Category Archives: Poverty & income gap

How to Empower Low-Income Communities in Virginia

Public housing project in Richmond.

by Stephen Jordan

There is no one-size-fits-all when it comes to describing poverty in Virginia. Portsmouth, aka “Pistol City”, population 93,000, is six hours away from Galax, population 6,000. The housing projects of east and south Richmond are very different from the hollowed out small towns that dot Southside and coal country. Both urban and rural decay are powder kegs waiting to blow, but no one has seriously tackled them in Virginia politics for decades because the issues are so complex.

Conservatives are complicit in this problem because for too long they have allowed liberals to frame the debate and set policy. The result is that since 1964, more than 1,500 “low income apartment communities” have sprung up around the Commonwealth. They are hotbeds of drug abuse and violent crime. Rural Virginia has some of the largest concentrations of people over the age of 65, in part because young people can’t find enough good paying jobs. Democratic mayors, Democratic governors, and Democratic federal policy have predominantly shaped the current state of Virginia’s communities. It is a disgrace.

To start to develop solutions, we have to evaluate the roots of the problem. One of the things that you will notice walking around many housing projects is how isolated and in some cases, empty of outdoor life they are. They are badly designed, set away from services, and with no mixed-use opportunities for jobs close to home. If you can interview some of the residents and get to the point that they trust you, they’ll tell you there is nothing to do but sell some weed, play ball, and wait for something to change. Continue reading

Kings Dominion Stays a Step Ahead of the Minimum Wage

Bridgett Bywater, the new GM at Kings Dominion.

by James A. Bacon

Virginia’s $9.50-per-hour minimum wage will go into effect May 1, but it won’t have much impact on King’s Dominion, which expects to hire more than 2,000 seasonal workers, mostly young people, this season. The Hanover County amusement park plans to boost its minimum wage to $13 per hour, reports Virginia Business. The enterprise also is hiring 80 new full-time positions with wages and benefits starting at $16 an hour in culinary and operations roles.

Hopefully, the flap over the minimum wage in Virginia will prove to be much ado about nothing, as market forces in a fast-recovering economy push up wages faster than the General Assembly can jack up the minimum. In 2017, according to the Bureau of Labor Statistics, 70,000 of Virginia’s 1,978,000 workers were paid the $7.50 minimum wage. Presumably, a significant number more were paid less than $9.50 and will benefit from the wage increase. That’s the up-side of the mandated wage boost.

What we don’t know is how many workers will lose their jobs as employers decide they don’t add enough value to the enterprise to justify the higher wage, or, in the longer run, invest in automation. Bacon’s Rebellion will stay alert for signs of how the minimum is impacting “marginalized” employees, such as minorities, teenagers, and rural workers. Continue reading

Virginia Will Mandate and Hold Retirement Savings

Click here for more information on the California state-run retirement fund that inspired the Virginia legislation. Source:  Georgetown Center for Retirement Incentives.

by Steve Haner

Next week’s reconvened General Assembly session will decide whether only full time employees of Virginia’s small businesses will be pushed into a new state-sponsored retirement savings plan, or part-time workers will join them there.

The big question is whether this is something the state should be doing at all, but on that the Assembly has spoken. People who are not covered by an employer-sponsored retirement plan will be forced to send money to a state “Virginia Saves” account unless they take explicit steps to opt out.

Governor Ralph Northam’s amendment to expand House Bill 2174 will be voted on by legislators at the reconvened session April 7 and must be approved by both chambers. If rejected, he could then veto the bill, but that seems unlikely. More likely is that efforts to expand the program will continue in future sessions, as the sapling grows into a mighty oak.

The bill as introduced in the House of Delegates covered all workers but passed the Senate limited to employees with 30 or more hours per week. Increasing coverage to part-time employees greatly expands the pool of covered workers. It also greatly expands the pool of covered businesses, since to be drawn into the state-managed retirement mandate they need 25 eligible employees.  Continue reading

Roving Bands of Whites Steal COVID Shots?

Shocking News: People afraid of death will drive to get vaccines!

by Steve Haner

Call out the militia!  Roving bands of white people are rushing to Danville to steal COVID vaccines from more deserving blacks and Latinos!  That’s the big news according to the Richmond Times-Dispatch, although it lacks the courage to write that headline directly.

The story dominates the print front page and the on-line paper, complete with a map (above) showing the distances these despicable Privilege Recipients are willing to drive to avoid hospitalization or death from a disease which everybody who reads the paper knows is only truly dangerous for People of Color.  Continue reading

More Unintended Consequences: Shutdowns, Alcohol, and Domestic Violence

The good news… Rapidly declining COVID-19 cases in Virginia

by James A. Bacon

As the number of COVID-19 vaccinations administered in Virginia passes the two million mark, new COVID-19 cases in Virginia are falling off rapidly. We can look forward to the day when fear of the virus will be a distant memory. But the damage wrought by the virus — or, to be more accurate, wrought by the lockdowns prompted by the virus — will linger with us for years. Perhaps for  lifetimes.

The impact on young children, compelled to learn in an online environment for which they are ill suited, has been well documented. A distressingly high percentage of students, consisting disproportionately of lower-income minorities, has fallen significantly behind academically. Whether they ever catch up is anybody’s guess. But sociologists already are speculating about the long-term cost of lower educational achievement as reflected by higher dropout rates, increased criminality, lost employment, and lower lifetime wages.

There may be an even more insidious, more damaging effect of the lockdowns: increased domestic violence and childhood trauma. Continue reading

Podcast: How the General Assembly Has Changed

By Peter Galuszka

I haven’t contributed much to BR lately since I am slammed with non-Virginia work. I did manage to help out on a Podcast about how the General Assembly has changed the state over the last two years as Democrats have gained power.

This Podcast is produced by WTJU, the University of Virginia radio station. I do a weekly talk show on state politics and economics and, on occasion, work on Podcasts.

Joining me is Sally Hudson, a delegate from the Charlottesville area. She is Assistant Professor of Public Policy, Education and Economics. Sally studied at the Massachusetts Institute of Technology and Stanford and is one of the youngest members of the General Assembly.

I hope you enjoy it.

Mark Herring: Friend of the Poor, Scourge of Lenders

Mark Herring

by James A. Bacon

Attorney General Mark Herring is at it again — acting to protect the poor by government fiat without regard to unintended consequences.

In a press release release today, Herring claims credit for backing a law backed by Del. Hala Ayala, D-Woodbridge, that will ensure that federal COVID-relief payments don’t “get swept up by debt collectors and creditors.” The law exempts the first $1,200 of any COVID-relief payment from garnishment.

“The most recent round of federal payments represents a lifeline for so many Virginia families who are still struggling to make ends meet because of the economic impacts of the COVID pandemic,” said Herring. “Virginians should not have to worry about creditors or debt collectors taking all of their much-needed stimulus money and I’m glad Delegate Ayala and I were able to work together to get this important legislation passed.” Continue reading

Exploitation and Privilege at VCU

VCU adjuncts protesting for fair pay. Credit: VPM News

by James A. Bacon

Bacon’s Rebellion has devoted considerable digital ink over the years to explaining how Virginia’s higher-ed institutions exploit its students through unconscionably high tuition and fees. But it is useful to remind ourselves that colleges and universities are rigidly hierarchical and exploit the knowledge workers at the bottom of that hierarchy as well.

Adjunct professors at Virginia Commonwealth University protested outside the office of President Michael Rao the other day, demanding better pay and benefits. Currently, an adjunct with a full teaching load makes about $20,000 a year, or about $1,000 per credit. They’re asking for $3,000 per credit.

“We want a raise to our base pay, which is currently low enough that an adjunct can work full-time and be below the poverty line,” said Rose Szabo, a member of VCU Adjuncts Organizing for Fair Pay in an interview with Virginia Public Media. Full-time-equivalent adjunct faculty don’t even get health benefits. Continue reading

VUU Gambles on Recruiting Hispanic Students

VUU President Hakim j. Lucas

by James A. Bacon

Although the appeal of Virginia’s Historically Black Colleges and Universities (HBCUs) has been limited mainly to African-Americans, Richmond-based Virginia Union University, founded in 1865 to educate former slaves, is making a major push to recruit Hispanic students.

VUU President Hakim J. Lucas wants the student body to be 25% Hispanic within three years, reports the Richmond Free Press. If it is successful, it would become the first HBCU in the country to earn a federal designation as an “Hispanic-serving institution.” It would be the second such institution in Virginia, following Marymount University in Arlington.

HBCUs face an existential threat from other colleges and universities which are intensifying efforts to recruit minority students, often offering financial aid that less affluent HBCUs are hard-pressed to compete with. But Lucas thinks Virginia Union can make inroads with Hispanics because of their commonality with African-Americans as oppressed minorities. Reports the Free Press: Continue reading

You Thought Payday Lenders Were Bad? Welcome to Internet Lending.

by James A. Bacon

A new law that went into effect this year is designed to protect Virginians against “predatory” short-term loans by limiting what lenders can charge. And in honor of National Consumer Protection Week, Attorney General Mark R. Herring is encouraging Virginians to familiarize themselves with the risks associated with smaller-dollar loans.

I’m all in favor of educating consumers, and I’m glad to see that the AG’s office is vigilant against fraudulent lending. But I can’t escape the worry that the political class’s do-gooder instinct to “help” poor people by regulating one of the few industry sectors willing to lend them money may do them more harm than good. Regulating payday lenders pushes poor people into the arms of online lenders.

In a press release today, the AG’s Office reported some interesting numbers regarding the scope of payday lending. Citing data from the 2019 Annual Report of the Bureau of Financial Institutions, the press release notes that 83,107 Virginians took out 268,097 payday loans totaling nearly $110 million with an average annual percentage rate of 253%. Continue reading

Politicians Get the Gold Mine, the Middle Class Gets the Shaft

by James A. Bacon

Thousands have Virginians have fallen behind on their electric bill payments as they struggle through the COVID-19 epidemic. The General Assembly wants to help. So, in the budget compromise reached by the House of Delegates and the state Senate, Dominion Energy will be directed to forgive customers’ unpaid balances that were more than 30 days in arrears as of Dec. 31, 2020.

Who will pay for this? Not the Commonwealth of Virginia. The state may be awash in $2.4 billion in federal COVID relief funds plus $410 million in tax revenue over forecasts this year, but, no, legislators want to spend every dime.

And not Dominion Energy. The budget bill reaffirms the utility’s right to use the bill-forgiveness costs to offset earnings from 2017 to 2020 in the State Corporation Commission’s next review of its profits, reports The Virginia Mercury.

You, dear ratepayer, will pay the cost (unless you’re one of those who have fallen behind in your payments). With apologies to Jerry Reed, the politicians get the gold mine, and Virginia’s middle class gets the shaft. Continue reading

Updates: PPP, PIPP, Dominion’s School Buses

by Steve Haner

Tax on Paycheck Protection Program Grants

The General Assembly session deadlines require final decisions on various revenue bills before the final budget bill is adopted, in theory keeping the two issues separate. What is good tax policy should not be driven by the need or greed of the appropriators.  Continue reading

Your PIPP Tax Will Buy Heat Pumps For Poor

by Steve Haner

Lower-income Virginians who are customers of the two largest electricity providers may begin to receive subsidies on their residential bills in March 2022 under legislation moving forward in the General Assembly. The money for the subsidies will come from their fellow customers.  Continue reading

In Praise of Trailer Parks

Bermuda Estates, Chesterfield County

by James A. Bacon

Nobody knows for sure how many trailer parks there are in Virginia, and Del. Paul Krizek, D-Fairfax, wants to find answers. He has introduced a budget amendment to establish a Virginia Manufactured Home Park registry, to be funded with a $100 database maintenance fee from each mobile home park. 

Krizek regards trailer parks as a rare form of affordable housing in the state, and he’s concerned that market forces could put them out of business. Many were built long ago on land that was inexpensive at the time but due to the evolution of real estate markets has become desirable.

“The biggest problem is that the land is so valuable,” Krizek told The Virginia Mercury. “These parks are a gold mine for someone who wants to come in and build a 20-story apartment complex. I understand the need for density, but it’s sad when one of these communities goes away because they have been there for 20-30 years.” Continue reading

McAuliffe’s “Big Bold” Housing Plan Is Neither

Richmond homelessness. Credit: Richmond Times-Dispatch

by James A. Bacon

Homelessness spiked in the Richmond area over the past year — more than 50%, reports the Richmond Times-Dispatch. The increase from 549 to 838 people in 2020 was the largest single-year jump since anyone began tracking the number in the 1990s. Given the fact that hundreds of thousands of Virginians are at risk of eviction, homelessness likely will get much worse before it gets better.

Clearly, Virginia has a social crisis on its hands. The burning question is what to do about it. Do we treat the symptoms? Do we enact remedies that backfire and make things worse? Or do we address underlying problems?

We can get a glimpse of Virginia’s likely course of action by scrutinizing the plan to tackle the commonwealth’s housing crisis proffered by gubernatorial candidate Terry McAuliffe. Dominating the field of Democratic Party candidates, the former governor is the odds-on favorite to win the party nomination. Facing the survivor of the Republicans’ circular firing squad, that makes him the odds-on favorite to become Virginia’s next governor.

McAuliffe announced he has a plan — a “big bold” plan — in a Feb. 8 press release. In McAuliffe’s assessment, more than 260,000 Virginia households face the risk of eviction in the fall. Continue reading