a remarkably aggressive rate.

As always, the universities turn to the excuse that state budget cuts made them do it. And, as the SCHEV report makes clear, the past year was a budgetary roller coaster and General Fund support for higher ed was cut by $45 million in each year of the biennium, for a total of 2.1%. But that accounts for only one percentage point of the 6% increase this year. Inflation accounts for another percentage point. That still leaves an unjustifiable increase of 4%.

Meanwhile, the indentured servitude of America’s college-educated youth, especially those whose parents aren’t affluent enough to foot the bill, continues apace. Student debt is accumulating as rapidly as the national debt, now exceeding $1.3 trillion.

If there is a consolation to this dismal news, according to WalletHub, one of the nation’s leading purveyors of listicles, Virginia students are less debt-ridden than the national average. Compiling metrics on the percentage of students with debt, the average size of that debt, debt as a percentage of income, post-college employment rates and delinquent loans, Virginia’s college students rank 6th best off in the country. That is a testimony to the fact that, relatively speaking, Virginia institutions of higher ed are less rapaciously exploitative  than their peers in other states. (Yes, that’s the sound of one hand clapping.)