Category Archives: Poverty & income gap

Community Colleges and the Opportunity Society

Increase in undergraduate, in-state tuition & fees between 2015-16 academic year and 2019-20 academic year. Data source: SCHEV

by James A. Bacon

What does it take to create an Opportunity Society? One critical element is providing Virginians with the skills they need to be employable in the occupations of the future. Nearly three out of five jobs created between now and 2026 will be “middle skill” jobs requiring community- or career-college training, not a four-year college degree. A majority of Virginians, therefore, will look to the Virginia Community College System (VCCS) for their ticket to the middle class.

Virginia’s community college system doesn’t get its due. The VCCS board is acutely aware of the affordability issue, and it has made it a priority to limit increases in tuition and fees. I thought it would be interesting to contrast the VCCS’s success in that regard to the runaway tuition-and-fees increases at Virginia’s public four-year residential colleges. I took the latest data from the State Council of Higher Education for Virginia (SCHEV) Tuition and Fees database to compare increases between the 2015-16 academic year and the current 2019-20 academic year.

You can see from the chart above that the community colleges have done a far superior job of keeping charges under control. Community colleges on average increased T&F only 8.1% over the four-year period compared to a range for the four-years of 10.1% for Virginia State University to 22% for the College of William & Mary. (Richard Bland, a two-year residential college is an extreme outlier.)

What accounts for the difference? Continue reading

Crash and Burn: How Misguided Policies Ruin Lives

by James A. Bacon

Give Richmond educators credit for brutal honesty. A presentation of the school system’s five-year plan surfaced some devastating data: Only one in ten Richmond high school students is ready for college and a career, according to College Board criteria. If it’s any comfort, that number is up from 9% in the 2017-18 school year.

“Finally we can demonstrate with empirical evidence that RPS has failed our students and our families and our city,” said Board member Jonathan Young, as quoted by the Richmond Times-Dispatch. That sentiment was echoed by Superintendent Jason Kamras. “It’s devastating. We, the adults, have failed our kids for years.”

Indeed, the educational system has not only failed Richmond’s predominantly African-American students, it has shepherded many young people into college programs from which they subsequently dropped out. Left unsaid in the analysis is that college drop-outs are typically saddled with thousands of dollars in student debt, which many cannot repay. In other words, the coupling of high expectations (every student has a right to attend college) with abysmal performance is ruining thousands of lives. Continue reading

Those Tenant-Eviction Stats Are Valid

by Marty Wegbreit

The August 15, 2019 post, “A Closer Look at Those Tenant-Eviction Stats,” fails to stand up to statistical or critical analysis. The post blames Virginia’s Independent City/County form of government for high eviction rates. (Five of the highest ten eviction rates in large U.S. cities over 100,000 population are in Virginia.) Virginia’s independent cities do not incorporate the wealthier suburbs. Supposedly, this artificially raises the eviction rate. No data are presented to support this theory.

When you examine cities of similar population, similar area, and similar percentage of African-American population, Richmond still stands out with a high eviction rate.

Richmond’s eviction rate is substantially greater than Jackson, Miss., and Baton Rouge, La. Something clearly is wrong in Richmond. The theory of cities that do not incorporate wealthier suburbs also fails when comparing Richmond to Chesapeake, an independent city more than 5½ times larger in area. Continue reading

Undercover Billionaire and the Opportunity Narrative

Billionaire sleeping in old pickup truck - Erie, Pa

Billionaire sleeping in old pickup truck, Erie PA

by Don Rippert

The show.  The Discovery Channel started airing a new series about a billionaire who goes to Erie, Pa with an old pickup truck, $100 and a cell phone with no contacts.  His goal is to build a business worth $1m in 90 days.  If he achieves the goal he will share ownership of the business with the employees.  If he fails he will finance the business with $1m of his own money.  This show strikes me as a laboratory experiment regarding Jim Bacon’s Opportunity Narrative. Continue reading

A Closer Look at those Tenant-Eviction Stats

Graphic credit: VPM

Virginia’s eviction-reform movement gained considerable momentum last year when the New York Times, citing data of the Princeton Eviction Lab, published a story asserting that four Virginia cities numbered in the top 10 cities with the highest eviction rates in the country. Richmond supposedly had an eviction rate five times the national average. Armed with this scandalous data, renters rights advocates pressed successfully for changes to state law that make it somewhat easier for tenants to avoid eviction.

Now a VPM (Virginia Public Media) investigation has revealed significant flaws in the data. The first problem is one that I identified shortly after the Times article was published: The reason Virginia cities stood out so prominently in the Top 10 list was not that Virginia laws are tougher on renters but because Virginia’s city/county form of government skewed the data.

A second problem is that Princeton Eviction Lab cobbled together different data sets for different states. The Lab was able to obtain court data directly from 12 states, including Virginia. For the others, they used data from private sources. Continue reading

Sorry, NYTimes, the South Is a Land of Opportunity

Perceived intergenerational mobility. Source: New York Times

Americans believe the United States is a land of opportunity, a country where people who work hard enough can get ahead. The faith in one’s ability to improve one’s economic circumstances is especially strong in the South. Ironically, contends Patricia Cohen with the New York Times, nowhere is the gap between perception and reality greater than in the South.

“For moving from the bottom of the income ladder to the top, the South offers the worst odds in the United States,” writes Cohen. “But it’s also the region where people are most optimistic about the prospects.”

(The gap between perception and reality is especially wide in Virginia, according to data presented in the article. Virginians estimated that 14.5% of Americans born into the bottom income quintile make it into the ranks of the top quintile as adults. The actual figure in Virginia is 6.3%.

The persistent belief in the U.S. as a land of opportunity has political implications, as Cohen observes. Liberals and progressive, who contend that the odds are stacked against ordinary Americans, argue that government intervention — from raising the minimum wage to providing free college for all — is needed to level the playing field. Conservatives, they suggest, over-estimate social mobility and under-estimate the need for palliative action. And evidence drummed up by Harvard researchers and presented in the NY Times article appears to back them up.

It will surprise no one to read that I believe the researchers who compiled the data framed their findings in such a way as to confirm pre-existing beliefs. Continue reading

Universities as Engines of Income Redistribution

The College of William & Mary: setting the standard for using tuition policy as an engine of income redistribution

An article in the Wall Street Journal today explains how middle-class American families are finding themselves swamped with debt. Consumer debt (not including mortgages) has climbed to $4 trillion, higher than it has ever been, even counting for inflation. The major sources of that debt: credit cards, car loans and… student loans, which now exceed $1.5 trillion.

Against this backdrop, the timing couldn’t be better for just-published book by James V. Koch, “The Impoverishment of the American College Student.” Steve Haner has written a broad overview of the book, but the volume contains such a wealth of research, much of which applies to Virginia higher-ed policy, that I feel compelled to go into greater detail.

The starting point of Koch’s work is that the cost of college attendance has been escalating far more rapidly than median American incomes. He acknowledges that there are many reasons why: administrative, bloat, mission creep, and lagging support from state governments, among others. In Chapter Five he examines a reason that gets little attention outside academic scholarship: how universities use tuition-setting as an engine of wealth redistribution from wealthy families to poorer families, and how they take a rake-off to fund their own priorities. Continue reading

An Education Where Students Have Skin in the Game

Photo credit: Richmond Times-Dispatch

The Cristo Rey Network, a chain of Catholic schools, has enrolled its first class of 105 students on the former campus of Benedictine High School in Richmond, creating an affordable private-school alternative for dozens of low-income black and Hispanic youth.

What makes Cristo Rey unique is the degree to which students and their families put skin in the game. To cover 60% of their $13,000-a-year tuition, students work one day per week in the Corporate Work Study Program, in which four students share a full-time, entry-level job with companies such as Dominion Energy, CoStar Group and Bon Secours. Local philanthropists cover 30% to 35% of the tuition, while families are expected to contribute between $20 and $40 a month.

The program helps students focus in the classroom because they have to work for their education, says Kathleen Powers, a Cristo Rey teacher told the Richmond Times-Dispatch. “This is their investment.” Continue reading

The Most Cost-Effective Anti-Poverty Program Known to Man: Contraception

Back to exploring “root causes” of poverty… This chart shows vividly how poverty is a demography-driven phenomenon. Poor people have more children than the not-poor do, and they have children at a younger age. The consequence of this “disparity” in fertility rates is that the percentage of children raised in poverty is vastly higher than the percentage of poor people in the population as a whole. Even as thousands of Virginians succeed in lifting themselves out of poverty, the reservoir of poor people is continually replenished. Continue reading

Teen Births and Violent Crime — a Weak Connection

I’ll be the first to admit, giving me an Excel spreadsheet is the intellectual equivalent of handing a chimp a machine gun. What I don’t know about statistics would, well… it would fill a statistics textbook. But I abuse statistics less than most journalists, commentators, and politicians, who, to paraphrase renowned economist Ronald H. Coase, routinely torture the data until it confesses. I count on readers to call B.S. when they see it and modify my findings accordingly. In the spirit of exploration and with all due humility, I present the following:

In a previous post, I disputed the conventional wisdom that “poverty” is a “root cause” of violent crime. The lack of income and material resources is undoubtedly a contributing factor, playing into feedback loops of tremendous complexity, but overall the correlation between the poverty rate and the crime rate across Virginia’s 100+ localities is weak — an R² of .1802, which is considered a small effect size. There is a much stronger correlation — an R² of .4007 across Virginia localities, a moderate effect size — between the percentage of single-parent households and violent crime.

If the percentage of single-family households in a population has a moderate influence on crime, I wondered about the percentage of teen births. Continue reading

Thousands of Virginians Getting their Licenses Reinstated

Angela Battle: one of thousands of Virginians to have their license restored. Photo credit: Richmond Times-Dispatch.

Some 37,700 Virginians who couldn’t drive yesterday can drive today, thanks to a budget amendment to Virginia’s Fiscal 2020 budget, reports the Richmond Times-Dispatch. More than 600,000 drivers have suspended licenses because a failure to pay court fines and costs, creating a Catch 22 situation for thousands: People can’t repay their fines if they can’t drive to work, and they can’t drive to work if they can’t repay their fines. The Department of Motor Vehicles will contact other Virginians with suspended licenses to inform them how to get their licenses back.

Randy Rollins, president of the Drive-to-Work nonprofit that helps people get their drivers licenses reinstated, has tried unsuccessfully for the past 10 years to get the law changed, but Governor Ralph Northam was able to enact the new policy, for a year at least, by means of a budget amendment. Continue reading

Pious Platitudes about Poverty and Crime

The City of Petersburg has the highest homicide rate in Virginia, with 53.5 killings per 100,000 residents since 2013 — exceeding Virginia’s other homicide hot spots of Danville, Hopewell, Richmond, and Portsmouth. So reported the Richmond Times-Dispatch in a recent article.

In talking to the RTD, Petersburg Police Chief Kenneth Miller was reluctant to blame the violence on the city’s socioeconomic challenges. “I was raised poor and I’m police chief now,” he said. “I can’t give in and say, well, because we’re poor we can’t [behave in a more acceptable way]. I think poor people want good policing and they want [public safety] just as much as anybody does.”

Nevertheless, states the RTD, Petersburg police must contend with a litany of social ills. Twenty-seven percent of the population is in poverty, and more than half the population is enrolled in Medicaid. Median household income was less than half the state average. The graduation rate was the ninth worse in the state last year.

It is the conventional wisdom in the United States today — a belief that permeates the political establishment, journalists, and the pundit class — that poverty is a “root cause” of violence. The correlation between poverty and violent crime is so widely accepted that it needs no justification or empirical support. But is the connection as strong as the chattering class thinks it is? Continue reading

Unpaid Bills, Debt Collection, and Hospital Profits

Carlos Ortiz. Photo credit: Wall Street Journal

Carlos Ortiz underwent tests last year at Mary Washington Hospital in Fredericksburg for dizziness stemming from an inner-ear problem. When the 65-year-old uninsured gardener couldn’t pay his $15,000 bill, the nonprofit institution took him to court. Mary Washington was suing so many patients that day that the circuit court had cleared the docket to hear all the cases.

As it turns out nonprofit hospitals are more likely than for-profit hospitals to garnish patients’ wages to collect their bills, according to a study of Virginia hospitals published Tuesday in the Journal of the American Medical Association and reported upon by the Wall Street Journal. In 2017 Virginia nonprofits filed 20,000 lawsuits against patients for unpaid debt.

Remarkably, the study found, nonprofits are more likely than for-profits to file lawsuits against patients for unpaid debt. These numbers do raise fundamental questions about Virginia’s social compact with its nonprofit hospitals. But hasty judgments are not in order. Continue reading

How Crime-Prone Students Worsen Educational Outcomes for Everyone

Exposure to crime-prone students in school has “large and significant” effects on test scores, school discipline and even adult criminal behavior, finds a new study by Stephen B. Billings and Mark Hoekstra published by the National Bureau of Economic Research. Exposure to crime-prone peers in the same neighborhood also has an effect, but the negative influence is far stronger in the school setting.

“We estimate that a five percentage point increase in school and neighborhood crime-prone peers increases arrest rates at age 19-21 by 6.5 and 2.6 percent respectively,” state the authors in “Schools Neighborhoods, and the Long-Run Effect of Crime-Prone Peers.” 

Billings and Hoekstra stick to the narrow issue of establishing the correlation between “crime-prone peers” and students’ cognitive and behavioral outcomes, but the study is sure to influence the debate over school disciplinary policies. If students displaying anti-social behavior are kept in school as part of the therapeutic disciplinary regime now in vogue, one can predict negative spillover effects on fellow students.
Continue reading

A Nonprofit Insider’s View on Child Nutrition

Last week I asked the question how, given our nation’s’ extensive social safety net, it is possible that children in Virginia go hungry and suffer from malnutrition. Are government support payments deficient? Are food deserts to blame? Do people squander their Supplemental Nutrition Assistance Program (SNAP) stipends? Is something else going on? The explanations we hear from the usual sources don’t seem to add up.

That piece triggered a response from Robin Mathews, who worked with recipients of SNAP and WIC programs as an employee in the nonprofit sector for several years. “I feel like I’ve seen just about all,” she says. Here are key points she makes in response to specific questions I raised in the post. (I have reproduced her comments here with light editing.)

Eligibility for SNAP. Unemployment rates are low but the income guidelines are stringent; a single parent with two children working full time at Amazon earning $15 an hour would not qualify for SNAP or WIC so these programs may be intended to supplement the “working poor” families.

Could single mothers’ budgets be stretched by live-in boyfriends who don’t qualify for food stamps? Of course, but what I see more often in public and subsidized housing is the “live in” who is not always a boyfriend but a “boarder” who has income (sometimes from selling drugs and guns) to pay for items not covered by SNAP and contributes this in exchange for the room and board/food he receives from the recipient who is eligible. Continue reading