GCO signed coalition letter urging policymakers to prioritize high-speed broadband in rural Georgia

GCO signed coalition letter urging policymakers to prioritize high-speed broadband in rural Georgia

GCO signed coalition letter urging policymakers to prioritize high-speed broadband in rural Georgia

The Georgia Center for Opportunity (GCO) has signed on to a coalition letter urging policymakers to prioritize the use of federal emergency dollars for high-speed broadband in rural, underserved areas of Georgia.The letter makes four recommendations:

  • Target funds to areas without access to high-speed broadband, defined as 25 Mbps download and 3 Mbps upload

  • Avoid investments in government-owned networks
  • Reduce red tape around deployment
  • Ensure adequate resources for permitting approval

 

Buzz statement rural broadband

 

GCO’s take: “Broadband for rural areas should’ve been a priority prior to the COVID-19 pandemic. Now, it’s an emergency,” said Buzz Brockway, GCO’s vice president of public policy. “Good Internet access will be a boon to rural Georgia. Broadband is also crucial for some of our state’s most vulnerable students, and expanding Internet access is closely aligned with GCO’s mission to expand educational opportunity. In the middle of all this, we can’t afford to get mired in bureaucratic red tape, either. That’s why we must avoid working through government-owned networks and instead quickly review and approve applications to get this done.”

 

Many Special Needs Students Have Struggled with Virtual Classes

Many Special Needs Students Have Struggled with Virtual Classes

Many Special Needs Students Have Struggled with Virtual Classes

Special Needs

For some students virtual classes during the past year have been fine. Some have even thrived. But for many special needs students, it has not gone well, as a parent tells the Georgia Center for Opportunity:

A virtual classroom worked fine for Jennifer’s two older children, but her youngest son, 10-year-old Joey, has Down syndrome. Online learning is entirely unworkable for him due to his special needs.

For example, DeKalb is following a normal bell schedule but staying engaged on Zoom for hours on end is not working. Morning classes will sometimes go well, but by lunchtime Joey is tuned out. It is impossible to get him back online after the lunch break for specials, such as music and art, and Jennifer cannot stay tied up until 2:30pm every day. She has seen academic and social regression for her son as he has little to no interaction with peers.

Additionally, his academic growth is limited due to repetitive practice of current skills on worksheets with no new individual instruction to learn new concepts in language arts or math. As a highly visual and experiential learner, he is missing the magic that happens in a classroom that cannot be replicated on a Zoom call.

“It’s day-by-day and minute-by-minute,” Jennifer shares. “One class he is engaged and on task, and the next minute he is hiding under the bed or taking his shirt off.”

All children, no matter their needs, deserve the opportunity for a high-quality education that meets their individual requirements. 

Today, Axios wrote about a newly released report on 130 studies on the safety of school reopening. The report found:

  • Any benefits to closing schools are far outweighed by the grave risks to children from remote-only schooling — risks that intensify the longer it continues, the report says.
  • The harms include academic loss — so severe that it could set children back for life — and mental health problems related to loneliness and isolation.
  • There are also severe hardships on parents — mothers in particular, about two million of whom have left the workforce to care for their kids as part of remote learning.
  • “Schools are not super-spreaders,” observes the report, written by John P. Bailey, a former deputy policy director at the Department of Commerce.

Fortunately almost 73% of Georgia’s school districts are open for face to face learning. The rest need to reopen ASAP, and plans need to be made to help students who fell behind catch up.

 

This post originally appeared on PeachPundit.com on March 11, 2021.

 

Why the Minimum Wage is Bad News for Small Business

Why the Minimum Wage is Bad News for Small Business

Why the Minimum Wage is Bad News for Small Business

payday

Why that’s bad for everyone else, and how raising costs can have disastrous economic consequences.

In a prior blog, I explained how empirical research supports the side of the debate asserting negative consequences due to minimum wage laws. Now we’ll look under the hood to understand more why this might be the case.

After the stock market crash of 1929—yes, I’m taking you back that far—President Herbert Hoover rolled into action to get the U.S. economy out of the recession that would become the Great Depression. Among his activities were efforts to boost prices and wages, including White House conferences to cajole business leaders to maintain wage rates. 

His successor, Franklin D. Roosevelt, went further to promote higher prices and wages, especially with the Wagner Act intended to strengthen labor unions and the National Industrial Recovery Act (NIRA) that established a system of industry cartels that regulated, among other things, wages and prices. 

In 1935, the U.S. Supreme Court struck down the NIRA. In response, the minimum wage became a platform issue for his 1936 reelection campaign, and FDR succeeded in getting a federal minimum wage of 25¢ per hour in 1938.

Economists seemingly agree on little, but one thing they do agree on is that the policies of Hoover and Roosevelt did nothing to get the U.S. out of the Great Depression. Keep this history in mind when you hear advocates who want to raise the minimum wage. 

Importance of small business

Small businesses are at the heart of the American economy. They are a major engine of prosperity and job growth, enriching society and helping to spread wealth at a time when economic disparities are receiving more attention. 

Examples of small businesses are too many to list but include your local restaurant, hair salon, construction firm, dentist, bakery, and small-town law firm. It also includes many franchisees who may own your local McDonald’s, Subway, UPS store, hardware store, senior home care service, or handyman service. 

 

worker and coin stacks

According to the U.S. Small Business Administration

  • There were 31.7 million small businesses in the U.S. in 2017.
  • They employed 60.6 million people, or 47.1 percent of the private workforce in 2018. 
  • That number included 4.2 million self-employed persons of color.

Small businesses created 1.6 million net jobs in 2019.

Not all about profits

Also according to the Small Business Administration, there were 249,000 business start-ups creating 863,000 new jobs in 2018. However, those gains were partially offset by 222,000 businesses shutting down, taking 762,000 jobs with them. 

This comparison is a good way of exposing a common myth about economics: It is not all about profits. It is also about losses. 

If you took an economics course in college or high school, you probably found yourself spending time looking at the impact of losses and how much a business can lose before it must shut down.

What it takes to run a small business 

Running a small business is hard. It requires dedication, resources, and daily decisions to keep operations viable without the benefit of an array of professional managers and departments that large businesses typically have. When a small business owner makes a mistake, he takes a direct hit. If the mistake is large enough, it could threaten his or her livelihood.

Politicians, on the other hand, can make a policy mistake impacting business, but they do not take a direct hit. Because every business is different, it is impossible for politicians to know what it takes for every type of business to stay viable and make a profit. Yet changes in government regulations, taxes, and wage laws can have devastating impacts on businesses.

The ability of businesses to withstand changes in minimum wage laws depends on the circumstances of the business and their profitability. It is naive to assume that every business relying on low-cost labor would be able to pay its employees more just because the government mandates them to do so. 

Many businesses operate on thin profit margins. If their costs go up, they may substitute technology for labor, if they can, which naturally and unfortunately results in workers losing their jobs. 

Worse, the business may have to shut down. It makes no sense to expect businesses to continue operating if they are losing money. Many small business owners who shut down may need to find a job themselves or risk landing in poverty. This helps no one, least of all the laid-off employees.

Final warnings

Beware of large corporations like Amazon or Walmart who might support minimum wage laws. It could be because they see it as a way to drive out competition from small mom and pop businesses.

Forcing small businesses to raise wages, especially after they sustained a financial hit from a pandemic, only promises to weaken an all-important job growth engine for the U.S. economy at a time when we need to bolster the small business sector and get the economy rolling again. This strategy of mandating wage increases certainly did not work out well during the Great Depression. There is no good reason to think it will work now.

So, what do our state and national legislators need to be doing? They need to concentrate on getting the economic job engine revving up again, and this is done by finding ways to reduce costs for businesses (not raising them), making it easier for entrepreneurs to start their own businesses (not making it harder), and making sure the financial markets are working properly so small businesses can access much-needed funds.

Where does all this leave the worker stuck in a low-wage job? Stay tuned. I’ll answer that question in my next blog. 

 

*Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.

 

Does the Minimum Wage Hurt or Help the Poor?

Does the Minimum Wage Hurt or Help the Poor?

Does the Minimum Wage Hurt or Help the Poor?

pizza delivery

What economic research really tells us

Finally, we have the definitive answer on a longstanding debate on whether empirical studies show that minimum wage laws negatively impact employment. 

You may have heard conflicting summaries, perhaps from economists themselves, on the economic research on this important topic. Some summarize the research to say that indeed raising the threshold of minimum wage laws comes with a cost of lost jobs, especially for poorer individuals who tend to lack experience and job skills. Others summarize the research to suggest that no such evidence can be found or there might be even slight benefits. And, still, others claim that the evidence is mixed, and you can’t conclude anything. 

Last month, David Neumark—an economic research associate at the University of California, Irvine, and Peter Shirley with the Joint Committee on Government and Finance for the West Virginia Legislature—released a study that answered the question. 

What does economic research tell us about the minimum wage?

In their National Bureau of Economic Research working paper, the researchers assembled what they believe to be the entire set of published empirical economic studies on the minimum wage in the United States since 1992. They did not include unpublished papers, simulations, or studies using methods considered to be less empirically rigorous. 

Of the total 66 papers they identified and examined, they found that 79 percent of them showed a negative impact. 

In summarizing the demographic groups most impacted by the minimum wage, the authors said the following:

There is strong and consistent evidence of negative employment effects for teens, young adults, the less-educated, and directly-affected (low-wage) workers, with the estimated elasticities generally larger for the less-educated than for teens and young adults, and larger still for directly-affected workers.

By the way, in case you don’t know, “elasticity” is simply an economic measurement of sensitivity. In this case, it refers to employment’s sensitivity to a change in the wage rate. 

Interpreting the research scientifically

Some might want to spin the results to say that because 21 percent of the studies showed no adverse impact, we cannot conclude anything. Or, worse, they may argue that raising the minimum wage in this case may have some positive effects on employment.

However, this is what is known as cherry picking—a no-no when reviewing statistical evidence. We need to keep a few things in mind.

First, when reviewing statistical studies, there is always the chance you get false results. These are known in the profession as Type I or Type II errors, depending on whether you reject your null hypothesis when you shouldn’t have, or its opposite. 

We have to look at the confidence level. (Not to be confused with the confidence interval or margin of error.) A 90 percent confidence level, which is usually the standard for national employment data released by the Bureau of Labor Statistics, means that 10 percent of the time, your results will be totally wrong. (That is, outside your margin of error.)

Because of these reasons, the science tells us to look at all valid studies—methodologically valid, that is—and go with the preponderance of the evidence. In this case, because 79 percent of the studies show negative impact, this is the conclusion we need to go with.

When it comes to empirical studies applied to economics, there is another consideration. The design of the study must be consistent with economic reasoning. 

This is harder than it sounds. For minimum wage issues, economic reasoning says that negative impacts will occur only when price floors—minimum wages in this case—exceed the market equilibrium. Absent that condition, there would be no impact, but then also no point in establishing the price floor. 

This adds a level of complication that, if anything, would increase the error rate. In this case, a 21 percent error rate would be consistent with what we should expect. By the way, this is also why it’s important to do multiple empirical studies to replicate the results. You can’t rely on just one study.

If raising the minimum wage is not the answer, what is?

For advocates of the minimum wage, the empirical evidence will be disappointing. Take heart. There are better solutions out there.

The main reasons people support the idea of a minimum wage are to help wage earners keep up with inflation and to enable them to earn a decent living. In response, I suggest a three prong approach: attack inflation, promote economic growth, and improve education and job skills of the population, especially low-income workers.

Few people realize that inflation is government policy. The Federal Reserve Board of Governors has adopted an annual inflation target of 2 percent, and since the start of the pandemic the board eased its policies to allow inflation to exceed its target. 

From my perspective, this inflation target is crazy. It’s a hidden tax that hits the poor the worst. My recommendation is to eliminate the inflation target with a new target so prices remain stable or decline slightly every year to match general gains in productivity. 

Of course, economists are divided as ever when it comes to macro policies, and a host of them will cry that eliminating the inflation target is dangerous. They’re wrong, but I’ll save my rebuttal for another day. 

 

worker and coin stacks

“I suggest a three prong approach: attack inflation, promote economic growth, and improve education and job skills of the population, especially low-income workers.”

 

Second, the more the economy grows, the better it is for the labor market, increasing the demand for jobs. This is a natural and excellent way to push up wages for workers. When you have a growing economy, businesses can afford to pay their workers more—and they will do so without government cajoling them because it will be in their economic interest to do so. We only need to look at the increase in employment and wages over the several years leading up to the COVID-19 recession for evidence of how this works. 

Conversely, when you have a recessionary time, like now, it is the worst time—not that there is any good time—to force businesses to pay their workers more when they can least afford it. Politicians take heed. Follow the science on this one.

There are countless stories of this in action. For example, the restaurant Boca Nova in Oakland, California, implemented dramatic changes to its pay structure after the city mandated a $12.25 minimum wage in 2015. In lieu of gratuity, the restaurant tacked 16 percent onto customers’ bills: 4 percent went directly to servers and the remaining 12 percent covered the cost of raising salaries for other workers. The results were that about 60 percent of the restaurant’s servers quit because the policy slashed their average hourly earnings by around half—from between $38 and $70 an hour to $22 to $28 an hour.

Finally, our public education systems have been failing us and our children, especially for students  stuck in underperforming schools or lacking resources at home. The consequence is too many workers unable to secure higher wages in our current job market. 

This last prong is where the Georgia Center for Opportunity (GCO) really shines. It is actively promoting improved education and job training. And GCO is collaborating with other nonprofits to help place people in employment with a career ladder to improve their earning capacity over time.

 

School closures, a job loss, and health emergencies: How the pandemic is impacting one family of a student with special needs in Georgia

School closures, a job loss, and health emergencies: How the pandemic is impacting one family of a student with special needs in Georgia

School closures, a job loss, and health emergencies: How the pandemic is impacting one family of a student with special needs in Georgia

Mom and special needs son

Students are missing the magic that happens in a classroom that cannot be replicated on a Zoom call

When the pandemic came home to DeKalb County in March 2020, Jennifer Sheran and her husband never expected that it would touch off a year-long stint of trials.

It all began with the public school system’s transition to online learning. A virtual classroom worked fine for Jennifer’s two older children, but her youngest son, 10-year-old Joey, has Down syndrome. Online learning is entirely unworkable for him due to his special needs.

For example, DeKalb is following a normal bell schedule but staying engaged on Zoom for hours on end is not working. Morning classes will sometimes go well, but by lunchtime Joey is tuned out. It is impossible to get him back online after the lunch break for specials, such as music and art, and Jennifer cannot stay tied up until 2:30pm every day. She has seen academic and social regression for her son as he has little to no interaction with peers.

Additionally, his academic growth is limited due to repetitive practice of current skills on worksheets with no new individual instruction to learn new concepts in language arts or math. As a highly visual and experiential learner, he is missing the magic that happens in a classroom that cannot be replicated on a Zoom call.

“It’s day-by-day and minute-by-minute,” Jennifer shares. “One class he is engaged and on task, and the next minute he is hiding under the bed or taking his shirt off.”

Adding fuel to the fire, Jennifer’s 25-year career in PR and corporate communications hit a speed bump in July when she lost her full-time job. Her income was a significant part of the household budget.

Normally, Jennifer would have launched a job search immediately, but the demands of online learning for Joey meant that she could only pick up a few freelance projects to try and bridge a small part of the gap in their family budget.

Today, nearly a year after DeKalb schools went virtual, Jennifer is getting so desperate that she and her husband have decided to list their home in Dunwoody and move south to Henry County, where public schools have been open for in-person instruction since September.

We’re expanding opportunities and giving new hope to children across the state. All students deserve access to high quality education options. 

Good news on the horizon

Another layer of challenges hit when Jennifer’s mother had a stroke and is now in rehab. With her father already suffering from COPD and advanced kidney disease, the Sherans will be selling their home and moving in with her parents to be caregivers until they can make the permanent move to Henry County.

All schools continue to have their doors shut to in-person learning, Jennifer shares that the special needs community “is getting completely overlooked.”

“In other states and even elsewhere in Georgia, school districts make accommodations, understanding that special-needs students have a need to return back to classrooms earlier than others,” she said.

There is good news on the horizon for families like Jennifer’s: Georgia Governor Brian Kemp recently allocated $10 million in federal emergency relief dollars specifically to reimburse parents of students with special needs for education expenses incurred during the pandemic.

In Jennifer’s case, the funds would be crucial to help hire tutoring help so that she can find more work to make ends meet.

“One-size-fits-all won’t work here,” she said. “We can’t allow our special-needs students to fall even further behind. They will be more dependent on society as they transition to adults. These children are capable of so much if we give them the support they need.”

How to Take Away Something Positive from the COVID Crisis

How to Take Away Something Positive from the COVID Crisis

How to Take Away Something Positive from the COVID Crisis

By Kristin Barker

The year 2020 has been difficult for everyone. It has caused organizations and businesses to pivot from their planned strategies and shift quickly to identify new ones. It has forced individuals to find new career paths and create new support structures. It’s kept us from our families and isolated us from the communities we are used to counting on. In short, it has been one tough year.

It has been the most difficult year I have seen over my lifetime. But I will say it has also been inspiring. I have been inspired by the ability of our community and its leaders to come together. Leadership in Columbus has been able to connect in new and sometimes surprising ways to support and meet continually changing needs. 

Betsy Covington at the Community Foundation and Ben Moser at United Way acted very early in the year to coordinate COVID Response calls to keep Columbus connected, positive, and focused throughout much of this crisis year. Their efforts and the efforts of others to join hands and find out-of-the-box solutions in the moment has been very encouraging.

While seeing these efforts gives hope to myself and (I’m sure) to others, our Hiring Well, Doing Good (HWDG) partners also know there will be many additional challenges to address and emerging issues to tackle in the future. We began to talk about the shifts that were happening with our own efforts in Columbus. We heard about the new practices that our business and nonprofit partners were having to adopt and the heightened needs that continue to arise among the populations we serve. 

Our subcommittees began to ask, “What can we learn from our ability to pivot in 2020 that will allow us to react more effectively and responsively in 2021?” This question led us to develop a series of events focused on The Changing COVID Workforce

Our first event in this series will be held on January 21, 2021. This event will address Economic Forces During a Pandemic: How COVID is Shaping the Labor Market. During this event we examine the labor-supply gaps that exist and look at business policies and practices that impact workforce participation. This discussion will set the stage for later events and will consider the need for possible shifts in training and hiring practices. 

Our second event in the series will be on March 24 and will examine how we leverage our community assets to mitigate the impact of COVID. Betsy Covington and Ben Moser are going to speak during this event and help us think through what our community did really well in 2020. We will discuss how we can leverage what we have learned to navigate 2021 and to improve our community in the future. The final event on May 19 will focus on maintaining the strength of our workforce.

All three of these discussions will help us prepare to successfully repair our local economy in light of the COVID-related adjustments we have been forced to make along the way. We need to be sure that businesses (large and small) can prosper while keeping all people in our community safe and avoiding as much collateral damage from this virus as possible. 

There are also some existing issues that COVID has shined a light on. In comparison to other areas of the country, Columbus has very low average wages. This has created a situation locally where national stimulus efforts may harm our local economy disproportionately. In some cases, businesses have shared that their challenges in hiring additional labor have hamstrung their efforts to produce at scale or accept additional contracts. In other cases, employers have had to scale down production due to workforce restrictions. These situations open up an essential conversation about both average and living wages in Columbus, because it’s important for everyone to earn enough to support their families.

Ultimately, I see a heart at work in our community that is something I don’t believe you can find everywhere. There is a genuine and pervasive desire to work together for the common good. This is something special about Columbus, and I believe the Changing COVID Workforce event series will allow us to take greater advantage of our outstanding community spirit.