Economics

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The consequence of sexism

I’m writing this the morning after the Republicans in the Senate passed a massive tax reform bill that I doubt many of them, or their staff members, or maybe even leadership had read.  The bill wasn’t even printed but evidently photocopies with handwritten insertions and changes were passed out in the hours just before the vote.  There were no hearings.  And now we get to watch Paul Ryan and Mitch McConnell try to reconcile the House and Senate bills.  I wish them no success.

So how is this bill a consequence of sexism?  I hadn’t thought about it either until I read this piece by Jill Filipovic in the New York Times.  She writes

Many of the male journalists who stand accused of sexual harassment were on the forefront of covering the presidential race between Hillary Clinton and Donald Trump. Matt Lauer interviewed Mrs. Clinton and Mr. Trump in an official “commander-in-chief forum” for NBC. He notoriously peppered and interrupted Mrs. Clinton with cold, aggressive, condescending questions hyper-focused on her emails, only to pitch softballs at Mr. Trump and treat him with gentle collegiality a half-hour later. Mark Halperin and Charlie Rose set much of the televised political discourse on the race, interviewing other pundits, opining themselves and obsessing over the electoral play-by-play. Mr. Rose, after the election, took a tone similar to Mr. Lauer’s with Mrs. Clinton — talking down to her, interrupting her, portraying her as untrustworthy. Mr. Halperin was a harsh critic of Mrs. Clinton, painting her as ruthless and corrupt, while going surprisingly easy on Mr. Trump. The reporter Glenn Thrush, currently on leave from The New York Times because of sexual harassment allegations, covered Mrs. Clinton’s 2008 campaign when he was at Newsday and continued to write about her over the next eight years for Politico.

A pervasive theme of all of these men’s coverage of Mrs. Clinton was that she was dishonest and unlikable. These recent harassment allegations suggest that perhaps the problem wasn’t that Mrs. Clinton was untruthful or inherently hard to connect with, but that these particular men hold deep biases against women who seek power instead of sticking to acquiescent sex-object status.

What these journalists did when they interviewed Mrs. Clinton has the same roots as their sexual harassment.

For arguing that gender shaped the election narrative and its result, feminists have been pooh-poohed, simultaneously told that it was Clinton, not her gender, that was the problem and that her female supporters were voting with their vaginas instead of their brains.

The latest harassment and assault allegations complicate that account and suggest that perhaps many of the high-profile media men covering Mrs. Clinton and Mr. Trump were the ones leading with their genitals. Mr. Trump was notoriously accused of multiple acts of sexual harassment and assault, and was caught on tape bragging about his proclivity for grabbing women. That several of the men covering the race — shaping the way American voters understood the candidates and what was at stake — were apparently behaving in similarly appalling ways off-camera calls into question not just their objectivity but also their ability to cover the story with the seriousness and urgency it demanded.

Filipovic continues

This moment isn’t about a nation of confused men. It’s about a minority of men who choose to treat women alternately as walking sex objects or bothersome and potentially devious nags. It’s about a majority of Americans who give men a pass for all manner of bad behavior, because they assume men are entitled to behave badly but hold women to an entirely different standard.

That is why it’s so egregious that sexual harassers set the tone of much of the coverage of the woman who hoped to be the first female president.

There are at least two other well known men accused of sexual harassment:  Senator Al Franken and Garrison Keillor.  It is true that both supported Clinton.  Both are alleged to have committed an act or acts that, while harassment, are rather on a different scale than Matt Lauer’s or Charlie Rose’s multiple actions.  I taught my first workshops about sexual harassment in the late 1970s to managers in Virginia state government and my staff began investigating complaints.  The manager who put his hand down an employee’s blouse was suspended; the manager who patted an employee on the rear was reprimanded.  No act can be excused, but we need to maintain some perspective.

As Filipovic writes

The 2016 presidential race was so close that any of a half-dozen factors surely influenced the outcome: James Comey, racial politics, Clinton family baggage, the contentious Democratic primary, third-party spoilers, Russian interference, fake news. But when one of the best-qualified candidates for the presidency in American history and the first woman to get close to the Oval Office loses to an opponent who had not dedicated a nanosecond of his life to public service and ran a blatantly misogynist campaign, it’s hard to conclude that gender didn’t play a role.

 And what we get is a tax reform bill that will only help the rich, destruction of the environment, alienated allies, and potential nuclear war.  Thanks a lot, fellows.

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Woman power is the future

A lot of people predicted that women were going to change America’s political history in January of 2017. But pretty much no one anticipated that they’d be doing it as leaders of the resistance. On Saturday, millions of women and men — organized largely by young women of color — staged the largest one-day demonstration in political history, a show of international solidarity that let the world know that women will be heading up the opposition to Donald Trump and the white patriarchal order he represents. Women — and again, especially women of color, always progressivism’s most reliable and least recognized warriors, the women who did the most to stop the rise of Trump — were the ones taking progressive politics into the future.

So begins the best article I’ve seen yet on the Women’s March:  The Future of the Left is Female.   Written by Rebecca Traister for NYMag.com it is a shrewd analysis of the march, the organizers, and, of the future.  It is fairly long, but I encourage people to read the entire thing because my quotations and comments can’t come close to doing it justice.

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National co-chairs of the march Carmen Perez, Linda Sarsour, and Tamika D. Mallory at the Women’s March in Washington, D.C.

Plenty of factors made this effort so successful, but perhaps the biggest was the shock and horror that jolted portions of a long-complacent population awake after the election of Donald Trump. As it turns out, sometimes, It Takes a Villain. We’ve got one now; he lives in the White House, has the nuclear codes, and spent Saturday defending the size of his, er, inauguration crowds. In his first weeks in office, he might very well nominate an anti-choice Supreme Court nominee, begin deportations, repeal health-care reform, start the process of withdrawing from the Paris climate accord, and defund Planned Parenthood. He has already reinstated the Global Gag Rule.

I’ve been asked many times “But why didn’t you vote?”  Traister’s response

Clearly, the vast majority of Saturday’s crowd had been Hillary Clinton supporters, at the very least in the general election if not in the primary. But it is also true that some of the apathy, some of the complacency, that many critics took as a reflection of Clinton’s “flawed” candidacy stemmed instead from the sense that Americans didn’t really need to panic or take to the streets on her behalf because she was going to win. She was going to win, the assumption went, because of course we are evolved enough that this guy could never get elected president and thus we were free to focus on the imperfections of the woman who was going to be the president.

I admit that I was not an enthusiastic Clinton supporter and spent my energy on local races including Sue Minter who ran for, and lost, the race for Vermont governor.  But I voted and voted for Clinton and was among the many who were stunned at the outcome of the Presidential election.  The question now becomes where to go from here.

But there was a new metaphysical approach at work on Saturday, largely thanks to the organizing and leadership of nonwhite women: the revolutionary sense that the new women’s movement will be about pulling in issues of criminal justice, environmental activism, immigration reform, and systemic racism. Women, with women of color at front and center, can be the engines of new progressive activism in all arenas. It’s a rebuke to the theory floated by some on the left that there is a disjunction between “identity politics” and politics, a rebuke to those who suggested in the wake of Trump’s electoral win that the future lies in moving away from divisive “social issues” and identity-framed movements and back to economic policies.

What this event did, on the most massive scale we have seen in this country, is reaffirm what has always been true: The impact of identity bias has always been economic, and economic issues have always most powerfully disadvantaged those who experience identity bias. Or to put it another way: Women’s rights are human rights.

That sentence: “The impact of identity bias has always been economic, and economic issues have always most powerfully disadvantaged those who experience identity bias” was at the heart, I think, of Bernie Sanders campaign.  Bernie, however, was – let’s be honest – an old white man – and while he began to frame the issue, he could not organize people of color and women who wanted desperately to elect a woman President.

The oil pipelines, the Flint water crisis, pay inequity, low minimum wages, the lack of adequate child care, etc., etc. are in the end economic issues and, they impact women disproportionately.

We can take hope from who marched.

If there was an over-representation of “nice white ladies” marching, it’s important to note that those white women were showing up for a march led by nonwhite women, in support of a radical and intersectional set of policy principles laid out by nonwhite women, carrying signs and marching in solidarity with plenty of women’s issues that do not center on white women. No, we shouldn’t give them too much credit for showing up where they should have been for years. And yes, the next steps must include white women (and men) showing up for women of color in other ways, at other demonstrations and with other actions (including not voting with an eye to their own privilege).

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Perhaps most surprising of all, men showed up alongside the women to fight for those rights. Many reports had the New York march at about half men, though some of that could perhaps be explained by the number of New York women who went to Washington alone, leaving kids behind with male partners. But those men — including my husband, including my male friends — brought those kids, girls and boys, to the march for women’s rights in New York. Men were at all the demonstrations in great numbers.

I’ve been in the women’s movement for a long time, so long that I was a delegate from Virginia to the First Women’s Conference in Houston in 1977.  I look at the poster hanging in my study every day.  I have watched the movement come together, fracture over what issues are important, fracture over race, and come together again.  The January 21 marches are the beginning of another start.  This time WILL be different, I can feel it.

But even if the necessary power realignment within feminism takes time, this historic event will have been a tremendous step toward the reimagining of a women’s movement as a web of varied but interconnected interests and missions.

And as it happens, when it happens, women will be leading the way into the progressive future.  Women will lead the revolution.

Photograph: Noam Galai/WireImage

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Senate in a hurry

The Senate, that body that couldn’t seem to muster enough energy to do very much since 2010 except hold endless hearings about Hillary Clinton, has suddenly gotten busy.  Last night – or rather early this morning – they took the first steps toward repealing the Affordable Care Act.  The New York Times reporters wrote

The approval of the budget blueprint, coming even before President-elect Donald J. Trump is inaugurated, shows the speed with which Republican leaders are moving to fulfill their promise to repeal President Obama’s signature domestic policy achievement — a goal they believe can now be accomplished after Mr. Trump’s election.

The action by the Senate is essentially procedural, setting the stage for a special kind of legislation called a reconciliation bill. Such a bill can be used to repeal significant parts of the health law and, critically, is immune from being filibustered. Congress appears to be at least weeks away from voting on legislation repealing the law.

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Senate Minority Leader Sen. Charles E. Schumer (D-N.Y.) is leading the charge to make Hill Republicans own the Obamacare repeal process.

The Democrats staged a protest on the floor, taking turns speaking even while being ruled out of order.  The vote was 51 to 48.  So, what can someone who is opposed to repeal do at this point?  I found a New York Times Op-Ed Seven Questions About Health Reform to be a useful guide to the questions we should be asking any Senator or Congressperson who supports repeal.  The piece by Harold Pollack and Timothy S. Jost should be read in full, but here are what I think are the most important of the seven questions. (The numbering is mine not theirs. And they are not in the order of importance.}

First, “How many millions of Americans will lose coverage?”  Among the issues pointed out is

Proposals by Tom Price, Mr. Trump’s choice to run Health and Human Services, and by the House speaker, Paul D. Ryan, would repeal the expansion of Medicaid and replace the A.C.A.’s income-based subsidies with less generous tax credits. Another plan from the House Republican Study Committee would offer deductions. We particularly need to know how this would affect low-income Americans, to whom tax deductions are nearly worthless, and who would generally not be able to afford coverage under these plans.

Second, “Will people over 55 pay higher health premiums for the same coverage?”  If the repeal is paired with cuts to Medicare, all of us over 55 will be in trouble.  And younger folks who may not have saved much for retirement yet will find it impossible to save enough.

Third, “… how much more will those with costly illnesses or injuries have to pay in out-of-pocket costs?”

Critics of the A.C.A. often argue that the law has made health care unaffordable. But many Americans would pay much more without it. The A.C.A. capped out-of-pocket spending at $7,150 for individuals and $14,300 for families for 2017. Republican proposals appear to offer no protection from high deductibles and other cost-sharing.

This could be devastating to millions, including older Americans who often develop chronic illnesses.

Fourth on my list. “Will the new plan let insurers charge women higher premiums than men while offering them less coverage?”

Before the A.C.A. banned gender-based premiums, insurers in many states charged women more than men of the same age — some as much as 50 percent more. The A.C.A. also required all insurers to cover preventive health services without co-payments; for women, this includes birth control, Pap smears, mammograms and a host of other crucial services. Maternity care is fully covered as well. Republican replacement plans offer no such protection. And many Republicans want to defund Planned Parenthood, too, which would deprive women not just of coverage but also of care.

And, as we have learned, many men, particularly Republican men, have no idea of how a woman’s anatomy works.  For those opposed to choice on abortion, this could have the effect of increasing the number of abortions – legal and illegal.

I think there is time while President Trump argues with Congress and Congress argues with itself about what should be in any new law.  If your Senator and/or Congressperson favors repeal, call or write or visit and ask some of the seven questions.  And express your support for those that oppose wholesale repeal.  Should you agree with what is happening, leave me a message explaining why you think this is OK.

Photograph:  Alex Wong/Getty Images

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Thoughts and questions about reparations

You have to admire Ta-Nehisi Coates for his persistence is getting the discussion started.  In 2014, Coates wrote a long piece in the Atlantic Magazine titled “The Case for Reparations”.  He generated a lot of buzz back then and we are still talking about it almost two years later.  If you haven’t read it, you probably should if you have any interest in race in America.

My parents were incarcerated into “relocation” camps during World War II because of their race.

In 1988, President Reagan signed the Civil Liberties Act to compensate more than 100,000 people of Japanese descent who were incarcerated in internment camps during World War II. The legislation offered a formal apology and paid out $20,000 in compensation to each surviving victim. The law won congressional approval only after a decade-long campaign by the Japanese-American community.

Reparations were easily determined in this instance.  There was a list of everyone who was in a camp regardless of age.  Those who had died in the meanwhile got nothing and their estates and heirs got nothing.  My parents, uncles, and aunts got checks.  But the money was not enough to cover what had been lost, but was more of a token giving the apology some weight.

Coates has recently taken Vermont Senator and Presidential candidate Bernie Sanders to task for not supporting reparations.

What candidates name themselves is generally believed to be important. Many Sanders supporters, for instance, correctly point out that Clinton handprints are all over America’s sprawling carceral state. I agree with them and have said so at length. Voters, and black voters particularly, should never forget that Bill Clinton passed arguably the most immoral “anti-crime” bill in American history, and that Hillary Clinton aided its passage through her  invocation of the super-predator myth. A defense of Clinton rooted in the claim that “Jeb Bush held the same position” would not be exculpatory. (“Law and order conservative embraces law and order” would surprise no one.) That is because the anger over the Clintons’ actions isn’t simply based on their having been wrong, but on their craven embrace of law and order Republicanism in the Democratic Party’s name.

One does not find anything as damaging as the carceral state in the Sanders platform, but the dissonance between name and action is the same. Sanders’s basic approach is to ameliorate the effects of racism through broad, mostly class-based policies—doubling the minimum wage, offering single-payer health-care, delivering free higher education. This is the same “A rising tide lifts all boats” thinking that has dominated Democratic anti-racist policy for a generation. Sanders proposes to intensify this approach. But Sanders’s actual approach is really no different than President Obama’s. I have repeatedly stated my problem with the “rising tide” philosophy when embraced by Obama and liberals in general. (See here, here, here, and here.) Again, briefly, treating a racist injury solely with class-based remedies is like treating a gun-shot wound solely with bandages. The bandages help, but they will not suffice.

To a certain extent Coates is correct.  Whether one uses the rising tide image or sticks with trickle down, programs begun in the 1960s like affirmative action and various anti-discrimination laws in employment and housing have helped but have not come close to solving the problem that black Americans are more likely to be poor than white Americans.  No one can deny that slaves, former slaves, and their present day descendents have not suffered every form of economic discriminations one can think of because they have.  The question is are reparations a good solution.

Bernie

Conor Friedersdorf provided some speculative reasons why Bernie Sanders is right in not embracing reparations in his recent piece in the Atlantic.

Perhaps Sanders just thinks reparations are bad policy on the merits. There are many plausible reasons that a principled radical might come to that conclusion (though it isn’t entirely clear to me that Sanders is that radical even on matters of class).

Perhaps he is convinced that the highest incarnation of justice is a government that redistributes resources toward its citizens based wholly on their need, and doesn’t want to shift the Overton Window toward any model that is predicated on dessert beyond need, or that would redistribute wealth from poor to rich in some instances.

That seems consistent with principled socialism.

Perhaps when Sanders says that reparations would be divisive, he doesn’t mean that they would damage his campaign or the Democratic coalition by dividing its supporters––the plausible interpretation that Ta-Nehisi argued against in his critiques––but that it would divide Americans of different races against one another in a manner likely to cause more harm to vulnerable minority groups than good, or necessitate a divisive process of bureaucrats defining who qualifies as black.

The Overton Window referred to above is a media pundit term meaning the range of discourse the public is willing to accept.

When I commented on a friends Facebook page during a discussion of reparations that I thought it would be difficult if not impossible to figure out who was owed, another friend commented that maybe that was what Coates was trying to do – get us to talk about the issue.  If that was his aim, to move or enlarge the Overton Window, then he has succeeded.

I have a question for Sanders.  Why not take up Coates’ call to support a study?

…For the past 25 years, Congressman John Conyers Jr., who represents the Detroit area, has marked every session of Congress by introducing a bill calling for a congressional study of slavery and its lingering effects as well as recommendations for “appropriate remedies.”

A country curious about how reparations might actually work has an easy solution in Conyers’s bill, now called HR 40, the Commission to Study Reparation Proposals for African Americans Act. We would support this bill, submit the question to study, and then assess the possible solutions. But we are not interested.

Perhaps rather than demand reparations now we, Coates included, should push Congress – and all of the Democratic Presidential candidates to support HR 40.   Let’s keep talking about this.

Photograph:  huffingtonpost.com

 

 

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Some thoughts about product and corporate boycotts

A few days ago the ice cream maker, Ben and Jerry’s, offered free ice cream in exchange for a donation to whatever local charity the particular store had chosen.  I posted the information on Facebook knowing that I had friends who ate Ben and Jerry’s with some regularity.  A good friend (so good my wedding reception was at her house) posted a comment asking that we boycott Ben and Jerry’s because they sold ice cream to the Jewish settlements in the Palestinian Territory.  I’ve been thinking about boycotts since then and this post is my attempt to think “aloud”.

Looking back I can remember two successful boycotts I’ve participated in.  First was the Woolworth’s boycott in sympathy to the student sit-ins.  Second was the Delano Farmworkers Grape Strike.

David Richmond (from left), Franklin McCain, Ezell Blair Jr., and Joseph McNeil leave the Woolworth in Greensboro, N.C., where they initiated a lunch-counter sit-in to protest segregation, Feb. 1, 1960. (No photographers were allowed into the store on the first day of protest.)

David Richmond (from left), Franklin McCain, Ezell Blair Jr., and Joseph McNeil leave the Woolworth in Greensboro, N.C., where they initiated a lunch-counter sit-in to protest segregation, Feb. 1, 1960. (No photographers were allowed into the store on the first day of protest.)

The student sit-ins of lunch counters began in 1960 in Greensboro, North Carolina.  I found this NPR story about Franklin McCain and the sit-ins.

On Feb. 1, 1960, four students from all-black North Carolina Agricultural and Technical College walked into a Woolworth five-and-dime with the intention of ordering lunch.

But the manager of the Greensboro Woolworth had intentions of his own — to maintain the lunch counter’s strict whites-only policy.

Franklin McCain was one of the four young men who shoved history forward by refusing to budge.

McCain remembers the anxiety he felt when he went to the store that Monday afternoon, the plan he and his friends had devised to launch their protest and how he felt when he sat down on that stool.

“Fifteen seconds after … I had the most wonderful feeling. I had a feeling of liberation, restored manhood. I had a natural high. And I truly felt almost invincible. Mind you, [I was] just sitting on a dumb stool and not having asked for service yet,” McCain says.

They were not served, but returned day after day with more and more reinforcements.  Sit-ins at Woolworth’s lunch counters spread across the South.  In New Jersey where I grew up, there was a boycott of the local Woolworth’s in solidarity with the students.  Even after the lunch counters were integrated, it was years before I had lunch at one.  The first time I was in my early thirties.  I still remember I had tomato soup and grilled cheese – the special.

The grape boycott lasted 5 years from 1965 to 1970.  Millions of Americans came to identify with the farmworkers who wanted to unionize so they could improve working conditions and wages.  The United Farm Workers has a history of the strike.

Hundreds of grape strikers traveled across the U.S. and Canada, telling their stories and organizing mass support for the grape boycott. The strikers were joined by thousands of supporters who helped tirelessly organize the boycott.

Cesar [Chavez] and the farm workers believed if consumers in communities throughout North America knew about the suffering of field laborers—and saw the grape strikers struggling nonviolently—they would respond. For Cesar, nonviolence couldn’t be understood in the abstract. It could only be seen in action. He said, “the whole essence of nonviolent action is getting a lot of people involved, vast numbers doing little things.”

He knew most people couldn’t drop what they were doing and dedicate themselves completely to the movement like the grape strikers, most of whom lost their homes, cars and worldly possessions. But Cesar and the farm workers showed ordinary people that by making little sacrifices every day—by not eating grapes—they could directly help the poorest of the poor.

The boycott connected middle-class families in big cities with poor farm worker families in the California vineyards. Millions stopped eating grapes. At dinner tables across the country, parents gave children a simple, powerful lesson in social justice.

In my family we didn’t eat grapes for many years.  My mother had been a California farmer worker and later an organizer on the east coast for the Food, Tobacco, and Agricultural Workers Union.  We started boycotting very early in the strike if my memory is correct.

The Woolworth’s and Farm Worker’s boycotts were successful because they were narrowly focused and concerned an issue with which the average person could identify:  Segregated lunch counters and farm working conditions.  The boycotts that I have been asked to join recently include Monsanto, Nestles, and Ben and Jerry’s.

The first two have, in my opinion, little chance of success not because the cause isn’t clear, but because they lack focus.  I couldn’t even begin to get through the list of Nestles’ products I wasn’t supposed to purchase.  Organizers of the Monsanto boycott should just urge us not to purchase Monsanto’s “Round-Up”.  And as for Nestles and their draining of the California (and other aquifers), people should not be buying water in bottles anyway.  Better to ask people to stop buying bottled water where they can safely do so.  As for the request to boycott Ben and Jerry’s, I am afraid that the issue of Israeli settlements in Palestinian territory, although of concern to me, is too obscure and not of immediate interest to most Americans who will weigh that against the other good that the company does.

To succeed, corporate boycotts need to be focused in what we are asked not to purchase and concern a cause to which a critical mass of consumers can relate.

 

Photograph:  Jack Moebes/Corbis

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Labor, management and Market Basket

If you don’t live in New England – you have probably never heard of the Market Basket grocery chain.  It has been known for customer service and low prices.  I confess that I’ve probably shopped there maybe twice in the last 20 years so I am clearly not a regular.  But I know people who swear by Market Basket and, for some, it is the only store in town.  Whether you have heard of MB and love it, or don’t know the first thing about the store, there are lessons to be learned for Labor Day.

For more years than I can count, there has been a feud between the two cousins, Arthur S. and Arthur T. who inherited the store.  It has involved an epic court battle, and if I remember correctly, disciplinary action against some of the attorneys.  There was also an actual fist fight as at one point between the Arthurs.  All the while, Arthur T. has been managing the stores and making money for everyone.  But, according to the employees and Arthur T., the board wanted to take a bigger share of the profits for themselves and the shareholders who are mainly family members. The board decided to fire Arthur T.  Shirley Leung writes in her Boston Globe column

For six weeks, we were mesmerized by the sight of thousands of grocery clerks, cashiers, and other workers protesting at stores, on Facebook, and on the front pages of this paper. They did so at great risk, without the protection of a union, not because they wanted higher wages, but merely the return of their beloved boss, Arthur T. Demoulas.

 

Who among us would do that? Not many, if any at all. We were riveted because we wanted to be them. These rebellious employees gave voice to the voiceless masses who just wanted to hold on to decent wages for a decent day’s work at a time when fat cats get $50 million paychecks for showing up, and the gap between the rich and the poor is as gaping as ever.

 

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After the Market Basket board ousted Arthur T., these foot soldiers of capitalism kept the story alive when they made flyers protesting his removal and distributed them to customers. Then they reached out to the media and politicians to talk about their improbable demand. Soon workers walked off the job and refused to restock shelves. Customers boycotted in solidarity, putting the economic squeeze on new management to do something.

While it is tempting to portray Arthur T. as the Good Arthur and Arthur S. as the Bad Arthur, as Leung points out Arthur S. and his pals never carried out threats to fire everyone and hire new people.  There was an attempt to hold a job fair, but it was never clear how many people came or if anyone was hired.  I believe eight people were fired early on, but that example didn’t slow either the employee action or customer boycotts.  The governors of New Hampshire and Massachusetts got involved.  A settlement was announced finally and Arthur T. is buying out Arthur S. so as to become the majority shareholder.  He will now be running a severely damage company in deep debt and will be borrowing money to pay for his purchase.

Employees seem optimistic.  They returned to work as soon as the announcement was made.  Whether the stores can be stocked so there are things for people to buy, whether suppliers can return, and whether Arthur T. can keep to his promise to continue to treat and pay workers well are open questions.  If Market Basket can beat the odds and make a comeback to profitability, the story will be studied in business schools and by labor historians for many years.  Actually, it will probably be studied no matter what happens.

Market Basket employees celebrate the return of Arthur T.

Market Basket employees celebrate the return of Arthur T.

The Market Basket story is one for this Labor Day.  Non-union employees took collective action to save a boss and his practice of putting employees above shareholders. I’ll let Joan Vennochi have the last word.

Most notable is the power of narrative. Market Basket workers used social media as an organizing tool, but, at the same time, they skillfully used old and new media to tell their story before the other side knew what was happening.

And, unless you were Arthur S., it was a story that had something for everyone:

Workers standing up for, not against, management.

The desire to believe in one corporate leader putting the well-being of his workers

over shareholders, in an old-fashioned “It’s A Wonderful Life” way.

Employees of modest means willing to put paychecks for rent and mortgages on the line for principle.

“It speaks to a search and yearning for respect and fairness,” said Lew Finfer, a veteran community organizer who has worked for decades with unions to do just that by promoting better worker pay, conditions, and benefits.

There are lessons here for everyone.

Photograph:  JESSICA RINALDI/GLOBE STAFF

 

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Baseball, money and Sandy Koufax

When I read what ballplayers, even marginal ones who spend most of their time in the dugout, are making these days, I have  reactions from “Wow.  That’s a lot of money.” to “Well, they have pretty short careers.” to “I guess ticket prices will go up again” so I was very interested in Michael Beschloss’ piece in the New York Times this morning. 

I was a pre-teen when Sandy Koufax first came to baseball.  I kept a notebook with clippings and newspaper articles about him.  A close friend was a New York Giants fan and so I moved over to follow the Brooklyn Dodgers, abandoning my hometown team, the Phillies.  Baseball was one of the things we often watched on television as a family and I learned a lot about the game from my father and grandfather.  But back then, every game was not televised and after we acquired an early transistor radio, I would often listen outside in the afternoons when I could pick up the Dodger games from New York.  I was devastated by their move to Los Angeles until I figured out that at night I could pick up team broadcasts from all the National League teams east of the Mississippi which, back then, were almost all the teams in the league.  I would figure out who the Dodgers were playing and find that station staying up far into the night listening to the games when they played in California.  I particularly tried to listen when Sandy pitched.

I know that there are clippings in that notebook (which is probably in a storage box somewhere) about the Koufax-Drysdale holdout in 1965.  Beschloss writes

In 1962, the star Los Angeles Dodgers pitcher Sandy Koufax invested in a West Hollywood motor inn, which was renamed “Sandy Koufax’s Tropicana Motel.” Down Santa Monica Boulevard from the famed Troubadour club, these “74 luxurious air-conditioned rooms” — rented at “popular prices” — came to lodge some of the biggest musical acts of the period: Alice Cooper, Bob Marley, the Mamas and the Papas, Led Zeppelin, Janis Joplin, Jim Morrison and the Doors. “I don’t know which made me more excited,” said one guest, “to be in Sandy’s motel or to be in a room right beside Sly Stone, from Sly and the Family Stone.”

The early 1960s were not the era of players like Miguel Cabrera, whose eight-year contract extension in March will give him the bountiful sum of $248 million. A major league star of that earlier time was well paid, but not so lavishly — given the relative brevity of most baseball careers — that he had no need to take an off-season job or plaster his name on a motor hotel or cocktail establishment like “Don Drysdale’s Dugout Lounge” in the San Fernando Valley suburb of Van Nuys. In 1965, Koufax was earning $85,000. Drysdale, his fellow Dodgers pitcher, took in $80,000. (Each salary would equal slightly less than $600,000 in 2014 dollars.)

That fall, the two men tried to overturn the usual year-to-year method of major league baseball bargaining, which Koufax called “negotiation by ultimatum” from management. He and Drysdale, friends who had served together in the Army, jointly demanded that the Dodgers pay them a million dollars over three years, divided equally between the two of them. When the team went to Dodgertown in Vero Beach, Fla., for 1966 spring training, Drysdale and Koufax staged a double holdout. “Ballplayers aren’t slaves,” Koufax told reporters, “and we have a right to negotiate.”

Sandy Koufax and Don Drysdale after winning the 1965 World Series

Sandy Koufax and Don Drysdale after winning the 1965 World Series

The two held out for most of spring training – 30 plus days.

The 32-day boycott persisted almost to the end of spring training. During the “war of nerves,” Koufax cranked up the pressure by telling the press that he and Drysdale needed time to “reflect on what we want to do with ourselves if we don’t play this season or ever again.” Furious that his star pitchers were guilty of the heresy of bargaining with him through an agent, the Dodgers’ owner, Walter O’Malley, sputtered, “Baseball is an old-fashioned game with old-fashioned traditions.”

Then Drysdale, anxious about supporting his family, told his partner he could hold out no longer. Koufax, who suffered from an arthritic left elbow and was secretly planning to quit at the end of the 1966 season, let Drysdale inform management that they wanted to settle. Drysdale finally told Bavasi, “I’ll sign for $110,000 and Sandy will sign for $125,000.” (In 2014 figures, this would still be less than a million dollars for each pitcher.)

Now we have a Player’s Association and everyone has an agent.

Koufax did retire around the same time I went to college.  Drysdale pitched until 1969.  Koufax as elected to the Hall of Fame in 1972, Drysdale in 1984.  But beyond  being remembered their pitching talent, today’s sports figures should thank them for taking that first step.

Koufax’s new salary was nearly the same as that of Willie Mays, the best-paid man in baseball. Concerned about possible holdouts by other players, Bavasi insisted the following year that the Koufax-Drysdale tactics “only worked because the greatest pitcher in baseball was in on it,” and vowed, “It will never happen again.”

But Bavasi was wrong. The holdout changed the relationship between baseball management and players, paving the way for the big money game of our day. Just after the standoff ended, Arthur Daley of The New York Times called the settlement “baseball’s first collective bargaining arrangement,” writing, “There are aspects of unionism to it and no one in this sport of rugged individualists ever was confronted with such a thing before.” Koufax later agreed that his partnership with Drysdale was like a labor union — “a very small union, just the two of us, Don and myself.”

Drysdale died much too young in 1993, but Koufax still works with the Dodgers and just this spring was the catcher to Vin Scully’s first pitch.

Photograph:  espn.go.com

 

 

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Solving the pay equity problem: Not that easy

white-house-wage-gapIs the gender gap in wages a myth or is it as the President said yesterday just math?  If a company pays, as does the White House and most other government agencies, equally for the same job, why is there still a gap in total pay?  Is that as Christina Hoff Summers would argue, not a wage gap since the cause is that women are in different job?  Christopher Ingraham wrote in the Washington Post

The American Enterprise Institute caught the White House flat-footed yesterday with its finding that female White House workers earned roughly 88 cents to the dollar compared to male employees. This came the day before two high-profile executive orders aimed at narrowing the gender wage gap among federal contractors.

When asked about the discrepancy by reporters, spokesman Jay Carney said that those figures are based on the total of all staff jobs, and that women tend to fill more lower-paying positions than men. When you break it out by position, “men and women in equivalent roles here earn equivalent salaries,” Carney said. Incidentally, this is the pretty much the same argument that AEI scholar Christina Hoff Summers makes to argue that the gender wage gap is a myth.

Human Resource people (of which I was once one) would say it is all about classifying jobs.  There is an endless debate about what jobs require more skills, more effort, more responsibility.  Is the woman who comes to help your sick mother as a home health aide worth less than the man who manages the local convenience store? (Neither gets paid very well.)  Is a pre-school teacher worth less than the CEO of Facebook?  Ok.  I can hear people saying that I’m comparing apples and oranges, but these are the kind of things we need to consider as we look at not only the gender issues but also at low wage jobs generally.  If you look at the Washington Post chart, you can see that the national wage gap is pretty constant, but the general trend of the White House gap is down.

There are really several problems at work here.  First is the failure to pay women an equivalent wage for the same work done by a man.  This may be deliberate or the women may simply be given a different job title and classification.  The second is what the Institute for Women’s Policy Research calls occupational segregation.

Pay equity may also be impacted by other more subtle factors than workplace discrimination. IWPR’s research shows that, irrespective of the level of qualification, jobs predominantly done by women pay less on average than jobs predominantly done by men. Women have made tremendous strides during the last few decades by moving into jobs and occupations previously done almost exclusively by men, yet during the last decade there has been very little further progress in the gender integration of work. This persistent occupational segregation is a significant contributor to the lack of significant progress in closing the wage gap.

The third problem is one that speaks mainly to women in the private sector at high levels:  Women appear to be less willing to ask for more in salary negotiations.  While this is unimportant and insignificant, more women are hurt by the first two problems.

In the late 1970s I was working as a research analyst for the Virginia State Equal Opportunity Office.  We got a complaint from a woman professor at a state college who suspected that she was being paid less than a male colleague who started around the same time as she did.  They were, I think, both coming up for tenure.  This was the age before editable spreadsheets were common, but I managed to make a chart showing hire dates, educational levels, teaching load and teaching evaluations among other factors I can’t remember now for that department.  When laid out, it became very clear that the women, including the complainant were being paid less.  This set off a request for an analysis of the entire school as well as requests from several other state colleges and universities.  I ended up teaching people from the schools how to do this themselves since there was no way I could tackle such a large project on my own.  Problems were corrected, but I don’t recall that we ever compared  salary levels at the Department of Physics (probably mostly men) to the School of Nursing (mostly women).

I tell this story for two reasons.  One, the problem and issue has been around a long, long, time.  And second, I think we need to look harder at occupational segregation and, if we can’t totally solve that, we need to look at how we, as a society, value what we call “women’s work.”  In the end, that is the only way to cure the pay equity problem.

 

 

 

 

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Spending and the deficit

There is a lot of information floating around out there, but I just got these charts from my Congressman, Mike Capuano, and I wanted to share them.

The Bottom Line
The statistics and chart below will prove two points despite any rhetoric to the contrary:
  1. Federal spending is headed towards the lowest share of GDP in memory;
  2. The federal government is making great progress towards reducing our annual deficit.
A Note about Federal Spending
If you listen only to a few talking heads you might think that the federal government is engaged in a spending frenzy.  That is actually not the case.  In fact, our government is currently spending LESS than it did in 1974 on discretionary spending programs, the year that detailed economic records were first compiled.
We all know that a dollar doesn’t go as far as it once did – so measuring any spending over a 40 year period demands adjustment.  One way to do this is to look at government spending as a percentage of the Gross Domestic Product (GDP). The chart below with data from the Congressional Budget Office (CBO) illustrates that in 1974, federal government spending under the Nixon Administration equaled 9.3% of ALL spending in the country (the GDP).  Discretionary spending peaked in 1983 under the Reagan Administration at 10% of GDP.  The most recent figures show that federal spending last year under President Obama fell to just 7.2% of GDP and is estimated to decline even further over the next several years.
Historically, the lowest level of discretionary government spending in the last 40 years occurred in 1999 under the Clinton Administration, and it rose steadily from 6.1% to 7.7% during the George W. Bush Administration.
The point I am trying to make is that it is important to keep federal spending in perspective.  Your federal government today is spending a much smaller share than President Reagan ever did and more spending cuts are coming.  Many of us think it is long past time to face reality and truly consider the future of our country. Do we want good roads? Do we want good schools?  If the answer is yes, then it’s time to start paying for them.
At this point in our nation’s history, we should be investing again in our future. Our economy is improving and the federal budget has stabilized. The notion that federal spending is out of control just isn’t accurate. Take a look at the chart (or click here for a larger version) and table below, which illustrate my argument:
Discretionary Outlays Since 1974
as % of Gross Domestic Product (GDP)

FY

Defense

Nondefense

Total

Nixon 1974

5.4

3.9

9.3

Ford 1975

5.4

4.4

9.8

Ford 1976

5.0

4.8

9.8

Carter 1977

4.8

4.9

9.7

Carter 1978

4.6

5.0

9.6

Carter 1979

4.5

4.8

9.3

Carter 1980

4.8

5.1

9.9

Reagan 1981

5.0

4.8

9.8

Reagan 1982

5.6

4.2

9.8

Reagan 1983

5.9

4.1

10.0

Reagan 1984

5.8

3.8

9.6

Reagan 1985

5.9

3.8

9.7

Reagan 1986

6.0

3.6

9.7

Reagan 1987

5.9

3.4

9.3

Reagan 1988

5.6

3.4

9.0

Bush 1989

5.5

3.3

8.8

Bush 1990

5.1

3.4

8.5

Bush 1991

5.2

3.5

8.7

Bush 1992

4.7

3.6

8.3

Clinton 1993

4.3

3.6

7.9

Clinton 1994

3.9

3.6

7.5

Clinton 1995

3.6

3.6

7.2

Clinton 1996

3.3

3.3

6.7

Clinton 1997

3.2

3.2

6.4

Clinton 1998

3.0

3.1

6.2

Clinton 1999

2.9

3.1

6.0

Clinton 2000

2.9

3.1

6.1

GW Bush 2001

2.9

3.2

6.1

GW Bush 2002

3.2

3.5

6.7

GW Bush 2003

3.6

3.7

7.3

GW Bush 2004

3.8

3.6

7.4

GW Bush 2005

3.8

3.7

7.5

GW Bush 2006

3.8

3.6

7.4

GW Bush 2007

3.8

3.4

7.3

GW Bush 2008

4.2

3.5

7.7

Obama 2009

4.6

4.0

8.6

Obama 2010

4.7

4.5

9.1

Obama 2011

4.5

4.2

8.8

Obama 2012

4.2

3.8

8.0

Obama 2013

3.8

3.5

7.2

Obama 2014 EST

3.5

3.4

6.9

Obama 2015 EST

3.3

3.2

6.6

Obama 2016 EST

3.2

3.0

6.2

2017 EST

3.1

2.9

6.0

2018 EST

3.0

2.8

5.8

2019 EST

2.9

2.7

5.7

2020 EST

2.9

2.7

5.6

2021 EST

2.8

2.6

5.4

2022 EST

2.8

2.6

5.4

2023 EST

2.7

2.5

5.3

2024 EST

2.7

2.5

5.2

Sources: Cong Budget Office; Office of Management and Budget

The Federal Deficit
We have heard a lot of talk about the federal deficit. The chart belowshows the amount of the annual deficit, or in some cases, surplus,generated by the federal government.  There are many ways to interpret these statistics and I would like to offer a few comments.
You can see there have been only four years since 1974 wherea surplus was generated– the last three years under PresidentClinton and the first year under PresidentGW Bush.  One could argue that the 2001 surplus should be credited to Clinton policies – butI will leave that aside.  However, it is clear that the federal governmentstarted regenerating deficits under Bush policies – most notably his first tax cut in 2001 (before the 9/11 attack).  Certainly, the terrorist attacks on September 11th and the country’s decision to engage in Afghanistan impacted the economy. However,the federal government made a conscious decision to turn away from fiscal discipline BEFORE September 11th.
One can quickly notice the impact of the 2008 economic crisis and our reaction to it.  Regardless of how you might feel about the stimulus and the bailouts – at least it was clearwhat the short term effect would be on the federal deficit.  I happen to think BOTH those actions were necessary and appropriate to save our economy from an even worse fate. Certainly the bailout should have had more teeth. Remember though it was passed under the Bush Administration so those of us calling for more teeth were drowned out.The only choice we faced was action or inaction, and we chose action. I also believe that the stimulus should have been more targeted on creating jobs.  Unfortunately, Congress never has a choice between perfect options – it is always a choice between imperfect plans.  I understand thatmost people have formed pretty strongopinionsabout the actions that the government took and I will let history decide whether those actions were appropriate.
Since the economic crisis in 2008, the federal government has been making significant and steady progress towards reducing our annual deficit.  The average deficit over the 43 years covered by this table equals 3.1% of the GDP. This chart doesn’t show it, but by the end of the Obama Administration it will be below that historic average. Remember, absolute numbers like these only tell a portion of the story.
My final note on this is historic.  This chart shows the deficits and surpluses under 20 years of Democratic Presidents and 22 years of Republican Presidents … good times and bad … war and peace.  I think the most important measure is the change from one year to the next. Maybe we cannot achieve our goals in one year, but are we making progress?  Based on this chart you can calculate that under Democratic Presidents, the deficit was REDUCED by an average of $22.3 billion each year … under Republican Presidents that Deficit has been INCREASED by an average of $44.5 billion each year.  I’ll let you decide which course is the better one.

Revenues

Revenues Change %

Outlays

Outlays Change %

Total Deficit / Surplus

Change $

Nixon 1974

263.2

269.4

-6.1

Ford 1975

279.1

6%

332.3

23%

-53.2

-47.1

Ford 1976

298.1

7%

371.8

12%

-73.7

-20.5

Carter 1977

355.6

19%

409.2

10%

-53.7

20.1

Carter 1978

399.6

12%

458.7

12%

-59.2

-5.5

Carter 1979

463.3

16%

504.0

10%

-40.7

18.5

Carter 1980

517.1

12%

590.9

17%

-73.8

-33.1

Reagan 1981

599.3

16%

678.2

15%

-79.0

-5.1

Reagan 1982

617.8

3%

745.7

10%

-128.0

-49.0

Reagan 1983

600.6

-3%

808.4

8%

-207.8

-79.8

Reagan 1984

666.4

11%

851.8

5%

-185.4

22.4

Reagan 1985

734.0

10%

946.3

11%

-212.3

-26.9

Reagan 1986

769.2

5%

990.4

5%

-221.2

-8.9

Reagan 1987

854.3

11%

1,004.0

1%

-149.7

71.5

Reagan 1988

909.2

6%

1,064.4

6%

-155.2

-5.4

Bush 1989

991.1

9%

1,143.7

7%

-152.6

2.5

Bush 1990

1,032.0

4%

1,253.0

10%

-221.0

-68.4

Bush 1991

1,055.0

2%

1,324.2

6%

-269.2

-48.2

Bush 1992

1,091.2

3%

1,381.5

4%

-290.3

-21.1

Clinton 1993

1,154.3

6%

1,409.4

2%

-255.1

35.3

Clinton 1994

1,258.6

9%

1,461.8

4%

-203.2

51.9

Clinton 1995

1,351.8

7%

1,515.7

4%

-164.0

39.2

Clinton 1996

1,453.1

7%

1,560.5

3%

-107.4

56.5

Clinton 1997

1,579.2

9%

1,601.1

3%

-21.9

85.5

Clinton 1998

1,721.7

9%

1,652.5

3%

69.3

91.2

Clinton 1999

1,827.5

6%

1,701.8

3%

125.6

56.3

Clinton 2000

2,025.2

11%

1,789.0

5%

236.2

110.6

GW Bush 2001

1,991.1

-2%

1,862.8

4%

128.2

-108.0

GW Bush 2002

1,853.1

-7%

2,010.9

8%

-157.8

-286.0

GW Bush 2003

1,782.3

-4%

2,159.9

7%

-377.6

-219.8

GW Bush 2004

1,880.1

5%

2,292.8

6%

-412.7

-35.1

GW Bush 2005

2,153.6

15%

2,472.0

8%

-318.3

94.4

GW Bush 2006

2,406.9

12%

2,655.1

7%

-248.2

70.2

GW Bush 2007

2,568.0

7%

2,728.7

3%

-160.7

87.5

GW Bush 2008

2,524.0

-2%

2,982.5

9%

-458.6

-297.9

Obama 2009

2,105.0

-17%

3,517.7

18%

-1,412.7

-954.1

Obama 2010

2,162.7

3%

3,457.1

-2%

-1,294.4

118.3

Obama 2011

2,303.5

7%

3,603.1

4%

-1,299.6

-5.2

Obama 2012

2,450.2

6%

3,537.1

-2%

-1,087.0

212.6

Obama 2013

2,774.0

13%

3,454.3

-2%

-680.3

406.7

Obama 2014 EST

-514.0

166.3

Obama 2015 EST

-478.0

36.0

Obama 2016 EST

-539.0

-61.0

 

 My bottom line? Let’s spend some money and create some jobs.

Post is cut and pasted from an email update from Congressman Michael Capuano. 7th CD, Massachusetts.

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Poverty and microcredit

Ever since I read about Muhammad Yunus winning the Nobel Peace Prize for his Grameen Bank in his native Bangladeshi, I wondered why no one in the United States had thought of doing something similar for small businesses especially as credit got tighter.  Buried in the business section of yesterday’s New York Times was the story of the Grameen Bank in the Jackson Heights section of Queens.  There was microcredit offered in parts of the United States, I just didn’t know about it.  This, according to the Times story by Shaila Dewan, is how it works.

On a recent Thursday, dozens of Latina immigrants clustered in a small, noisy second-floor office in the Jackson Heights neighborhood of Queens, waiting for one of a half-dozen loan officers to call their names and hand over a check. Children loitered in the stairwell or sprawled, calflike, over their mothers’ laps.

The loans were recorded the old-fashioned way, with ink, in green passbooks that enumerated the borrowers’ commitments to “exercise responsible financial behavior,” “seek preventative health care” and meet each week in a “comfortable and safe place.” Aside from these words, little secured the loans in question, which ranged from $1,500 to $8,000.

In the United States, microcredit has generally been defined as loans of less than $50,000 to people — mostly entrepreneurs — who cannot, for various reasons, borrow from a bank. Most nonprofit microlenders include services like financial literacy training and business plan consultations, which contribute to the expense of providing such loans but also, those groups say, to the success of their borrowers.

Grameen America dispenses with the advice and makes smaller, less formal loans at a lower cost. It hews closely to the model developed in Bangladesh: borrowers form groups of five, approve one another’s loans and make weekly payments at 15 percent annual interest, a rate comparable to those charged by other nonprofit lenders. That is far less than the rates of payday lenders, which can charge 400 percent or more.

If everyone in the group repays on time, each member is entitled to a larger loan in the next cycle. Members are supposed to be below the federal poverty line when they join and use the money for entrepreneurial purposes. Grameen does not ask if they are legal residents.

What are the women doing with the loans?

In Jackson Heights, borrowers said they used the money to buy costume jewelry, Herbalife nutritional supplements or Mary Kay cosmetics for resale in home-based businesses or door to door, many supplementing income from another job like housecleaning. Some make cakes or empanadas; others tailor clothing or sell flowers. One woman buys designer clothes at closeouts and resells them from a tiny shop on the second floor of a commercial complex; another sends clothes home to the Dominican Republic, where her sister sells them on the street.

S. M. Nural Kabir fills out papers for borrowers, many of whom lack access to credit

S. M. Nural Kabir fills out papers for borrowers, many of whom lack access to credit

The question is:   Will selling Mary Kay bring a lot of families out of poverty?  Two women with storefront business were profiled in the story.

…Guadalupe Perez, 51, took a loan when business fell off during the recession. She and her husband were having trouble paying rent on the party decoration store they had started with their life savings. “It opened up a way for me to keep my business,” she said through an interpreter, standing near a display of ribbons and wine glasses that she had embellished with glittery designs. “I wanted to hear what the rules were for Grameen because I was afraid of going to a bank. It was a loan that I could pay little by little; I felt it was a good choice for me.”

Ms. Perez has used subsequent loans to expand the size of her store and now plans to invest in enough tablecloths to decorate two parties at the same time. But the loans have not increased her enthusiasm for entrepreneurship. Asked whether, had she the chance to do it over, she would go into business for herself, her answer was short and simple: no.

Ms. Perez said she and her husband worked every day and earned $500 to $600 a week, or about $29,000 a year — a “very low” income by federal standards for New York. They are not able to save.

…

Elizabeth de Jesus, 45, is a hairdresser who, with Grameen’s help, achieved her dream of opening her own salon in Corona, Queens. But she is unable to estimate her annual income. “I don’t know because I don’t keep it,” she said. “I spend it all on the payments, on the rent, on food. I spend it every week.”

The life of a small business owner is always difficult and I was surprised that there wasn’t more financial planning and management training provided by Grameen to those receiving loans.  There is, however,  one very bright light in the story:  establishing credit.

Grameen helps its clients in another way that many experts say is more important than increasing income — it establishes good credit scores. Many poverty alleviation groups have shifted their focus from saving to credit building, because people with poor or no credit must leave large deposits for basic needs like utilities, have trouble renting decent housing, pay much higher interest rates and have a harder time finding jobs.

Nayrobi Gonzalez de Quiroz, 26, recently received her first Grameen loan but decided not to follow through with her plan to buy handbags for resale. After using about $200 to pay off a debt, she said, she decided it was safer to leave the money in the bank and make the payments from her earnings as a manicurist.

“Here, you have to have good credit,” she said. “I have a young son and I have to think about his future.”

The results appear to be mixed.

Good data on the benefits of microcredit are scarce, and the few randomized studies have not demonstrated that it substantially improves prosperity in developing countries. In the United States, data collected by the Field program of the Aspen Institute show that microloans yield significant increases in income and create jobs. Joyce Klein, the program’s director, said the surveys had limitations but more rigorous studies that included randomized control groups would be prohibitively expensive.

Grameen says that its loan recipients have increased their incomes by an average of $2,500 during each six-month loan cycle, and that one in five hires an additional worker. But Katherine Rosenberg, a senior vice president at Grameen, acknowledged that pinning down income data is the group’s biggest challenge, because borrowers tend to think in terms of whether they have enough to cover their next bill, not how much they make over all. Ms. Rosenberg said many clients may not earn more but instead work less, dropping one of several low-wage jobs or taking advantage of the flexibility of self-employment to spend more time with their children.

Peer pressure produces a good repayment rate on microloans and I know they are not a magic bullet and way out of poverty, but it appears they have other benefits for those women who want to start businesses and/or build credit.   There is no easy way to break the cycle of poverty.

Photograph:  Ruth Fremson/The New York Times

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