The Deep South and Medicaid Expansion

Click the image to read our newest report, “The Deep South and Medicaid Expansion: The View From Alabama, Georgia, Louisiana, Mississippi, and South Carolina,” and learn more about public perception of the Affordable Care Act.

Considering Benefit Corporations as an Integral Part of Tax Reform and our Economic Future

by Ernie C. Jolly

At a shareholders’ meeting for the fictional corporation Teldar Paper, Wall Street (20^th Century Fox, Dec. 11, 1987) antagonist Gordon Gekko argued that “greed, for a lack of a better word, is good” and that “greed, in all its forms, greed for life, for money, for love, [for] knowledge, has marked the upward surge of mankind.” Although a fictional tale, the blockbuster hit may have foreshadowed what became the dominant culture among private corporations prior to the 2008 financial meltdown.  Since the crisis, financial analysts have identified greed as the impetus that encouraged Wall Street executives to amass unsustainable amounts of financial risks. Notwithstanding its negative impact, the crisis sparked a movement that has the potential of changing corporate culture for better. Through “benefit corporation” statutes, lawmakers in several states have modified their laws to encourage more altruistic behavior among entities. This movement may have been futile if the crisis had not challenged the notion that greed is essentially good. In that vein, the time may be ripe for federal policymakers to consider ways to encourage other states to enact similar legislation.

Corporations are creatures of state statutes that define the standards for incorporation. Despite differences among the states’ corporate codes, these laws are rather consistent in compelling corporate directors and managers to pursue the single goal of increasing profits for the benefit of shareholders. Accordingly, among many corporations, profit maximization usually trumps any desire to serve a public purpose.

In April of 2010, Maryland became the first state to enact a benefit corporation statute. Currently, Maryland has been followed by 11 other states. These statutes legally allow entities to pursue interests beyond simply increasing profits for investors. According to B Lab, a nonprofit whose mission is to use the power of business to solve social problems, benefit corporations:  “(1) have a corporate purpose to create a material positive impact on society and the environment; (2) are required to consider the impact of their decisions not only on shareholders but also on workers, community, and the environment; and (3) are required to make available to the public an annual benefit report that assesses their overall social and environmental performance against a third party standard.” After electing to become a benefit corporation, corporate directors and officers are legally protected if they consider the non-financial interests of their workforce, local communities, and the environment while making decisions, even if the decisions do not yield the most profit.

Despite the flexibility afforded to them on the state level, benefit corporations are treated by the Internal Revenue Service as any other for-profit entity, and donations to them are not deductible as they would be if given to a charity. Therefore, a benefit corporation’s income is fully taxable, and their investors and donors are not provided the same tax incentives as traditional charitable donors. As the House Committee on Ways and Means considers comprehensive tax reform, the Committee should also consider organizing hearings on benefit corporations. If this current tax treatment is eventually changed, there may be both more incentive for entities to adopt the new corporate form, and more pressure on state legislatures to jump on the bandwagon.

Ernie C. Jolly is a spring 2013 intern at the Joint Center for Political and Economic Studies and a second-year law student at American University’s Washington College of Law.

Media and Technology Stats and Studies – February 19, 2013

Local Phone Companies and Libraries Split on Whether NTIA’s ‘BTOP’ Program Has Been Wasteful

Local phone companies complained the federal government’s program to build broadband to remote areas has been wasteful.  The companies and others complained about millions of dollars in duplicative— and, in some cases, lavish—expenditures by BTOP grant recipients.  In a separate report, the American Library Association said the broadband stimulus program has had a strong and positive impact on public libraries.

WSJ: Many Recipients of Lifeline Mobile Phone Subsidies Cannot Show Eligibility

The Wall Street Journal reported the FCC could not confirm whether some 41% of 6 million Lifeline subscribers were eligible to receive mobile phone subsidies.  According to the Journal, the FCC spent $2.2 billion last year providing mobile phones to low-income Americans. Mobile phone carriers responsible for collecting eligibility data said many subscribers simply did not provide the data needed to confirm their eligibility to receive mobile phone subsidies.

Pew: Blacks and Hispanics Prefer Twitter/Instagram, Women Prefer Pinterest

The Pew Research Center released a report on demographic trends in social media.  Among the findings, blacks and Hispanics are avid users of Twitter, and women prefer using Pinterest.

Univision and Disney Announce Fusion– New Channel for Latinos

Univision and ABC News, which is owned by Disney, announced it will premiere Fusion, an English-language news and entertainment channel targeting Latinos, this summer.

Other Reports:

FCC: Broadband Service Providers Deliver Close to Advertised Speeds

The National Intelligence Agency concluded the United States is the target of a massive cyber-espionage campaign. The report identified China as the leading culprit most aggressively attempting to access computer systems of American institutions and exploit the data it uncovers for its own competitive advantage. Disclosures from the U.S. Department of Commerce and China’s customs administration reveal China has surpassed the U.S. as the world’s largest trading nation with $3.87 trillion traded in goods in 2012, compared to $3.82 trillion traded during the same period for the U.S.

The U.S. Government Accountability Office released its cybersecurity report and recommendations.  The Committee to Protect Journalists released a report stating cyberattacks against media companies and journalists are on the rise.

Raytheon has developed a technology to covertly track social media users.

Thompson Reuters announced it will cut 2,500 jobs.          

The European Union cut its €7 billion ($9.36 billion) fund for expanding access to broadband in Europe and assisting businesses in adopting cloud services.  However, ZenithMedia reported Western Europe leads in new media adoption.

Gartner research reported global mobile phone sales fell in 2012.

Dealbook reported a significant rise in merger activity in 2013. Comcast perfected its ownership of NBC/Universal, buying GE’s 49% share for $16.7 billion.  Charter Communications acquired Cablevision Systems’ Optimum West for $1.625 billion. Optimum West boasts approximately 304,000 customers in Utah, Wyoming, Colorado, and Montana.  Google Ventures has become the number 3 venture capital firm in the U.S.

NYT: How Advertising Targets Our Children

As the market for e-books continued to grow in 2012, Amazon boasted the largest overall share of book sales with 27% at the end of September compared to its 21% share the previous year. Even with efforts to promote its Nook e-book tablet in stores, Barnes and Noble’s overall share of book sales fell to 16%, down from 17% in 2011.

ITIF released a report stating, contrary to conventional wisdom, the United States has made great strides in broadband deployment, performance, and price.

NYT’s Paywall Exceeds Expectations with Explosive Digital Subscriber Growth

The White House launched Consumer.Data.gov to “empower Americans with the data and tools they need to make more informed choices in the marketplace.”

NYT: Research attempting to link video games with real world violence is contradictory, at best.

Boston Consulting Group reported consumers derive more value from online media relative to what they paid for it, than they do from offline media.  The report looked at books, radio and music, U.S. newspapers and magazines, TV and movies, video games, international newspapers and magazines, and user-generated content and social networks.

AMC’s “The Walking Dead” returned a record audience for cable television programming, with 12.3 million total viewers for its February 10 midseason premiere, against competition from the Grammy Awards and CBS’ “Big Bang Theory.”

Nielsen: State of the Union Audience Was Down 12% from 2012

Dorner Coverage Doubled Normal Local News Audience Ratings in L.A.

Media and Technology Stats and Studies – February 8, 2013

FCC Proposes Nationwide, Super WiFi Networks

The Washington Post reported the FCC has proposed the creation of super WiFi networks across the nation using broadcast spectrum. The announcement sparked intense lobbying by telecommunications companies arguing auctioning the airwaves proposed for super WiFi would raise billions for the U.S. Treasury and the extent of interference the networks would cause ought to be thoroughly investigated. Technology companies like Google and Microsoft have argued such Super WiFi networks would spur innovation and reduce the cost of wireless for the poor.  In remarks presented at the FCC on Thursday, Joint Center for Political and Economic Studies Media and Technology Institute VP and Director John Horrigan noted cost is the most cited reason (36%) among those who have not adopted broadband. However, wireless broadband is not panacea for closing the broadband adoption gap, Dr. Horrigan said.

Cisco: Mobile Use Will Surge Over the Next Five Years

Cisco anticipates mobile internet use will surge by 66 percent per year over the next 5 years. If history is any guide, the rate will be even higher for people of color.  The Joint Center for Political and Economic Studies has reported 50 percent of black users use mobile devices to access the Internet, compared to 30 percent of whites.

Girls Fare Worse in Science in Western Nations than Eastern Ones

In a science test given in 65 countries by the Organization for Economic Cooperation and Development (OECD), girls outperformed boys in more countries.  In the United States, however, boys outscored girls by a rate of 2.7 percent.

FCC Releases Annual Performance Report           

The FCC released its annual performance report detailing its progress in fulfilling its strategic goals and performance commitments. The Commission’s accomplishments having the most direct impact on underrepresented Americans include reforms to the Universal Service Fund, including the launch of the Connect America Fund and Mobility Fund; overhauling Lifeline Linkup; implementation of the Twenty-First Century Communications and Video Accessibility Act of 2010, and; enhancing the ability of Tribal Nations to own broadcast facilities.

The Atlantic: Less Dense Mapping Data for Less Cosmopolitan Areas May Exacerbate Real-Word Inequality

The Atlantic Monthly reported on the effect lack of mapping data has on the knowledge base used for addressing real-world inequality.  For example, most Tweets during hurricane Sandy came from areas in New York least affected by the storm. The article also suggests online searches for the same information, such as “restaurant”, but searched for in different languages, lead to different results, thus “making people experience fundamentally different cities.”

Other Reports:

Nielsen reported Super Bowl XLVII broke ratings records in metered markets with a 52.9 rating/75 share overall, with the highest rating/share in Baltimore (59.6/83). Still, the game’s cumulative audience of 108.4 million viewers did not surpass last year’s record Super Bowl audience of 111.3 million. And broadcast industry consulting form SNL Kagan estimated CBS may have lost more money spending on production costs and license fees than the $240 million it generated in ad revenue.  Interestingly, San Francisco did not rate among the top ten metered markets.  Twitter recorded 24.1 million Super Bowl game tweets.

Dell, Inc. will go private in a $24 billion deal.  Microsoft will loan the company $2 billion.

U.S.-based Liberty Global will acquire British cable company Virgin Media for $16 billion. The deal comes amid declining advertising revenues throughout Europe and Americans playing an increasing role in media industries there.

Sixty-one percent of Facebook users have taken a break from the site, according to the Pew Research Center.  Taking a break from Facebook appears more likely to maintain friendships than unfriending  someone, according to a University of Colorado at Boulder study, which showed 40% of people who have been unfriended on Facebook will avoid the person who unfriended them in real life.

Disney’s lagging movie and TV divisions caused its profits to slide 6% in 4Q12. Increased programming costs at ESPN for football and basketball, as well as a 43% drop in operating income of its Disney Studios unit are among several factors blamed for the decline.  Disney’s theme park returns were strong, though, with operating income up 4% to $577 million.

Reuters: AOL’s revenue rose for the first time in 8 years.

Kapersky Lab reported a child watching videos on YouTube is an average of just 3 clicks away from disturbing, adult content.

Ad agencies predict digital ad spending may eclipse traditional ad spending in as few as 3 years.

Millenial Media reported 64 percent of gaming ad impressions came from Android devices

eMarketer: 92.5 million people used digital coupons in 2012.

Foote Partners reported tech jobs accounted for up to 14% of January hiring.

Can You Hear Us Now?: Communications Policy and the Criminal Justice System

by Joseph Miller, Esq.

Talk about convergence.  Not only has the Internet changed the way Americans consume content, it is also changing the criminal justice system.

The United States has the highest incarceration rate in the world.  According to the 33-country Organisation for Economic Co-operation and Development (OECD), the U.S. incarceration rate is 760 prisoners per 100,000 population.  Only 3 of the remaining OECD countries have incarceration rates above 250 per 100,000. These include Israel (325 per 100,000), Chile (317 per 100,000) and Estonia (273 per 100,000).  African-American and Hispanic men (3,074 per 100,000 and 1,258 per 100,000, respectively) comprise a disproportionate share of American prisoners, compared to just 459 per 100,000 of white men.

Policymakers should continue to monitor how the ways law enforcement officers use technology may perpetuate flaws in the criminal justice system.  Several developments over the past month shed light on these considerations.

Privacy

The Fourth Amendment states “the right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause.” The warrant requirement for law enforcement officers conducting investigations in the physical world is well settled, even as the law surrounding exceptions to the warrant requirement is more complex. However, the extent of Fourth Amendment protection online and on devices is murkier.

The New York Times published an article discussing the patchwork of confusing, and often contradictory, laws around the country governing law enforcement’s warrantless use of cell phone data, including New York City’s practice of keeping cell phone theft victims’ phone data beyond the data need to investigate and prosecute the theft.  The New York City Police Department is also notorious for its “Stop and Frisk” practices.  According to the New York Civil Liberties Union, black and Latino New York residents “made up close to 90 percent of people stopped and about 88 percent of those stops were of innocent New Yorkers.”

To address the challenges of privacy and Fourth Amendment policy in the digital age, policymakers are considering legislation to amend the Electronic Communications Privacy Act (ECPA). ECPA, enacted in 1986, was designed to restrict the ability of the federal government to use computer data and stored electronic communications in investigations.  But ECPA currently requires no probable cause and no warrants for law enforcement to obtain things like stored photographs, data from Facebook pages, and draft documents shared with third parties like Dropbox and Google.

On Thursday, the Senate Judiciary Committee approved an amendment to ECPA that would require police to obtain a warrant before searching suspects’ emails.  The Senate is not anticipated to vote on the ECPA amendment until next year, but this is important progress toward ensuring the Fourth Amendment warrant requirement applies to data and devices.

Recording Police Activity

The past month has also seen an important development in the role personal audiovisual recordings might play in documenting police misconduct.

On Monday, the Supreme Court declined to review a Seventh Circuit ruling that the First Amendment includes the right to record the actions of police officers while they are on duty and in public. Illinois’ eavesdropping law had made recording police officers a felony punishable by up to 15 years in prison. The Seventh Circuit held that “the act of making an audio or audiovisual recording is necessarily included within the First Amendment’s guarantee of speech and press rights as corollary of the right to disseminate the resulting recording.”

Earlier this year, the City of Boston agreed to pay $170,000 in damages and legal fees to a man, Simon Glick, who was arrested for recording police officers in public. The settlement followed a First Circuit Court of Appeals unanimous ruling that Glick had a “constitutionally protected right to videotape police carrying out their duties in public.”

Prison Phone Justice

The families of inmates are silent victims.  Incarceration removes a reliable source of household income and separates parents from their children.  One aspect of the effect of incarceration on families is the stratospheric rates telephone companies charge for collect calls made by inmates.

One study conducted by the Southern Poverty Law Center of prison phone rates in Louisiana  found these fees to be 15 times higher (30 cents per minute versus 2 cents per minute) than they are for collect calls made outside prison walls.  In September, FCC Commissioner Clyburn urged FCC Chairman Genachowski to cut prison phone rates. On November 15^th, the FCC announced at a rally led by the Center for Media Justice that it would seek public comment on prison phone rates.  Congressmen Henry Waxman (D-CA) and Bobby Rush (D-IL) attended a screening of a new film entitled “Middle of Nowhere” on the Hill earlier this week.  The film depicts the inner conflicts a mother encounters while her husband is serving an eight-year sentence.

Far too many people of color are in prisons in the United States. That makes the use of information and communications technology by law enforcement a matter of particular interest to people of color. The developments discussed here show policymakers taking constructive steps to improve how the criminal justice system uses technology. But information technology—and its uses—evolve rapidly, which means we need careful oversight of how these tools are used in the criminal justice system.

Joseph Miller, Esq., is Deputy Director and Senior Policy Counsel for the Media and Technology Institute at the Joint Center for Political and Economic Studies. More information on Mr. Miller and his work can be found at the Joint Center website.

Fairness Within the Economic Recovery

by Wilhelmina A. Leigh, Ph.D.

June of this year will mark the third anniversary of the official end of The Great Recession, the month when the downturn bottomed out and the economy started to grow again.

With the recovery, as during the recession, however, disparities by race/ethnicity have persisted in economic outcomes such as employment, and will continue to do so unless determined efforts are made to reduce or eliminate them, and the impacts of these efforts are closely monitored.

The economic recovery is currently gaining steam.  During the fourth quarter of 2011, real U.S. gross domestic product, or GDP (the output of goods and services produced by labor and property located in the United States), increased at an annual rate of 3.0 percent.  This rate of growth was faster than at any point during the last year and a half and nearly equals the average annual growth rate of GDP over the last 60 years of 3.25 percent.  In addition, unemployment rates have declined even for groups such as African Americans, who were not seeing much of a decline earlier in the recovery.  In the wake of the recent recession, the unemployment rate for the nation peaked in October 2009 (at 10 percent), while the rate for African Americans did not reach its peak until August 2011 (at 16.7 percent).  In February 2012, the unemployment rate for African Americans was 14.1 percent, while the national rate was 8.3 percent.

How can we channel the economic recovery to more completely benefit all Americans?  One way is to monitor existing and new federal, state and local programs and policies for the extent to which they can and do foster economic equity among racial/ethnic groups. An analysis by PolicyLink of proposals in the 2013 Obama budget highlights programs that are promising in this regard. For example, the Partnership for Sustainable Communities—an interagency collaboration among the Department of Housing and Urban Development, Department of Transportation, and Environmental Protection Agency—would redevelop communities to reduce barriers for low-income households to access jobs, schools and affordable housing.  The Pathways Back to Work Fund, another 2013 budget proposal, would provide funding for subsidized employment and work-based training for low-income youth, the long-term unemployed and low-income adults. Among the wish list of programs that presidents’ budgets too often become, initiatives such as these should, first, be supported and then, once enacted, be monitored for their effectiveness.

Racial/ethnic economic disparities will not be lessened or eliminated without conscious action.  We justify not addressing these longstanding disparities during recessions because we lack resources to do so.  We cannot justify the failure to act during periods of economic growth. Thus, we should insist that such action is evident during the coming recovery.  As Alan Krueger, chairman of the President’s Council of Economic Advisers noted recently, “Restoring a greater degree of fairness to the U.S. job market would be good for businesses, good for the economy and good for the country.”

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.

This is Inner City…

by Joseph Miller, Esq.

“Don’t take away the music.  It’s the only thing I’ve got.  It’s my piece of the rock.” 

-        From the lyrics of Don’t Take Away the Music by Tavares.

“[T]he market shapes programming to a tremendous extent. Members of minority groups who own licenses might be thought, like other owners, to seek to broadcast programs that will attract and retain audiences, rather than programs that reflect the owner’s tastes and preferences.”

-        From Justice Sandra Day O’Connor’s Dissenting Opinion in Metro Broadcasting Inc. v. FCC, 497 U.S. 547 (1990)

When the walls started shaking at the Joint Center’s offices during last week’s earthquake, I was faced with one question: leave the building or stay inside?  Similarly, the seismic transformation of the broadcasting industry brought on by mobile devices, personal computers, and digital video recorders has presented new problems for broadcasters.  But Black-owned radio stations targeting African-American audiences are faced with their own fight or flight question:  Can they stay profitable by offering black-only programming?  What is the tipping point at which diversifying their programming will begin to alienate their listener base?

Earlier this week, Inner City Media Corporation’s creditors filed an involuntary Chapter 11 bankruptcy petition against it. Inner City Media Corporation is the holding company of Inner City Broadcasting, one of the nation’s leading black-owned broadcasters and owner of WBLS-FM/WLIB-AM in New York City.  Inner City’s creditors claim that it owes some $254 million.

Inner City Broadcasting is rooted in the civil rights movement.  The late Percy Sutton, former attorney to Malcolm X and a former Manhattan Borough President; and Clarence Jones, former publisher of The New York Amsterdam News, one of the oldest black-owned newspapers in the United States, founded the company in 1970.  WBLS has been home to legendary black radio personalities like Hal Jackson, Frankie Crocker, Wendy Williams and DJ Red Alert.  WLIB has changed formats many times over the years, but it too has featured notable personalities including Betty Shabazz, Malcolm X’s widow; and Rev. Al Sharpton.  Inner City owns 15 other stations in San Francisco, CA, Columbia, SC, and Jackson, MS.

Inner City’s failure to repay its debt could be attributed to any number of causes, such as poor financial management.   But saying that poor financial management is the sole culprit, and leaving it there, does little to address the issue of why Inner City’s stations have failed to generate enough revenue to pay the bills.

Let’s take WBLS as an example.

WBLS’ Glass Ceiling

WBLS has hit a glass ceiling.  Barring a complete revamping of its format to include more mainstream content, it appears that WBLS has attained the highest ranking possible with an urban adult contemporary (Urban AC) format in New York.  According to Arbitron, the Urban AC format is the most popular format among African-Americans.  It features music by artists such as Maze Featuring Frankie Beverly, Earth, Wind & Fire Marvin Gaye, R. Kelly, Alicia Keys, Eric Benet, Ne-Yo and Usher.  The “average quarter hour” (AQH) rating of a radio station is the average percentage of a population being measured listening to a radio station for at least five minutes during a 15-minute period.  With a 3.6% AQH overall rating, WBLS is the number one station in New York targeting a predominantly black audience.  It also ranks #8 among all radio stations in the New York metro area.  WLIB, WBLS’ sister station, ranks 34^th, with a .4 AQH rating.

WBLS’ closest competitor, Emmis Communications’ WRKS-FM (98.7 Kiss FM)—the only other Urban AC station in the market—is ranked at a distant #16 overall.  But Kiss is half of Emmis’ combo which includes WQHT-FM (Hot 97), an urban station that skews toward the 18-34 demographic with hip-hop and r&b artists.  Hot 97 posted a 3.3% AQH share in July, placing it at #12 in the overall rankings.  But with the ratings of Kiss and Hot 97 combined, Emmis is actually pulling a 6.2% AQH overall rating, compared to a 4.0 combined rating for Inner City’s WBLS/WLIB combo.

Further, Inner City has been hauled into bankruptcy, while its publically traded counterpart is carrying a similar long-term debt load without repercussions.  The $254 million that Inner City owes to Yucaipa Cos. and others does not appear to be that unusual.  Not taking into account other liabilities, Inner City’s debt-per-station based on the $254 million alone is $14.9 million. At the end of 2Q’11, Emmis held long term debt obligations of $327.2 million.  Spread across Emmis’ 22-station portfolio, its debt-per-station is $14.8 million, just $100, 000 shy of Inner City’s obligation.

Should WBLS Change Formats to Increase Inner City’s Revenue?

Radio stations change formats all the time.  If a particular format is not working, most station owners are generally not averse to abruptly switching formats.  For example, the radio station at 101.9 FM in the New York Metro area, also owned by Emmis, has changed formats four times over the past seven years.  In 2004, the station switched from Smooth Jazz (Kenny G, Sade, Yellowjackets, Anita Baker) to an electronic/ambient music format (Massive Attack, Thievery Corporation).  It switched back to Smooth Jazz in 2005 and, in 2008, flipped to Rock (Kings of Leon, Pearl Jam, Black Crowes, Blink 182).  Finally, on August 12^th of this year, the station changed formats (and owners) yet again, switching to an all-News format.

Inner City is no stranger to programming formats targeting non-African-American audiences.  Among Inner City’s 15 other stations, only 6 target African-Americans specifically.  Inner City’s station portfolio also includes progressive talk, rock, classic rock (Allman Brothers, Rolling Stones, The Beatles, the Yardbirds), oldies (Elvis Presley, The Beach Boys, The Supremes, The Four Seasons, and Sam Cooke), Chinese-language, Vietnamese-language, and two sports talk, ESPN Radio affiliates.

But what is often a business-as-usual decision to change formats carries an additional layer of complexity for black-oriented stations.  As in the case of WBLS, radio stations targeting a predominantly African-American audience are often intimately tied to the very heritage of the communities they serve.  In our communities, having the ability to listen to black music, on radio stations owned by people who look like us, with credible air personalities we can relate to, is often about much more than entertainment.  In an era of high unemployment, mortgage foreclosures, disproportionate incarceration rates, and widening achievement gaps in education, listening to black-oriented radio has a cathartic effect.

WBLS could change formats, but why should it?  Arbitron reports a .5 percent increase in the number of African-Americans who listen to Adult Contemporary radio stations (Eric Clapton, Whitney Houston, Chicago, and Christopher Cross) since Fall of 2009.  It also reports an increase in the number of Blacks who listen to Pop Contemporary Hits (Ke$ha, Lady Gaga, Bruno Mars, Pink, Black Eyed Peas).  But this is far from a death-knell for black radio.  Radio stations targeting mainstream audiences have diversified their playlists, but black-oriented radio stations have not.

Those African-Americans that listen to both black-oriented stations and mainstream stations are signaling a desire for more diverse content.  Their behavior indicates an impulse to seek out contexts that communicate—as Pepper Miller of the Hunter-Miller group describes it—“a universal situation … living parallel to mainstream” rather than isolated in a silo with no mass appeal relevance.  This does not require black-oriented stations to change formats completely.  But what it does require is learning a lot more about black listeners who are less loyal to Urban AC formats, and addressing some of their programming needs.  If Inner City doesn’t do it, someone else will, and it is starting to look more and more like that may very well be the scenario.

Joseph Miller, Esq. is Deputy Director and Senior Policy Director for the Media and Technology Institute for the Joint Center for Political and Economic Studies.

It’s Time to Focus on Poverty and Inequality to improve our National Security and Prosperity

Brian D. Smedley, Ph.D.

Brian D. Smedley, Ph.D.

The U.S. Census Bureau released chilling statistics this week:  nearly one in six Americans is living in poverty.  The number of Americans with incomes below the official poverty line ($22,314 for a family of four) rose by 2.6 million in 2010 to 46.2 million.

The poverty rate in 2010 reached its second-highest point since 1965, median income declined, and the number of Americans without health insurance reached record highs.

Nearly one in 10 children (9.9 percent) fell below half of the poverty line in 2010, up from 9.3 percent in 2009.  Disproportionately, children of color are poor:  over one-third of black children (39.1 percent) and Hispanic children (35.0 percent) are living in poverty.

New research released by the Joint Center for Political and Economic Studies also shows that the number of Americans living in neighborhoods with a high proportion of poor residents is at a record high:  over 22 million Americans live in these neighborhoods, and doing so typically keeps them poor because of their limited access to good schools, good jobs, and good capital.  (link to report:  http://jointcenter.org/research/a-lost-decade-neighborhood-poverty-and-the-urban-crisis-of-the-2000s)

Those living in high-poverty neighborhoods are disproportionately people of color.  And the concentration of people of color in racially- and economically-segregated neighborhoods is a major driver of the health inequalities that many minorities experience relative to whites, which span from the cradle to the grave.  A second report released last week by the Joint Center shows that metropolitan areas with the highest levels of segregation also experience the worst health inequalities, as measured by rates of infant mortality.  Were people of color and whites integrated, over 2,800 black infant deaths could have been averted in  2008.  (link to report:  http://www.jointcenter.org/research/segregated-spaces-risky-places-the-effects-of-racial-segregation-on-health-inequalities)

Clearly, the issue of poverty – and particularly the concentration of people of color in poor neighborhoods – needs more national attention.  Poverty and inequality are arguably a greater threat to our security and prosperity than any outside our nation’s borders.

The good news is that – be seated, now – government can help.

The level of hardship we see now would have been much worse if not for key federal programs such as unemployment insurance, the Earned Income Tax Credit, food stamps, and Medicaid. Without unemployment insurance, for instance, 3.2 million more Americans would have fallen into poverty.  And the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 1.0 million and 2.9 million jobs as of June 2010.

As the deficit-busting “Super Committee” convenes, they should prioritize public sector investments that help people survive the economic downturn.

Dr. Brian D. Smedley is Vice President and Director of the Health Policy Institute of the Joint Center for Political and Economic Studies in Washington, DC.  More information on Dr. Smedley and his work can be found at the Joint Center website.

And What About Tax Expenditures in Deficit Reduction?

by Wilhelmina A. Leigh, Ph.D.

The Budget Control Act of 2011 (P.L. 112-25), signed into law on August 2, 2011, mandates that a Joint Select Committee on Deficit Reduction be constituted (with 12 members of Congress) to identify ways to cut $1.5 trillion from the federal budget over the next 10 fiscal years (2012-2021).  The available options for achieving this goal are reducing spending, increasing taxes, and reducing tax expenditures.  While it is usually straightforward to determine who will bear the brunt of proposals to cut spending or raise taxes, it is more difficult to make this determination with proposals to reduce tax expenditures.

Tax expenditures are the deductions, exemptions, or credits allowed via the U.S. tax code to subsidize certain politically and socially desirable activities.  These expenditures primarily benefit individuals with higher incomes.  However, choosing to reduce the federal budget by paring the most costly tax expenditures is likely to have undesired consequences for lower-income populations and for African Americans and Latinos, two groups who are disproportionately low-income.

The two most costly tax expenditures are the exclusion from taxation of employer contributions for medical insurance premiums and for medical care and the deductibility from individual income of mortgage interest paid on owner-occupied homes.  According to the Office of Management and Budget, between fiscal years 2011 and 2015, these tax expenditures are projected to account for $1.7 trillion in forgone revenue—$1.05 trillion from the exclusion of medical premiums and $0.64 trillion from the deduction of mortgage interest.  

Removing or reducing the tax advantage of employer-sponsored medical insurance could reduce the likelihood that workers have health insurance. According to the Kaiser Commission on Medicaid and the Uninsured, in 2009, two of every five among the 40 million workers with annual income less than $20,000 had employer-sponsored coverage, in contrast to 86 percent of the 60.2 million workers with incomes of $40,000 or more.  Thus, though employers’ responses to changes in this feature of the tax code would affect a greater number of higher-income workers, 16 million low-wage workers could be affected as well.

Limiting the ability to deduct home mortgage interest payments from taxable income could reduce the incentive to own a home, the major form of wealth among U.S. households.  A recent study by the Pew Research Center found that in 2009, among white households, home equity constituted 38 percent of net worth (defined as assets minus liabilities/debts).  Home equity accounted for greater shares of wealth among African American households (56 percent) and Latino households (55 percent), even after accounting for losses due to the Great Recession.  Thus, reducing the incentive to own a home could disproportionately reduce the wealth of African Americans and Latinos.

Like the path to deficit buildup, the path to deficit reduction will be long and winding.  As we embark on this path, we should be alert to the possible consequences of all proposals for persons at lower income levels.

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.

Can a Two-Legged Stool Stand?

by Wilhelmina A. Leigh, Ph.D.
originally published in The Florida Courier

For today’s working adults, retirement is more likely to be based on the safety-net level of benefits from Social Security, supplemented with personal savings and investment.

The catch is, however, that too many African-Americans are saving too little for retirement.  The fact that 70 percent of African-American workers had saved less than $25,000 for retirement, according to a 2007 survey by the Employment Benefit Research Institute, suggests there will be little “gold” in our golden years.

The ‘stool’

Traditionally, retirement income has come from three sources – Social Security, employer pensions, and personal savings and investment –a three-legged stool.  The ongoing, gradual disappearance of employer-sponsored defined benefit pensions (that provide a monthly payout based on years worked and salary level) and their replacement by employer-sponsored defined contribution retirement plans (that provide retirement income based on the amount of employee contributions while working) suggests, however, that the retirement income stool will soon have only two legs.  One leg will be Social Security, and the other will be personal savings and investment – both through an employer and independent of employment.

Nearly two of every five African-Americans in a 2009 Joint Center poll indicated that they expected Social Security to be a major source of income during their retirement.  This expected major source of retirement income, however, provided average monthly retirement benefits at the end of 2009 of only $1,120 for African-American males and $960.50 for African-American females.  These monthly average benefits generate an annual income of $10,458 – slightly greater than the federal poverty threshold for persons 65 years and older.

Problems coming

Over the next 75 years, if no modifications are made to the Social Security program, payments will fall below their already modest levels.  Because FICA taxes paid into the Social Security system by workers in a given year are expended that same year to fulfill obligations to current beneficiaries, the retiring of the large Baby Boomers born between 1946 and 1964; increased life expectancy of the “older” old; and declining birth rates – threaten the solvency of Social Security.

Employer pensions and retirement plans do not look especially promising for African-Americans, who are more likely to be unemployed and underemployed than other racial/ethnic groups – a fact that has been unchanged for many decades.

When employed, African-Americans are hit hard by the shrinking availability of employer-sponsored retirement plans. Though more than half (56 percent) of Black workers ages 25-59 were offered retirement plans or pensions by their employers in 2009; less than half (45 percent) actually enrolled in them.  In addition, low-income earners – among whom African-Americans are overrepresented – are less likely than high-income earners to be offered employer retirement plans.

African-American workers constitute 20 percent of the low-income labor force –individuals whose earnings are less than the federal poverty level even though they are employed for 27 or more weeks per year – in contrast to the 11 percent they make up of the workforce at all income levels. Personal saving and investment independent of employment (for example, Individual Retirement Accounts) become the major source of income to supplement Social Security retirement benefits.

Income is critical

A key issue is having the disposable income to save.  A 2009 Joint Center poll found that 53 percent of African-Americans at all income levels – and 65 percent with income of $35,000 or less – wanted to save but did not have enough money to.  This same poll found that African-Americans are less likely than Whites to have invested in IRAs (28 percent vs. 47 percent), in stocks or mutual funds (27 percent vs. 49 percent), or in bonds (17 percent vs. 27 percent).

Raising our current retirement income status from only 30 percent who have saved $25,000 or more for their retirement should become a priority for African-Americans.  Otherwise, our definition of retirement may become confined to working either full-time or part-time until the day we die – or eking out an existence on Social Security benefits alone.

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.