Structural adjustment for the middle class?

Working people in the US have suffered big economic losses in the past four years.  Losses of jobs in the economy have pushed many working people from high-wage to low-wage jobs, and as we all know, many people have been pushed out of jobs altogether.  The national unemployment rate was 8.6% in November, and very much higher in urban areas and African-American and Latino communities.  Michigan's rate was 10.6% in October 2011 (link).  White non-Hispanic households fell from $55,360 in 2009 to $54,620 (-1.3%), while black households fell from $33,122 to $32,068 (-3.2%) (Table 1).  These differences in household income across race are stunning: black households started out at only 63% the level of white households in 2009, and they fell by more than double the percentage rate of loss from 2009 to 2010.

Here is a report from the US Census Bureau,  Income, Poverty, and Health Insurance Coverage in the United States: 2010, that sheds some light on the changes of the past several years.  Here are a few important summary findings:

• Real median household income was $49,445 in 2010, a 2.3 percent decline from 2009 (Figure 1 and Table 1).
• Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred in 1999 (Figure 1 and Tables A-1 and A-2).3
• Both family and nonfamily households had declines in real median income between 2009 and 2010. The income of family households declined by 1.2 percent to $61,544; the income of nonfamily households declined by 3.9 percent to $29,730 (Table 1).
• Real median income declined for White and Black households between 2009 and 2010, while the changes for Asian and Hispanic-origin households were not statistically significant (Table 1).
• Real median household income for each race and Hispanic-origin group has not yet recovered to the pre-2001 recession all-time highs (Table A-1). (5)

Here is what real median income looks like, broken down by racial group, since 1967.

Now consider the poverty statistics the report contains.  Here is a summary graph:

The national poverty rate reached a forty-year low in 2000, at about 12%.  Through the decade, however, the national rate has grown to 15.1% in 2010, representing 46.2 million people.  Here again there is a stunningly wide gap between white and black populations.  The poverty rate in 2010 for white non-Hispanic households is 9.9%, while the rate for black households in 2010 is 27.4% (Table 4).

We've tended to think of this period as a difficult economic time that will eventually come to an end.  But perhaps that's too optimistic.  Perhaps what we are witnessing is a structural adjustment of the US labor market, with a permanent downward shift in income for middle and low income people.  And perhaps these shifts will be most extreme for African-American households.  (The past decade seems to bear this out.  From 2000 to 2010 white non-Hispanic households had declined 5.5%, while black households declined 14.6% during that same period (8).)

Here the concern is that maybe Bruce Springsteen was right -- "these jobs are going, boys, and they ain't coming back to your hometown."  Jobs with decent wages -- manufacturing jobs, union jobs, professional service jobs -- have declined precipitously in the past twenty years (not just since the recession).  And that means that the opportunities for many workers to have "middle-class" incomes have become much more restricted. Here is a sober report from Chemical and Engineering News --

The severe national recession of the past several years is having a negative impact on the employment and the starting salaries of chemists and chemical engineers. The latest data from the American Chemical Society on graduates from 2009 found that median starting salaries fell about 5% for those receiving bachelor’s and doctoral degrees compared with the previous year. New graduates with master’s degrees appeared to have gotten a jump in pay.

Even the banking and financial sector has contracted (link):

The financial services industry, hammered by job cuts and record losses, is in for an even bigger contraction as the global recession deepens, said Marc Faber, publisher of the Gloom, Boom & Doom Report. 

“The financial sector will contract and it will contract much more than we’ve seen so far,” said Faber, who was in Tokyo to speak at an event hosted by CLSA Ltd. Financial professionals have “been in paradise for the past 25 years.”

More than 275,000 jobs in the financial industry have been lost in the last two years, according to Bloomberg data, while losses and writedowns at global companies exceeded $1 trillion in the past year. Faber said the contraction could rival declines seen in the 1970s following the collapse of Bernard Cornfeld’s Investors Overseas Services that shook confidence in the industry for a decade.

So the financial industry isn't providing ready opportunities for young MBAs; many of them too will need to find other, less well-paying jobs.

Does this mean that everyone in the US economy is facing downward pressure on wages and salary? Not exactly.  There is a segment of the American economy that is doing very well indeed. Here is a graph provided by Lane Kenworthy demonstrating the growth in income of the top 1% (link).  (Kenworthy's discussion is very good.)  The top line is the median household income of the top 1%.  The lower lines, showing virtually no growth, represent the median of the middle three quintiles and the median of the bottom quintile of households.

source: Consider the Evidence (Lane Kenworthy)

So here are two important questions.  Is the US economy on a path towards a shift to lower-paid jobs for a large segment of its working population?  And are there policies that could be chosen that would result in an outcome that looks more fair than this graph of the recent past, with reasonable growth of income for all American workers and less extreme growth at the very top?

(Here is an interesting Google resource, the Public Data Explorer, that provides visualization tools for basic US economic and demographic data. This particular screen shows the growth of personal income per capita since about 1930, across the regions of the United States.  (This is money income, not adjusted for inflation.) The second graph shows personal income per capita for selected metropolitan areas.  The third graph shows the unemployment rates for Wayne County and Oakland County in Michigan.)

Structural adjustment for the middle class?

Working people in the US have suffered big economic losses in the past four years.  Losses of jobs in the economy have pushed many working people from high-wage to low-wage jobs, and as we all know, many people have been pushed out of jobs altogether.  The national unemployment rate was 8.6% in November, and very much higher in urban areas and African-American and Latino communities.  Michigan's rate was 10.6% in October 2011 (link).  White non-Hispanic households fell from $55,360 in 2009 to $54,620 (-1.3%), while black households fell from $33,122 to $32,068 (-3.2%) (Table 1).  These differences in household income across race are stunning: black households started out at only 63% the level of white households in 2009, and they fell by more than double the percentage rate of loss from 2009 to 2010.

Here is a report from the US Census Bureau,  Income, Poverty, and Health Insurance Coverage in the United States: 2010, that sheds some light on the changes of the past several years.  Here are a few important summary findings:

• Real median household income was $49,445 in 2010, a 2.3 percent decline from 2009 (Figure 1 and Table 1).
• Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred in 1999 (Figure 1 and Tables A-1 and A-2).3
• Both family and nonfamily households had declines in real median income between 2009 and 2010. The income of family households declined by 1.2 percent to $61,544; the income of nonfamily households declined by 3.9 percent to $29,730 (Table 1).
• Real median income declined for White and Black households between 2009 and 2010, while the changes for Asian and Hispanic-origin households were not statistically significant (Table 1).
• Real median household income for each race and Hispanic-origin group has not yet recovered to the pre-2001 recession all-time highs (Table A-1). (5)

Here is what real median income looks like, broken down by racial group, since 1967.

Now consider the poverty statistics the report contains.  Here is a summary graph:

The national poverty rate reached a forty-year low in 2000, at about 12%.  Through the decade, however, the national rate has grown to 15.1% in 2010, representing 46.2 million people.  Here again there is a stunningly wide gap between white and black populations.  The poverty rate in 2010 for white non-Hispanic households is 9.9%, while the rate for black households in 2010 is 27.4% (Table 4).

We've tended to think of this period as a difficult economic time that will eventually come to an end.  But perhaps that's too optimistic.  Perhaps what we are witnessing is a structural adjustment of the US labor market, with a permanent downward shift in income for middle and low income people.  And perhaps these shifts will be most extreme for African-American households.  (The past decade seems to bear this out.  From 2000 to 2010 white non-Hispanic households had declined 5.5%, while black households declined 14.6% during that same period (8).)

Here the concern is that maybe Bruce Springsteen was right -- "these jobs are going, boys, and they ain't coming back to your hometown."  Jobs with decent wages -- manufacturing jobs, union jobs, professional service jobs -- have declined precipitously in the past twenty years (not just since the recession).  And that means that the opportunities for many workers to have "middle-class" incomes have become much more restricted. Here is a sober report from Chemical and Engineering News --

The severe national recession of the past several years is having a negative impact on the employment and the starting salaries of chemists and chemical engineers. The latest data from the American Chemical Society on graduates from 2009 found that median starting salaries fell about 5% for those receiving bachelor’s and doctoral degrees compared with the previous year. New graduates with master’s degrees appeared to have gotten a jump in pay.

Even the banking and financial sector has contracted (link):

The financial services industry, hammered by job cuts and record losses, is in for an even bigger contraction as the global recession deepens, said Marc Faber, publisher of the Gloom, Boom & Doom Report. 

“The financial sector will contract and it will contract much more than we’ve seen so far,” said Faber, who was in Tokyo to speak at an event hosted by CLSA Ltd. Financial professionals have “been in paradise for the past 25 years.”

More than 275,000 jobs in the financial industry have been lost in the last two years, according to Bloomberg data, while losses and writedowns at global companies exceeded $1 trillion in the past year. Faber said the contraction could rival declines seen in the 1970s following the collapse of Bernard Cornfeld’s Investors Overseas Services that shook confidence in the industry for a decade.

So the financial industry isn't providing ready opportunities for young MBAs; many of them too will need to find other, less well-paying jobs.

Does this mean that everyone in the US economy is facing downward pressure on wages and salary? Not exactly.  There is a segment of the American economy that is doing very well indeed. Here is a graph provided by Lane Kenworthy demonstrating the growth in income of the top 1% (link).  (Kenworthy's discussion is very good.)  The top line is the median household income of the top 1%.  The lower lines, showing virtually no growth, represent the median of the middle three quintiles and the median of the bottom quintile of households.

source: Consider the Evidence (Lane Kenworthy)

So here are two important questions.  Is the US economy on a path towards a shift to lower-paid jobs for a large segment of its working population?  And are there policies that could be chosen that would result in an outcome that looks more fair than this graph of the recent past, with reasonable growth of income for all American workers and less extreme growth at the very top?

(Here is an interesting Google resource, the Public Data Explorer, that provides visualization tools for basic US economic and demographic data. This particular screen shows the growth of personal income per capita since about 1930, across the regions of the United States.  (This is money income, not adjusted for inflation.) The second graph shows personal income per capita for selected metropolitan areas.  The third graph shows the unemployment rates for Wayne County and Oakland County in Michigan.)

Structural adjustment for the middle class?

Working people in the US have suffered big economic losses in the past four years.  Losses of jobs in the economy have pushed many working people from high-wage to low-wage jobs, and as we all know, many people have been pushed out of jobs altogether.  The national unemployment rate was 8.6% in November, and very much higher in urban areas and African-American and Latino communities.  Michigan's rate was 10.6% in October 2011 (link).  White non-Hispanic households fell from $55,360 in 2009 to $54,620 (-1.3%), while black households fell from $33,122 to $32,068 (-3.2%) (Table 1).  These differences in household income across race are stunning: black households started out at only 63% the level of white households in 2009, and they fell by more than double the percentage rate of loss from 2009 to 2010.

Here is a report from the US Census Bureau,  Income, Poverty, and Health Insurance Coverage in the United States: 2010, that sheds some light on the changes of the past several years.  Here are a few important summary findings:

• Real median household income was $49,445 in 2010, a 2.3 percent decline from 2009 (Figure 1 and Table 1).
• Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred in 1999 (Figure 1 and Tables A-1 and A-2).3
• Both family and nonfamily households had declines in real median income between 2009 and 2010. The income of family households declined by 1.2 percent to $61,544; the income of nonfamily households declined by 3.9 percent to $29,730 (Table 1).
• Real median income declined for White and Black households between 2009 and 2010, while the changes for Asian and Hispanic-origin households were not statistically significant (Table 1).
• Real median household income for each race and Hispanic-origin group has not yet recovered to the pre-2001 recession all-time highs (Table A-1). (5)

Here is what real median income looks like, broken down by racial group, since 1967.

Now consider the poverty statistics the report contains.  Here is a summary graph:

The national poverty rate reached a forty-year low in 2000, at about 12%.  Through the decade, however, the national rate has grown to 15.1% in 2010, representing 46.2 million people.  Here again there is a stunningly wide gap between white and black populations.  The poverty rate in 2010 for white non-Hispanic households is 9.9%, while the rate for black households in 2010 is 27.4% (Table 4).

We've tended to think of this period as a difficult economic time that will eventually come to an end.  But perhaps that's too optimistic.  Perhaps what we are witnessing is a structural adjustment of the US labor market, with a permanent downward shift in income for middle and low income people.  And perhaps these shifts will be most extreme for African-American households.  (The past decade seems to bear this out.  From 2000 to 2010 white non-Hispanic households had declined 5.5%, while black households declined 14.6% during that same period (8).)

Here the concern is that maybe Bruce Springsteen was right -- "these jobs are going, boys, and they ain't coming back to your hometown."  Jobs with decent wages -- manufacturing jobs, union jobs, professional service jobs -- have declined precipitously in the past twenty years (not just since the recession).  And that means that the opportunities for many workers to have "middle-class" incomes have become much more restricted. Here is a sober report from Chemical and Engineering News --

The severe national recession of the past several years is having a negative impact on the employment and the starting salaries of chemists and chemical engineers. The latest data from the American Chemical Society on graduates from 2009 found that median starting salaries fell about 5% for those receiving bachelor’s and doctoral degrees compared with the previous year. New graduates with master’s degrees appeared to have gotten a jump in pay.

Even the banking and financial sector has contracted (link):

The financial services industry, hammered by job cuts and record losses, is in for an even bigger contraction as the global recession deepens, said Marc Faber, publisher of the Gloom, Boom & Doom Report. 

“The financial sector will contract and it will contract much more than we’ve seen so far,” said Faber, who was in Tokyo to speak at an event hosted by CLSA Ltd. Financial professionals have “been in paradise for the past 25 years.”

More than 275,000 jobs in the financial industry have been lost in the last two years, according to Bloomberg data, while losses and writedowns at global companies exceeded $1 trillion in the past year. Faber said the contraction could rival declines seen in the 1970s following the collapse of Bernard Cornfeld’s Investors Overseas Services that shook confidence in the industry for a decade.

So the financial industry isn't providing ready opportunities for young MBAs; many of them too will need to find other, less well-paying jobs.

Does this mean that everyone in the US economy is facing downward pressure on wages and salary? Not exactly.  There is a segment of the American economy that is doing very well indeed. Here is a graph provided by Lane Kenworthy demonstrating the growth in income of the top 1% (link).  (Kenworthy's discussion is very good.)  The top line is the median household income of the top 1%.  The lower lines, showing virtually no growth, represent the median of the middle three quintiles and the median of the bottom quintile of households.

source: Consider the Evidence (Lane Kenworthy)

So here are two important questions.  Is the US economy on a path towards a shift to lower-paid jobs for a large segment of its working population?  And are there policies that could be chosen that would result in an outcome that looks more fair than this graph of the recent past, with reasonable growth of income for all American workers and less extreme growth at the very top?

(Here is an interesting Google resource, the Public Data Explorer, that provides visualization tools for basic US economic and demographic data. This particular screen shows the growth of personal income per capita since about 1930, across the regions of the United States.  (This is money income, not adjusted for inflation.) The second graph shows personal income per capita for selected metropolitan areas.  The third graph shows the unemployment rates for Wayne County and Oakland County in Michigan.)

Is justice a security issue?

Most people would probably say they would prefer to live in a more just world to a less just one. There is a strong moral basis for preferring justice. But is this a consideration that states and large international organizations need to take into account as they design their strategies and plans for serving their present and future interests? Do national governments have good practical reasons to think about the consequences their policies and actions may have on the circumstances of justice in the world? What about policies and actions through which states attempt to secure their future economic wellbeing -- do policy makers need to pay attention to the social justice consequences of these actions?

There is a strong empirical and historical case for thinking that the answer to this question is "yes." Injustice is a source of resentment, indignation, and conflict. In the long run, the victims of injustice will not be ignored. Justice is a security issue for states and supra-national organizations, and simple prudence demands that policy makers take it into account. To put a simple label on this idea, justice is a security issue.

Here is a European Union statement about its longterm interests that makes this point fairly explicitly (link):

In the context of ever-increasing globalisation, the internal and external aspects of security are inextricably linked. Flows of trade and investment, the development of technology and the spread of democracy have brought prosperity and freedom to many people, while others have perceived globalisation as a cause of frustration and injustice. In much of the developing world, poverty and diseases such as AIDS give rise to security concerns, and in many cases economic failure is linked to political problems and violent conflict. Security is a precondition for development. Competition for natural resources is likely to create further turbulence. Energy dependence is a special concern for Europe.

What are the theoretical and historical arguments for this conclusion? Here are several.

On the side of theory, several points are well established. Chronic and unrelieved poverty leaves people with low attachment to their own societies and less for the global community. The frustration of very basic human needs is bound to fuel indignation and resistance. So poverty and deprivation are causes of resistance. But there is also evidence that inequality itself has negative consequences for a society's health; this is the central finding of The Spirit Level: Why Greater Equality Makes Societies Stronger (link). Finally, the social psychology created by a system that is perceived to be unfair and exploitative is likely to breed resistance and lawless action. Barrington Moore, Jr. was right when in Injustice he wrote:

Without strong moral feelings and indignation human beings will not act against the social order. In this sense moral convictions become an equally necessary element for changing the social order, along with alterations in the economic structure. 469

Gareth Stedman-Jones summarizes Barrington Moore's conclusion in these terms: "His argument is that human beings in stratified societies accept hierarchies of authority, so long as these hierarchies are not merely imposed by force, but based upon an 'unwritten' social contract, which binds together dominant and subordinate groups in a set of mutual obligations" (link).

So there are good empirical reasons, based in social psychology and the study of contentious politics, for expecting that injustice breeds conflict.

Are there historical demonstrations of the consequences of injustice for disorder? There are. We have the examples of slave revolts throughout the Americas in the 18th and 19th centuries; anti-colonial movements in Africa and Asia following World War II; the sustained resistance of the Burmese and East Timor peoples to dictatorship; and the sustained struggle for equal rights in the United States by African Americans, sometimes punctuated by major urban riots. In each case a set of social institutions had been created that were profoundly unjust for a sizable population, and this population gathered resolve and courage in opposing those arrangements.

So the conclusion seems clear. If we want to have a world in which there is a sustainable level of the rule of law and a low level of social conflict, we need to invest in justice. We need to work to create a system in which all peoples can satisfy their most basic human needs; where everyone can feel that he/she is respected in her humanity; and where no one judges that the basic structure of social life is exploitative.

In other words, states are well advised to actively include the basic requirements of justice in their plans for the future. Otherwise they are simply creating the tinder for future conflict.

Is justice a security issue?

Most people would probably say they would prefer to live in a more just world to a less just one. There is a strong moral basis for preferring justice. But is this a consideration that states and large international organizations need to take into account as they design their strategies and plans for serving their present and future interests? Do national governments have good practical reasons to think about the consequences their policies and actions may have on the circumstances of justice in the world? What about policies and actions through which states attempt to secure their future economic wellbeing -- do policy makers need to pay attention to the social justice consequences of these actions?

There is a strong empirical and historical case for thinking that the answer to this question is "yes." Injustice is a source of resentment, indignation, and conflict. In the long run, the victims of injustice will not be ignored. Justice is a security issue for states and supra-national organizations, and simple prudence demands that policy makers take it into account. To put a simple label on this idea, justice is a security issue.

Here is a European Union statement about its longterm interests that makes this point fairly explicitly (link):

In the context of ever-increasing globalisation, the internal and external aspects of security are inextricably linked. Flows of trade and investment, the development of technology and the spread of democracy have brought prosperity and freedom to many people, while others have perceived globalisation as a cause of frustration and injustice. In much of the developing world, poverty and diseases such as AIDS give rise to security concerns, and in many cases economic failure is linked to political problems and violent conflict. Security is a precondition for development. Competition for natural resources is likely to create further turbulence. Energy dependence is a special concern for Europe.

What are the theoretical and historical arguments for this conclusion? Here are several.

On the side of theory, several points are well established. Chronic and unrelieved poverty leaves people with low attachment to their own societies and less for the global community. The frustration of very basic human needs is bound to fuel indignation and resistance. So poverty and deprivation are causes of resistance. But there is also evidence that inequality itself has negative consequences for a society's health; this is the central finding of The Spirit Level: Why Greater Equality Makes Societies Stronger (link). Finally, the social psychology created by a system that is perceived to be unfair and exploitative is likely to breed resistance and lawless action. Barrington Moore, Jr. was right when in Injustice he wrote:

Without strong moral feelings and indignation human beings will not act against the social order. In this sense moral convictions become an equally necessary element for changing the social order, along with alterations in the economic structure. 469

Gareth Stedman-Jones summarizes Barrington Moore's conclusion in these terms: "His argument is that human beings in stratified societies accept hierarchies of authority, so long as these hierarchies are not merely imposed by force, but based upon an 'unwritten' social contract, which binds together dominant and subordinate groups in a set of mutual obligations" (link).

So there are good empirical reasons, based in social psychology and the study of contentious politics, for expecting that injustice breeds conflict.

Are there historical demonstrations of the consequences of injustice for disorder? There are. We have the examples of slave revolts throughout the Americas in the 18th and 19th centuries; anti-colonial movements in Africa and Asia following World War II; the sustained resistance of the Burmese and East Timor peoples to dictatorship; and the sustained struggle for equal rights in the United States by African Americans, sometimes punctuated by major urban riots. In each case a set of social institutions had been created that were profoundly unjust for a sizable population, and this population gathered resolve and courage in opposing those arrangements.

So the conclusion seems clear. If we want to have a world in which there is a sustainable level of the rule of law and a low level of social conflict, we need to invest in justice. We need to work to create a system in which all peoples can satisfy their most basic human needs; where everyone can feel that he/she is respected in her humanity; and where no one judges that the basic structure of social life is exploitative.

In other words, states are well advised to actively include the basic requirements of justice in their plans for the future. Otherwise they are simply creating the tinder for future conflict.

Is justice a security issue?

Most people would probably say they would prefer to live in a more just world to a less just one. There is a strong moral basis for preferring justice. But is this a consideration that states and large international organizations need to take into account as they design their strategies and plans for serving their present and future interests? Do national governments have good practical reasons to think about the consequences their policies and actions may have on the circumstances of justice in the world? What about policies and actions through which states attempt to secure their future economic wellbeing -- do policy makers need to pay attention to the social justice consequences of these actions?

There is a strong empirical and historical case for thinking that the answer to this question is "yes." Injustice is a source of resentment, indignation, and conflict. In the long run, the victims of injustice will not be ignored. Justice is a security issue for states and supra-national organizations, and simple prudence demands that policy makers take it into account. To put a simple label on this idea, justice is a security issue.

Here is a European Union statement about its longterm interests that makes this point fairly explicitly (link):

In the context of ever-increasing globalisation, the internal and external aspects of security are inextricably linked. Flows of trade and investment, the development of technology and the spread of democracy have brought prosperity and freedom to many people, while others have perceived globalisation as a cause of frustration and injustice. In much of the developing world, poverty and diseases such as AIDS give rise to security concerns, and in many cases economic failure is linked to political problems and violent conflict. Security is a precondition for development. Competition for natural resources is likely to create further turbulence. Energy dependence is a special concern for Europe.

What are the theoretical and historical arguments for this conclusion? Here are several.

On the side of theory, several points are well established. Chronic and unrelieved poverty leaves people with low attachment to their own societies and less for the global community. The frustration of very basic human needs is bound to fuel indignation and resistance. So poverty and deprivation are causes of resistance. But there is also evidence that inequality itself has negative consequences for a society's health; this is the central finding of The Spirit Level: Why Greater Equality Makes Societies Stronger (link). Finally, the social psychology created by a system that is perceived to be unfair and exploitative is likely to breed resistance and lawless action. Barrington Moore, Jr. was right when in Injustice he wrote:

Without strong moral feelings and indignation human beings will not act against the social order. In this sense moral convictions become an equally necessary element for changing the social order, along with alterations in the economic structure. 469

Gareth Stedman-Jones summarizes Barrington Moore's conclusion in these terms: "His argument is that human beings in stratified societies accept hierarchies of authority, so long as these hierarchies are not merely imposed by force, but based upon an 'unwritten' social contract, which binds together dominant and subordinate groups in a set of mutual obligations" (link).

So there are good empirical reasons, based in social psychology and the study of contentious politics, for expecting that injustice breeds conflict.

Are there historical demonstrations of the consequences of injustice for disorder? There are. We have the examples of slave revolts throughout the Americas in the 18th and 19th centuries; anti-colonial movements in Africa and Asia following World War II; the sustained resistance of the Burmese and East Timor peoples to dictatorship; and the sustained struggle for equal rights in the United States by African Americans, sometimes punctuated by major urban riots. In each case a set of social institutions had been created that were profoundly unjust for a sizable population, and this population gathered resolve and courage in opposing those arrangements.

So the conclusion seems clear. If we want to have a world in which there is a sustainable level of the rule of law and a low level of social conflict, we need to invest in justice. We need to work to create a system in which all peoples can satisfy their most basic human needs; where everyone can feel that he/she is respected in her humanity; and where no one judges that the basic structure of social life is exploitative.

In other words, states are well advised to actively include the basic requirements of justice in their plans for the future. Otherwise they are simply creating the tinder for future conflict.

The safety net in Michigan

Poverty in the United States has increased measurably in the past ten years, and this is particularly visible in the state of Michigan. (Here is a webpage provided by the Michigan Department of Human Services with some basic information on poverty in the state.)  State departments of human services and non-profit organizations alike are being stretched by the need for poverty-related services -- food assistance, childcare, heating assistance, job training, and the like. So how good a job are we doing to ensure that poor people in the United States have reasonable access to the necessities of life?

In general, the answer to the question seems mostly to be -- not a very good job. The amount of money available for services to the poor is under pressure in most state legislatures. The processes through which low-income people need to pass in order to apply for assistance are confusing and needlessly lengthy. And the "front doors" for providers are highly decentralized, so the potential recipient of assistance needs to conduct a lengthy search simply to find a possible source.

The United Way of Southeast Michigan is a highly capable social service agency that is genuinely committed to helping to improve the situation of Michigan's poorest residents (link). Here is a UWSEM report on the status of basic needs of the population in Michigan.  The report is worth reviewing in detail.  One point stands out very starkly -- a strikingly high percentage of the state's population falls in the status of poor or near-poor.  The report provides a very legible description of the composition of the 40% of Michigan's population who are "at-risk":

This is a truly sobering statistic: two out of five residents of Michigan fall within the groups of the persistent poor, working poor, newly poor, and potentially poor.

One of the United Way's current priorities is to do a careful review of the system of assistance as a whole in the state. Generally, their finding is that resources, agencies, and strategies are highly fragmented in the state, so it is easy to guess that the provision of services is somewhat sporadic and inefficient. More importantly, their analysis shows that over a billion dollars of federal assistance to individuals are left unused year after year -- at a time when the need for assistance is greater than it has ever been.  (This report should appear on the UWSEM website sometime soon.)

It's worth looking closely at the data compiled by UWSEM. Over $34 billion are expended on assistance to the poor in Michigan, with over 55% of the funds coming from Federal sources ($19.9 billion). The state's own resources represent roughly half that amount ($9.4 billion).  Foundations and private resources make up the rest.  Second, these $34 billion are expended through a large number of state agencies -- treasury, school aid, public housing, the department of human services, etc.  And finally, the funds flowing from these multiple agencies then re-aggregate at the level of the users in a variety of basic categories of need: workforce development, housing, family preservation, food, cash assistance, and healthcare.

There are several key conclusions that emerge from the UWSEM analysis. One is that this is a process that is plainly designed for providers and auditors, not users. The idea that the system of social services should be streamlined in such a way as to allow maximum access for eligible residents is clearly not the guiding design principle.

A second point is that the system is needlessly complex for the user. It should be possible to streamline services and application processes in such a way as to increase the impact of available resources for eligible people.

A third point is that it should be possible to use the Internet to significantly increase the accessibility and transparency of the system. It should be possible for the poor person to enter a single "portal"; enter his/her information into a database; and find out on one screen what programs and benefits for which he/she is eligible.

In short, it would appear that there are significant opportunities for public "safety net" providers in Michigan to increase the efficiency and reach of their services with some intelligent redesign of the delivery systems.  And we certainly need to make sure that the billion dollars of unexpended federal benefits find their way to eligible citizens.

(Here is a nice example of how universities and communities can work together to address the issues of poverty that their region faces (link).  This collaboration between Western Michigan University and various organizations in Kalamazoo, Michigan is aimed at providing easy access to data about poverty and well-being in Kalamazoo that can help guide programs and resources towards effective reduction of poverty.)

The safety net in Michigan

Poverty in the United States has increased measurably in the past ten years, and this is particularly visible in the state of Michigan. (Here is a webpage provided by the Michigan Department of Human Services with some basic information on poverty in the state.)  State departments of human services and non-profit organizations alike are being stretched by the need for poverty-related services -- food assistance, childcare, heating assistance, job training, and the like. So how good a job are we doing to ensure that poor people in the United States have reasonable access to the necessities of life?

In general, the answer to the question seems mostly to be -- not a very good job. The amount of money available for services to the poor is under pressure in most state legislatures. The processes through which low-income people need to pass in order to apply for assistance are confusing and needlessly lengthy. And the "front doors" for providers are highly decentralized, so the potential recipient of assistance needs to conduct a lengthy search simply to find a possible source.

The United Way of Southeast Michigan is a highly capable social service agency that is genuinely committed to helping to improve the situation of Michigan's poorest residents (link). Here is a UWSEM report on the status of basic needs of the population in Michigan.  The report is worth reviewing in detail.  One point stands out very starkly -- a strikingly high percentage of the state's population falls in the status of poor or near-poor.  The report provides a very legible description of the composition of the 40% of Michigan's population who are "at-risk":

This is a truly sobering statistic: two out of five residents of Michigan fall within the groups of the persistent poor, working poor, newly poor, and potentially poor.

One of the United Way's current priorities is to do a careful review of the system of assistance as a whole in the state. Generally, their finding is that resources, agencies, and strategies are highly fragmented in the state, so it is easy to guess that the provision of services is somewhat sporadic and inefficient. More importantly, their analysis shows that over a billion dollars of federal assistance to individuals are left unused year after year -- at a time when the need for assistance is greater than it has ever been.  (This report should appear on the UWSEM website sometime soon.)

It's worth looking closely at the data compiled by UWSEM. Over $34 billion are expended on assistance to the poor in Michigan, with over 55% of the funds coming from Federal sources ($19.9 billion). The state's own resources represent roughly half that amount ($9.4 billion).  Foundations and private resources make up the rest.  Second, these $34 billion are expended through a large number of state agencies -- treasury, school aid, public housing, the department of human services, etc.  And finally, the funds flowing from these multiple agencies then re-aggregate at the level of the users in a variety of basic categories of need: workforce development, housing, family preservation, food, cash assistance, and healthcare.

There are several key conclusions that emerge from the UWSEM analysis. One is that this is a process that is plainly designed for providers and auditors, not users. The idea that the system of social services should be streamlined in such a way as to allow maximum access for eligible residents is clearly not the guiding design principle.

A second point is that the system is needlessly complex for the user. It should be possible to streamline services and application processes in such a way as to increase the impact of available resources for eligible people.

A third point is that it should be possible to use the Internet to significantly increase the accessibility and transparency of the system. It should be possible for the poor person to enter a single "portal"; enter his/her information into a database; and find out on one screen what programs and benefits for which he/she is eligible.

In short, it would appear that there are significant opportunities for public "safety net" providers in Michigan to increase the efficiency and reach of their services with some intelligent redesign of the delivery systems.  And we certainly need to make sure that the billion dollars of unexpended federal benefits find their way to eligible citizens.

(Here is a nice example of how universities and communities can work together to address the issues of poverty that their region faces (link).  This collaboration between Western Michigan University and various organizations in Kalamazoo, Michigan is aimed at providing easy access to data about poverty and well-being in Kalamazoo that can help guide programs and resources towards effective reduction of poverty.)

The safety net in Michigan

Poverty in the United States has increased measurably in the past ten years, and this is particularly visible in the state of Michigan. (Here is a webpage provided by the Michigan Department of Human Services with some basic information on poverty in the state.)  State departments of human services and non-profit organizations alike are being stretched by the need for poverty-related services -- food assistance, childcare, heating assistance, job training, and the like. So how good a job are we doing to ensure that poor people in the United States have reasonable access to the necessities of life?

In general, the answer to the question seems mostly to be -- not a very good job. The amount of money available for services to the poor is under pressure in most state legislatures. The processes through which low-income people need to pass in order to apply for assistance are confusing and needlessly lengthy. And the "front doors" for providers are highly decentralized, so the potential recipient of assistance needs to conduct a lengthy search simply to find a possible source.

The United Way of Southeast Michigan is a highly capable social service agency that is genuinely committed to helping to improve the situation of Michigan's poorest residents (link). Here is a UWSEM report on the status of basic needs of the population in Michigan.  The report is worth reviewing in detail.  One point stands out very starkly -- a strikingly high percentage of the state's population falls in the status of poor or near-poor.  The report provides a very legible description of the composition of the 40% of Michigan's population who are "at-risk":

This is a truly sobering statistic: two out of five residents of Michigan fall within the groups of the persistent poor, working poor, newly poor, and potentially poor.

One of the United Way's current priorities is to do a careful review of the system of assistance as a whole in the state. Generally, their finding is that resources, agencies, and strategies are highly fragmented in the state, so it is easy to guess that the provision of services is somewhat sporadic and inefficient. More importantly, their analysis shows that over a billion dollars of federal assistance to individuals are left unused year after year -- at a time when the need for assistance is greater than it has ever been.  (This report should appear on the UWSEM website sometime soon.)

It's worth looking closely at the data compiled by UWSEM. Over $34 billion are expended on assistance to the poor in Michigan, with over 55% of the funds coming from Federal sources ($19.9 billion). The state's own resources represent roughly half that amount ($9.4 billion).  Foundations and private resources make up the rest.  Second, these $34 billion are expended through a large number of state agencies -- treasury, school aid, public housing, the department of human services, etc.  And finally, the funds flowing from these multiple agencies then re-aggregate at the level of the users in a variety of basic categories of need: workforce development, housing, family preservation, food, cash assistance, and healthcare.

There are several key conclusions that emerge from the UWSEM analysis. One is that this is a process that is plainly designed for providers and auditors, not users. The idea that the system of social services should be streamlined in such a way as to allow maximum access for eligible residents is clearly not the guiding design principle.

A second point is that the system is needlessly complex for the user. It should be possible to streamline services and application processes in such a way as to increase the impact of available resources for eligible people.

A third point is that it should be possible to use the Internet to significantly increase the accessibility and transparency of the system. It should be possible for the poor person to enter a single "portal"; enter his/her information into a database; and find out on one screen what programs and benefits for which he/she is eligible.

In short, it would appear that there are significant opportunities for public "safety net" providers in Michigan to increase the efficiency and reach of their services with some intelligent redesign of the delivery systems.  And we certainly need to make sure that the billion dollars of unexpended federal benefits find their way to eligible citizens.

(Here is a nice example of how universities and communities can work together to address the issues of poverty that their region faces (link).  This collaboration between Western Michigan University and various organizations in Kalamazoo, Michigan is aimed at providing easy access to data about poverty and well-being in Kalamazoo that can help guide programs and resources towards effective reduction of poverty.)

Urban and metropolitan problem solving

The issues that almost all large American metropolitan regions and cities are facing are important and messy. Here is a short list: racial segregation, concentration of poverty, poor health and nutrition, poor schools, crime and violence, and disaffection of young people. These problems are important because they hold back the personal lives of millions of Americans living in poverty and degraded urban neighborhoods. And they are messy because they are multi-causal and interconnected. Each problem feeds into another, and it is generally difficult to say what kinds of policy changes and plans would lead to eventual improvement. These are "wicked" problems (link) that require planners to work with complex and unpredictable processes in an effort to improve Cleveland, Chicago, Oakland, Miami, Houston, Kansas City, and Detroit.

There is another reason why urban and metropolitan problems are hard to solve -- the lack of political will to seriously address the problems in a long-term and sustained way. State legislatures often have an anti-urban bias. Regions often embody conflicts of interest between suburbs and city. Jurisdictions are often more concerned about their own narrow interests than in finding workable regional solutions. And the Federal government often fails for decades to mount serious and realistic urban strategies. So the result is often stasis -- nothing happens.

One aspect of the challenge is the availability of timely, reliable data about a region's health and performance. City governments collect a lot of data about health status, land use, and crime; but they are often reluctant to make their information available to researchers and the public. Foundations and individual researchers undertake studies focused on one problem or another; but often the reports are difficult to find and difficult to compare.

So we might hypothesize that the situation would be improved if there were an active, well-resourced clearinghouse for regional data from a wide range of sources: census, municipal departments, academic studies, land use surveys, and environmental surveys. Ideally these data sets would be managed by a professional staff who are able to integrate the various sources into a query-based GIS system, and ideally the data sets themselves would be publicly available (subject to appropriate privacy conditions). this kind of regional data warehouse would not directly solve the problems the region faces; but it would give a clear understanding of the scope and distribution of the problems that need to be addressed; it would provide an empirical base for proposed policy solutions; and it would provide a baseline for eventually evaluating the policies that are adopted.

Fortunately, there are good examples of exactly this kind of effort underway in various regions around the country. One such effort is underway at the Community Research Institute, part of the Johnson Center for Philanthropy at Grand Valley State University in Michigan (link). The Institute focuses primarily on several counties surrounding Grand Rapids, but it is also preparing to expand its coverage to other parts of Michigan. With a foundational database linking US Census data geographically, the Institute attempts to provide geographically linked data down to the neighborhood level. Here is an example of a map of the teen birth rate in neighborhoods of Grand Rapids (link). The Center has developed a general tool, MAPAS, that can serve as a platform for integrating and presenting a wide range of social data sources (link).

A similar effort is underway in the Detroit metropolitan region, under the rubric of Data Driven Detroit (link). D3 is attempting to create this kind of publicly accessible, spatially presented data warehouse for the city and the region, and the early results are promising.  Here is a report on a recent study conducted by D3 on housing stock in Detroit (link).

So how can data sources like these be folded into good planning efforts for urban and metropolitan progress? The city of Detroit under the leadership of Mayor Dave Bing is just beginning an important planning effort that ties into the need to adjust the cityscape to the dramatically smaller population it now contains. This effort is called the Detroit Works Project (link), and it is explicitly committed to data-driven decision making and planning.

Another effort that is underway is the Integration Initiative within Living Cities (link, link). Detroit is one of the cities that has been funded within the program.  Here is how Living Cities describes the national project of the Integration Initiative:

The Integration Initiative builds upon Living Cities’ 20-year history of investing in cities. It acknowledges both the power and limitations of the neighborhood as a lever for change and seeks to drive a broader perspective that recognizes the role systems and regions must play in securing economic opportunity for low-income people.

The Integration Initiative will provide at least $80 million in grants, loans and Program-Related Investments (PRIs) to five regions to help them tackle the greatest barriers to opportunity for low-income residents, including education, housing, health care, transit and jobs. Living Cities and its members are making a total investment of $15 million in grants, $15 million in PRIs and $50 million in commercial debt. PRIs are flexible, low-cost loans provided at below-market rates to support charitable activity.

In order for a project like this to succeed, it needs to be based on solid empirical data.  It is crucial for the progress of metropolitan Detroit, and other cities around the country, that the region succeed in creating a unified regional data source.

Urban and metropolitan problem solving

The issues that almost all large American metropolitan regions and cities are facing are important and messy. Here is a short list: racial segregation, concentration of poverty, poor health and nutrition, poor schools, crime and violence, and disaffection of young people. These problems are important because they hold back the personal lives of millions of Americans living in poverty and degraded urban neighborhoods. And they are messy because they are multi-causal and interconnected. Each problem feeds into another, and it is generally difficult to say what kinds of policy changes and plans would lead to eventual improvement. These are "wicked" problems (link) that require planners to work with complex and unpredictable processes in an effort to improve Cleveland, Chicago, Oakland, Miami, Houston, Kansas City, and Detroit.

There is another reason why urban and metropolitan problems are hard to solve -- the lack of political will to seriously address the problems in a long-term and sustained way. State legislatures often have an anti-urban bias. Regions often embody conflicts of interest between suburbs and city. Jurisdictions are often more concerned about their own narrow interests than in finding workable regional solutions. And the Federal government often fails for decades to mount serious and realistic urban strategies. So the result is often stasis -- nothing happens.

One aspect of the challenge is the availability of timely, reliable data about a region's health and performance. City governments collect a lot of data about health status, land use, and crime; but they are often reluctant to make their information available to researchers and the public. Foundations and individual researchers undertake studies focused on one problem or another; but often the reports are difficult to find and difficult to compare.

So we might hypothesize that the situation would be improved if there were an active, well-resourced clearinghouse for regional data from a wide range of sources: census, municipal departments, academic studies, land use surveys, and environmental surveys. Ideally these data sets would be managed by a professional staff who are able to integrate the various sources into a query-based GIS system, and ideally the data sets themselves would be publicly available (subject to appropriate privacy conditions). this kind of regional data warehouse would not directly solve the problems the region faces; but it would give a clear understanding of the scope and distribution of the problems that need to be addressed; it would provide an empirical base for proposed policy solutions; and it would provide a baseline for eventually evaluating the policies that are adopted.

Fortunately, there are good examples of exactly this kind of effort underway in various regions around the country. One such effort is underway at the Community Research Institute, part of the Johnson Center for Philanthropy at Grand Valley State University in Michigan (link). The Institute focuses primarily on several counties surrounding Grand Rapids, but it is also preparing to expand its coverage to other parts of Michigan. With a foundational database linking US Census data geographically, the Institute attempts to provide geographically linked data down to the neighborhood level. Here is an example of a map of the teen birth rate in neighborhoods of Grand Rapids (link). The Center has developed a general tool, MAPAS, that can serve as a platform for integrating and presenting a wide range of social data sources (link).

A similar effort is underway in the Detroit metropolitan region, under the rubric of Data Driven Detroit (link). D3 is attempting to create this kind of publicly accessible, spatially presented data warehouse for the city and the region, and the early results are promising.  Here is a report on a recent study conducted by D3 on housing stock in Detroit (link).

So how can data sources like these be folded into good planning efforts for urban and metropolitan progress? The city of Detroit under the leadership of Mayor Dave Bing is just beginning an important planning effort that ties into the need to adjust the cityscape to the dramatically smaller population it now contains. This effort is called the Detroit Works Project (link), and it is explicitly committed to data-driven decision making and planning.

Another effort that is underway is the Integration Initiative within Living Cities (link, link). Detroit is one of the cities that has been funded within the program.  Here is how Living Cities describes the national project of the Integration Initiative:

The Integration Initiative builds upon Living Cities’ 20-year history of investing in cities. It acknowledges both the power and limitations of the neighborhood as a lever for change and seeks to drive a broader perspective that recognizes the role systems and regions must play in securing economic opportunity for low-income people.

The Integration Initiative will provide at least $80 million in grants, loans and Program-Related Investments (PRIs) to five regions to help them tackle the greatest barriers to opportunity for low-income residents, including education, housing, health care, transit and jobs. Living Cities and its members are making a total investment of $15 million in grants, $15 million in PRIs and $50 million in commercial debt. PRIs are flexible, low-cost loans provided at below-market rates to support charitable activity.

In order for a project like this to succeed, it needs to be based on solid empirical data.  It is crucial for the progress of metropolitan Detroit, and other cities around the country, that the region succeed in creating a unified regional data source.

Urban and metropolitan problem solving

The issues that almost all large American metropolitan regions and cities are facing are important and messy. Here is a short list: racial segregation, concentration of poverty, poor health and nutrition, poor schools, crime and violence, and disaffection of young people. These problems are important because they hold back the personal lives of millions of Americans living in poverty and degraded urban neighborhoods. And they are messy because they are multi-causal and interconnected. Each problem feeds into another, and it is generally difficult to say what kinds of policy changes and plans would lead to eventual improvement. These are "wicked" problems (link) that require planners to work with complex and unpredictable processes in an effort to improve Cleveland, Chicago, Oakland, Miami, Houston, Kansas City, and Detroit.

There is another reason why urban and metropolitan problems are hard to solve -- the lack of political will to seriously address the problems in a long-term and sustained way. State legislatures often have an anti-urban bias. Regions often embody conflicts of interest between suburbs and city. Jurisdictions are often more concerned about their own narrow interests than in finding workable regional solutions. And the Federal government often fails for decades to mount serious and realistic urban strategies. So the result is often stasis -- nothing happens.

One aspect of the challenge is the availability of timely, reliable data about a region's health and performance. City governments collect a lot of data about health status, land use, and crime; but they are often reluctant to make their information available to researchers and the public. Foundations and individual researchers undertake studies focused on one problem or another; but often the reports are difficult to find and difficult to compare.

So we might hypothesize that the situation would be improved if there were an active, well-resourced clearinghouse for regional data from a wide range of sources: census, municipal departments, academic studies, land use surveys, and environmental surveys. Ideally these data sets would be managed by a professional staff who are able to integrate the various sources into a query-based GIS system, and ideally the data sets themselves would be publicly available (subject to appropriate privacy conditions). this kind of regional data warehouse would not directly solve the problems the region faces; but it would give a clear understanding of the scope and distribution of the problems that need to be addressed; it would provide an empirical base for proposed policy solutions; and it would provide a baseline for eventually evaluating the policies that are adopted.

Fortunately, there are good examples of exactly this kind of effort underway in various regions around the country. One such effort is underway at the Community Research Institute, part of the Johnson Center for Philanthropy at Grand Valley State University in Michigan (link). The Institute focuses primarily on several counties surrounding Grand Rapids, but it is also preparing to expand its coverage to other parts of Michigan. With a foundational database linking US Census data geographically, the Institute attempts to provide geographically linked data down to the neighborhood level. Here is an example of a map of the teen birth rate in neighborhoods of Grand Rapids (link). The Center has developed a general tool, MAPAS, that can serve as a platform for integrating and presenting a wide range of social data sources (link).

A similar effort is underway in the Detroit metropolitan region, under the rubric of Data Driven Detroit (link). D3 is attempting to create this kind of publicly accessible, spatially presented data warehouse for the city and the region, and the early results are promising.  Here is a report on a recent study conducted by D3 on housing stock in Detroit (link).

So how can data sources like these be folded into good planning efforts for urban and metropolitan progress? The city of Detroit under the leadership of Mayor Dave Bing is just beginning an important planning effort that ties into the need to adjust the cityscape to the dramatically smaller population it now contains. This effort is called the Detroit Works Project (link), and it is explicitly committed to data-driven decision making and planning.

Another effort that is underway is the Integration Initiative within Living Cities (link, link). Detroit is one of the cities that has been funded within the program.  Here is how Living Cities describes the national project of the Integration Initiative:

The Integration Initiative builds upon Living Cities’ 20-year history of investing in cities. It acknowledges both the power and limitations of the neighborhood as a lever for change and seeks to drive a broader perspective that recognizes the role systems and regions must play in securing economic opportunity for low-income people.

The Integration Initiative will provide at least $80 million in grants, loans and Program-Related Investments (PRIs) to five regions to help them tackle the greatest barriers to opportunity for low-income residents, including education, housing, health care, transit and jobs. Living Cities and its members are making a total investment of $15 million in grants, $15 million in PRIs and $50 million in commercial debt. PRIs are flexible, low-cost loans provided at below-market rates to support charitable activity.

In order for a project like this to succeed, it needs to be based on solid empirical data.  It is crucial for the progress of metropolitan Detroit, and other cities around the country, that the region succeed in creating a unified regional data source.

French economic inequalities

France is one of the more affluent countries in the OECD, but it continues to contain significant poverty and meaningful inequalities of income, wealth, and life outcomes. The past several years of rising unemployment have worsened these circumstances. A lot of this variation occurs across the lines of ethnicity and national origins; immigrant communities in France tend to have significantly higher levels of poverty, unemployment, and health disparities, often concentrated in the banlieue surrounding major cities. So how should concerned French citizens get a better understanding of these fundamental features of French society?

A research center and website that attempts to track these inequalities is the Observatoire des inegalites, directed by Louis Maurin. The website is found at inegalite.fr, and it is worthy of regular visits. The goal of the Observatoire project is to make sense of the social statistics of France and to communicate this information to the public in an understandable way. Right now the organization is focusing on recently released statistics on the rate of poverty on France. It would be very useful if there were similar sites in other countries, including the United States. (Here is a valuable source of information on poverty data provided by the United States Census Bureau; link.)

Two issues are particularly central when it comes to measuring poverty: first, how to define the poverty line (and how to interpret the poverty budget that this corresponds to); and second, how many people are poor in France by this criterion, and how this has been changing in the past several years.

On the first question, the official standard in France is pegged to a budget defined as half of the median income. This raises the first significant debate, because the EU pegs the poverty rate to the 60th percentile of income rather than the 50th percentile (median). Naturally, more people are classified as poor by the second criterion than the first. (In the U.S. the poverty line is calculated on the basis of an estimate of the income needed to purchase a specified "poverty budget" wage basket.)

Two features of the French definition of poverty are noteworthy. First, it is a relative rather than absolute definition of poverty; the index rises as economic growth occurs and median family rises. Rather than conceiving of poverty as absolute deprivation, it conceives of poverty in relation to the income levels of the rest of society. The poverty line will be different in Sweden and France. And the U.S. definition is more similar to an absolute definition: unless the contents of the poverty wage basket changes, people who are at the poverty line in 1970 will have the same purchasing power as people at the poverty line in 2000.

Second, this is a purely income-based criterion of poverty, rather than an all-round assessment of living standards. As Amartya Sen argues, poverty is not solely determined by low income. The poverty wage basket approach comes a bit closer to Sen's idea that it is the overall ability of the poor family's ability to satisfy its basic needs that determines its status as poor or not-poor. (The main component that Sen emphasizes in his overview of quality of life as being overlooked by a pure income criterion of poverty is the provisioning of social services by the state; and France sets a fairly high standard with respect to this factor.)

So how does France measure up when it comes to poverty? Basically, the data suggest that the poverty rate is significant in France (7.1% in 2008, representing 4.3 million people), and, even more pressingly, it seems to have stabilized at that level. In 1970 the rate was 13.5%, falling to 7.2% in 1998. But during the next decade there was no significant change; there were 4.3 million poor people in France in 1998 and in 2008. (The poverty rate in the U.S. is estimated at a whopping 14.3% for 2009 -- a striking increase over the previous decade (link), and an appalling counterpoint to the extreme increases that have taken place in the United States in the concentration of income at the top of the distribution.)

Measuring poverty is a very important step for any decent society. More difficult and more important is deciphering the economic mechanisms giving rise to poverty and creating the observed changes in the rate over time. Unemployment is one obvious factor, and France is experiencing high rates of unemployment along with much of the rest of Europe. But what about other mechanisms? What about discrimination in housing and employment, for example (as suggested in Didier Lapeyronnie's Ghetto Urbain).  And what about the terms of the grand social compact -- the division of income and wealth among classes and educational levels? This is essentially what the conflict is about in France today, between unions and business, and between the Sarkozy government and large segments of society.  And these are the mechanisms that generate inequalities of income and wealth, and they contribute to the macro-facts about poverty as well.

Another point established by data on the Observatoire is the fact that the mechanisms generating jobs and joblessness are very differently distributed across the map of France. The unemployment rate in France as a whole was 9.5% in 2009. But this rate encompasses a range of rates across regions of France, from 5.0% in Lozere to 13.5% and 13.6% in Herault and Aisne (link).

Also interesting on the site at present is an analysis of inequalities across social groups in terms of access to the baccalaureate degree; data provided here demonstrates sharp inequalities by group in terms of access to this valuable source of personal development and earning potential (link). Since education -- especially higher education -- is crucial to entry in higher-earning professions and occupations, the differential social processes at work here are also relevant to the distribution of income in the coming generation.

The Observatoire does a very good job of approximating the ideal of a transparent, understandable representation of the social data of a whole population. As such it is a very important experiment in "understanding society."