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News roundup: Jan 2015
January 22, 2015

Our topic this month is income inequality in our country: what an uber-one percenter thinks about the topic; the growth in suburban poverty; the impact of child care costs on low-income families.

Suburbs and the New American Poverty, by Alana Semuels, The Atlantic

About 20 million Americans lived in poverty in 2000, and they were about equally divided between cities and suburbs. But in a little more than a decade, suburban poverty growth has surpassed urban poverty growth. According to the Brookings Institution there are 16.5 million poor people in American’s suburbs and about 13.5 million in its cities.  

Semuels's article focuses on poverty in the suburbs of Atlanta, the chart (right) indicates the trend is national. Poor people choose the suburbs for the same reasons others do – better schools, lower crime rates, quieter neighborhoods, more space. But the suburbs are harsher for those in poverty – public transportation is less reliable or accessible, and social services are fewer or nonexistent. Our Beacon Family Housing Initiative would address this need.

Excerpt: “An increasing number of Americans are just one crisis away from poverty, according to the Brookings Institution. Nearly half of households in the U.S. have less than three months worth of savings.”

Fact of the week: Child care cost is nearly half of income for a family at the poverty level, by Lecia Imbery, Coalition on Human Needs

Child care eats up young families’ budgets. A family of 3 at the poverty level ($19,800 income a year – more than one full-time minimum wage job's worth) would pay half of their income for child care. With many families at this income level also paying more than 30 percent of income in rent, that doesn’t leave much left over for food, health care, transportation, clothing – much less anything like a birthday party, a camping trip or even a haircut.

Excerpt: "Because 60 percent of costs for child care and early education in the U.S. are paid for directly by parents – unlike all other areas of education, including higher education – the burden is especially hard on low-income families."

Why Inequality Matters by Bill Gates, gatesnotes.com

Bill Gates, maybe the nation’s uber-one-percenter, reviews Thomas Piketty’s book Capital in the 21st Century and shares what aspects of income inequality bother him the most; why taxing consumption, not labor, would help to close the gap; and why the children of people like him should pay estate taxes.

Excerpt: "Extreme inequality should not be ignored—or worse, celebrated as a sign that we have a high-performing economy and healthy society. Yes, some level of inequality is built in to capitalism. As Piketty argues, it is inherent to the system. The question is, what level of inequality is acceptable? And when does inequality start doing more harm than good? That’s something we should have a public discussion about."