In San Francisco, Mayor Gavin Newsom and other officials were concerned by the practices of payday loan companies. Typically pay day loan companies loan small amounts of money to people with no credit, at high interest rates.
With interest rates as high as 400% APR and a two-week loan term that does not give much of a chance for the loan to be repaid on time, payday loans trap mostly low-income borrowers in a cycle of debt. On average payday loan customers are paying back $800 on a $300 loan, costing consumers more than $4 billion in predatory fees each year.
San Francisco officials have started a new program called Payday Plus SF, where folks can get small loans, and pay a maximum of 18% interest. Says Newsom:
Payday Plus SF is latest in a series of successful financial empowerment and financial literacy programs spearheaded by San Francisco Treasurer José Cisneros. This program builds on an initiative the Treasurer and I launched three years ago called Bank on San Francisco, which has helped more than 45,000 thousand unbanked San Franciscans into checking accounts. Seventy other cities and states across the country are already replicating this program locally. And this week, I met with Treasury Department officials in Washington to talk about replicating Bank on San Francisco on a national scale.
Last month, we launched the Payday Plus SF program at 13 San Francisco credit union locations. This first of its kind program is already showing results.
Bank On San Francisco began as a way to help people open checking accounts, rather than pay outrageous check cashing fees.
For three decades, Virginia Johnson – who is 71 years old and lives on a fixed income – spent nearly $200 a month to have her Social Security checks cashed and money orders prepared to pay bills for herself and her disabled grandson.
Johnson relied on check-cashing outlets along Market Street for these services because she did not qualify for a traditional bank account. And every month she felt she was taking her life in her hands when she walked out onto the street with wads of cash in her pocket and made her way back to her room at a residential hotel, where she worried about being robbed.
Payday lenders and check cashing outlets prey on people who are barely making ends meet as it is. Both Payday Plus SF and Banking on San Francisco are solid, community based solutions that help people – and helping people helps the community.
The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see our chart here.
Granted, not all of these funds have been used – but they could have been. Imagine if even a quarter of this money had been spent on job creation and helping small business entrepreneurs get loans? Instead, billions were shoveled into banks who responded by refusing to loan the rest of us money, while handing out bonuses to the same guys who drove the financial bus over the cliff.
MOJO also takes a look at the behavior of the banks in: Too Big to Jail?
MAYBE WALL STREET should open a casino right there on the corner of Broad, because these guys simply cannot lose. After kneecapping the global economy, costing millions their homes and livelihoods, and saddling our grandchildren with massive debt—after all that, they’re cashing in their bonuses from 2008. That’s right, 2008—when amid the gnashing of teeth and rending of garments over the $700 billion TARP legislation (a mere 5 percent of a $14 trillion bailout; see “The Real Size of the Bailout”), humiliated banks rolled back executive bonuses. Or so we thought: In fact, those bonuses were simply reconfigured to have a higher proportion of company stock. Those shares weren’t worth so much at the time, as the execs made a point of telling Congress, but that meant they could only go up, and by the time they did, the public (suckers!) would have forgotten the whole exercise. It worked out beautifully: The value of JPMorgan Chase’s 2008 bonuses has increased 20 percent to $10.5 billion, an average of nearly $6 million for the top 200 execs. Goldman’s 2008 bonuses are worth $7.8 billion.
And why are bank stocks worth more now? Because of the bailout, of course. Bankers aren’t being rewarded for pulling the economy out of the doldrums. Nope, they’re simply skimming from the trillions we’ve shoveled at them. The house always wins. Indeed, 2009 bonuses are expected to be 30 to 40 percent higher than 2008′s.
Meanwhile, the unemployment rate creeps higher and higher, as does the number of home foreclosures. It sure is nice of us working folks to go broke, so the bankers don’t have to.
We’re sure to see all kinds of economic reporting in the days and weeks ahead purporting to show that there’s no need for more concerted, large-scale action to address the jobs crisis. Highly detailed historical analyses will be used to try to bolster the argument that jobs will come back because “they always do”, that recovery is “just around the corner”, so there’s no need for new job-creation initiatives.
Under the curious headline Steep Job Losses Offer Hope for Fast Rebound, Floyd Norris, chief financial correspondent for the New York Times began his weekly “Off the Charts” column Jan. 16 asking:
Will labor markets in the United States remain weak for an extended period?
For many economists, the answer is yes. They point to the “jobless recoveries” that followed the two previous recessions, in 1990-91 and 2001, and see no reason this recovery should be any different. That has led some to call for a new round of stimulus spending.
But then comes the “but”:
But history indicates there may be more hope for a fast rebound than is generally expected. The two jobless recoveries were preceded by recessions in which employment declines were modest. But after recessions involving a sharp drop in employment, the rebounds have been much stronger.
Citing historical graphs, Norris makes the case that the sharp 5.2% increase in unemployment from December 2007 to October 2009 makes this recession comparable to the three other post-World War II recessions with steep job losses — the recessions of 1957-58, 1960-61 and 1981-82.
And because those three recessions were followed by rapid recoveries with sharp jobs increases, Norris contends, jobs may come back faster after this recession as well.
Or at least that’s the hope that is dangled before us. The two not-so-scientific assumptions being made are: first, that the economy is somehow magically guided by past statistical data; and second, that the current Great Recession is actually comparable to those previous three recessions. Since the first assumption should need no further explanation, let’s look at the second.
The recessions of 1957-58, 1960-61 and 1981-82 all did have sharp declines in employment, but none of them matched the depth of the current downturn. An even bigger difference is the record percentage of long-term unemployed in this recession. Currently more than 1 in 3 jobless workers have been out of work for 27 weeks or more. Longer durations of unemployment tend to make finding a new job even more difficult. And the sheer number of long-term jobless has exploded.
Every year, the average U.S. resident spends 100 hours commuting to and from work. As the Census Bureau notes, that’s more than the typical amount of vacation time we get each year (about 2 weeks).
The Daily Beast has compiled a list of the 75 worst commutes in the country, by which they mean the worst stretches of highway. It makes for fascinating reading, but knowing which stretches of highway are the worst leaves out so much that’s important about commuting.
A couple years ago, Nick Paumgarten wrote a great New Yorker article about long commutes, which gets into the issues a little more.
“Drive until you qualify” is a phrase that real-estate agents use to describe a central tenet of the commuting life: you travel away from the workplace until you reach an exit where you can afford to buy a house that meets your standards. The size of the wallet determines that of the mortgage, and therefore the length of the commute. Although there are other variables (schools, spouse, status, climate, race, religion, taxes, taste) and occasional exceptions (inner cities, Princeton), in this equation you’re trading time for space, miles for square feet. Sometimes contentment figures in, and sometimes it does not.
–snip–
“I was shocked to find how robust a predictor of social isolation commuting is,” Robert Putnam, a Harvard political scientist, told me. (Putnam wrote the best-seller “Bowling Alone,” about the disintegration of American civic life.) “There’s a simple rule of thumb: Every ten minutes of commuting results in ten per cent fewer social connections. Commuting is connected to social isolation, which causes unhappiness.”
People spend their lives in cars to have nicer houses they spend almost no waking hours in. It’s never made a lot of sense to me, but I guess it makes sense to the people who do it. But there are big political issues that get overlooked in the rhetoric of individual choice. Like why does the government spend so much money on roads while public transit systems suffer?
The New York City area has only one entry on that 75 worst list, despite its huge population and aging infrastructure. But the area is built around public transit—not just the subway but the well-developed and heavily-used commuter rail system extending far into New Jersey and Connecticut. In 2008, average weekday subway ridership was 5.2 million in New York. The next-busiest subway system was the Washington DC metro, which had just over 727,000 trips per day.
By contrast, Paumgarten’s article focuses on Atlanta (though it, too, only shows up once on the Daily Beast’s list):
Ninety-four per cent of Atlantans commute by car, and the city has the highest annual per-capita gasoline costs in the country. According to the last census, the travel time in Atlanta grew faster in the nineties than in any other American city, and it’s getting worse. Travelling ten miles can take forty-five minutes.
Road-building doesn’t much help. Atlanta is a showcase for a phenomenon called “induced traffic”: the more highway lanes you build, the more traffic you get. People find it agreeable to move farther away, and, as others join them, they find it less agreeable (or affordable), and so they move farther still. The lanes fill up.
I guess I sound like Atrios here, and I’m ok with that, but it’s just a shame that one set of choices people make has been supported through government policy and spending to the detriment of another set of choices, although the former creates pollution and expense.
And what will suburban poverty mean for the poor? I think that concentrations of poverty in central cities — home to governments, business districts, and iconic locations — made the plight of the very poor harder to ignore. Will the suburban poor be out of sight and therefore out of mind? Suburbs are also less walkable than primary cities, with far fewer public transit options. How will the poor survive in places where they’re a breakdown away from total isolation? Will American suburbs become more like Parisian banlieues?
Yesterday, Working America received a whole bunch of angry faxes from Wells Fargo.
Only, the anger was ours—they just couldn’t think of anything better to do than try to send it back to us. We had asked our members to let the big banks know that we’re angry that they’re handing out giant bonuses to executives while millions of unemployed working people struggle. We’re angry that hundreds of billions of dollars in taxpayer money went to bailing out the banks, and now they’re opposed to the regulations that would protect us from future financial crises.
We offered members a sample letter or the opportunity to write their own. Our sample letter read:
This is your final notice. You’ve gone over the line too many times—and made it clear you’ll keep going over the line until someone stops you.
We’ve had enough with the greedy and reckless abuses on Wall Street. Now, with 10 percent unemployment and families losing their homes to the mortgage crisis that Wall Street created, we hear that bank executives will be taking home six- and even seven-figure bonuses—bonuses made possible by our tax dollars.
It’s past time that the interests working people in the real economy are put before those of reckless CEOs. Wall Street has made clear that it will not rein in its own excesses. That means that the only way to restore balance to the American economy is for the government to rein in Wall Street.
That’s why I’m calling for my senators to support legislation that:
1) Gets back the bailout money through a Financial Crisis Responsibility Fee on the largest banks and those that have taken on the most debt.
2) Creates a Consumer Financial Protection Agency to provide the oversight that’s been missing in recent years. The regulators we trusted to protect consumers from Wall Street risk-taking have failed us, and it’s time for a new, independent watchdog agency.
Thousands of Working America members sent faxes telling the banks how angry they were—and we emailed their letters to their senators as well. Wells Fargo, which recently gave $25 million in stock bonuses to just four executives, apparently didn’t like hearing how angry people were.
So they faxed the letters they got back to us. Now, we knew the letters had been sent, so we can only figure they wanted to let us know it bothered them. If you’d like to send a letter to Wells Fargo and other banks that have been announcing huge bonuses for their executives, you can do so here.
We really don’t mind getting a few more faxes from Wells Fargo.
As we honor the memory and work of Dr. Martin Luther King, Jr. this week, it is important to recall the movement as well as the man. The most eloquent and impassioned voice of the civil rights struggle, Dr. King came to symbolize a movement that grew out of many seemingly small moral acts, by thousands of people in disparate localities. And the brave souls who participated in those acts didn’t start by asking what was considered politically possible, or what response they might reasonably expect from the Congress.
Instead, they knew that they had to identify grievous wrongs that needed righting, and make those wrongs clear to the country through the courage and conviction of their simple acts. Many of these acts never made headlines, but their sheer number and continuity helped create the conditions where some of those acts grew into seminal moments that made the movement grow and gather momentum.
The simple act by Rosa Parks of refusing to give up her seat on a public bus sparked the Montgomery bus boycott in 1955.
The massive March on Washington in 1963, where Dr. King delivered his iconic I Have A Dream speech, was organized by many tens of thousands of people through scores of different groups and organizations. And, as New York Times columnist Bob Herbert reminds us today:
It has been easy for people to forget in the decades since we lost the Rev. Dr. Martin Luther King Jr. that he was a passionate fighter for economic justice as well as civil rights. The two goals were as closely linked as the hydrogen and oxygen atoms in water.
The historic gathering in 1963 at which Dr. King delivered his famous “I Have a Dream” speech was officially called the March on Washington for Jobs and Freedom.
The courageous voting rights drive in 1964 that was called Mississippi Freedom Summer saw the murders of three young civil rights organizers, exposed the brutality of freedom’s opponents, and clarified the need for national voting rights legislation.
The March from Selma to Montgomery that was viciously attacked on the “Bloody Sunday” of March 7, 1965, was rejoined two days later with Dr. King in the lead, in an historic struggle that continued through the month and captured the attention of the nation.
The movement Dr. King fostered, and in many ways symbolized, won landmark civil rights and voting rights legislation, overturned the institution of segregation in the South, and began to overcome the historic racial prejudice in America.
But Dr. King increasingly turned to fight the deeper wrongs of poverty, joblessness and economic inequality.
Today I have no doubt that Dr. King, were he alive, would be outraged at the vast injustice that has been perpetrated against America’s working people of all colors, poor and middle class alike. More Americans have been unemployed in this country every month since March of last year than at any time in our history — even more than at the depth of the Depression in 1933. Not percents — people; now numbering 15 million officially.
This devastation of lives and human dignity is not an act of nature and did not need to happen. It is solely the result of the selfish greed and mismanagement of financial and economic policy by an insular and powerful elite. And this elite stands opposed at every turn to just and timely efforts to address the damage, restore jobs and right the vast economic imbalances we suffer.
At such a time as this, perhaps we should reflect on this aspect of Dr. King’s legacy and realize, as he did, that sometimes it takes a movement.
Have you seen Up in the Air? In that movie, George Clooney plays a guy who fires people for a living. (This is a real job. I’ve blogged about it, though I somehow can’t find the post.)
One of the amazing things about the movie, which has been commented on by a number of reviewers, is that in many scenes, the people he’s firing are played by actual unemployed people, talking about their experiences.
And all I could think about as I watched those scenes was our video for the Unemployment Lifeline:
Because the people in that movie could’ve been the people in this video. And it really drives home how many people are out there who you could put on camera and they’d have the same kind of stories that hit you in the gut in the same way.
Franken would like to see increased infrastructure spending and incentives for “green jobs” — jobs in the fields of renewable energy and weatherization — in legislation to be considered by the Senate. Senate aides have already been working through recommendations for their jobs bill this month and hope to bring it to the floor once healthcare reform is finished.
The senator said the idea of a jobless recovery is “absurd” and Washington needs to work hard to reverse the unemployment rate. “My biggest fear is we don’t go far enough,” he said.
Franken also said another key plank of the Democrats’ job-creation agenda is reform of regulations governing the financial sector. He said the Senate needs to approve a consumer financial protection agency like the House did in its own financial regulatory reform package.
For the longer term, said Trumka, the nation must invest in green and clean energy jobs, rebuilding infrastructure, training and incentives for firms that create and keep jobs in the United States.
We can’t have half measures. We must take measures big enough to correct the problems. Even when times are good, people can afford to buy cars, but they don’t pay for it all at once. We can do the same thing for jobs, and it’s an investment that will pay off in the future.
Liz Freeburg, from Circle Pines, Minn., has been out of work for 18 months since losing her sales job in the iron industry. While she and her husband and three special-needs children struggle, banks and Wall Street are handing out bonuses and “padding their pockets just like insurance companies with medical insurance.” Freeburg asked:
What can be done to make sure banks stop taking advantage of us and contributing to our financial situation?
Trumka said it was “quite frankly outrageous” that after taking taxpayer money in the bailout, the banks were back “to business as usual” In handing out obscene bonuses. He pointed to the efforts of the AFL-CIO in trying to tighten corporate governance rules through shareholder actions, new laws and regulations.
Franken outlined a handful of steps Congress can take to create those jobs, including:
Giving employers tax credits for hiring new workers.
As an example, Franken pointed to the Minnesota Emergency Employment Development Program, known as MEED. Developed during the farm crisis of the 1980s, MEED provided state subsidies to employers for hiring unemployed workers who had run out of their unemployment benefits. MEED put 42,000 Minnesotans to work, mostly in private-sector jobs.
“It created incentives for businesses, the jump start they needed to start hiring people,” Franken said. “This is a program I think we can take from Minnesota’s past and bring it to Congress.”
Continuing to invest in public works and infrastructure projects. Franken said he wants Congress to continue to use the stimulus package passed last year to get building trades workers off the bench and back on the job.
“We can’t let our nation fall behind with outdated roads and bridges and public transit,” he said. “Making robust investments in these kinds of projects will get a lot of people back to work and reinvesting in our economy.”
Investing in green jobs. Franken specifically identified green manufacturing and energy retrofitting as areas where Congress can target its investment for maximum, long-term job creation.
“This year, our first priority and our second priority and our third priority are creating jobs,” Senator Al Franken told 25,000 unemployed Working America members on a tele-town hall today. With 500,000 of our members unemployed, Working America’s strong priorities are putting people back to work and making sure that, in the mean time, jobless workers have the resources and support they need to get by. So today we reached out to unemployed members to give them a chance to get information, ask questions, and hear about opportunities to take action.
Sen. Franken was joined on the call by AFL-CIO President Richard Trumka and National Employment Law Project executive director Chris Owens, with Working America’s executive director Karen Nussbaum moderating.
Two unemployed Working America members opened a question-and-answer section that ranged from the broad economic issues to advice for specific situations.
Marvin, from Yellow Springs, Ohio, had worked in the food service industry his whole life as a chef and a manager. He’s been unemployed since the residential college he worked at closed their facility and laid off the staff. He said,
My experience is basically that the service industry is where people spend their surplus money, and no one has any, so we have no jobs. I’ve seen a lot of companies advertise jobs as entry level where before they were looking for people with more experience and were much higher paying.
I’d like to see the government take a more proactive stance to run the economy from the bottom up instead of the top down. So my question for you is what should the government do to create jobs? And not just short term jobs but ones that will stick around.
Sen. Franken responded that “we have to start manufacturing again,” investing in research and development and making use of the strong skills in manufacturing so many American workers have, and “we have to rebuild our infrastructure,” because America’s schools and roads and bridges are in need of repairs that would put jobless workers back on the job. He also stressed the importance of investing in green jobs.
Both Sen. Franken and President Trumka strongly and repeatedly stressed the importance of jobs legislation and economic stimulus. Trumka pointed out that when last year’s American Recovery and Reinvestment Act was passed, it was for a smaller amount than was anticipated to be necessary, because Republicans in the Senate stonewalled and obstructed the full amount needed. With the recession having proven deeper than expected, making the stimulus that was passed even more inadequate than initially anticipated, Trumka pointed to the danger of further half measures. Deficit spending now to create jobs and stimulate the economy, he said, is an investment in the future.
Other callers had questions about the billions of dollars in executive bonuses the big Wall Street firms are announcing this week, the effect of buying goods produced cheaply overseas, and unemployment benefits. NELP’s Chris Owens urged listeners to call their senators in support of extending unemployment benefits, which will begin running out for some people at the end of February.
So many callers had questions that time ran out before all could be addressed during the tele-town hall, but this wasn’t just a one-off event. Working America is committed to working with all our members to promote strong jobs and economic legislation to put people back to work, rein in the banks, and restore balance to our economy.
In the mean time, if you’re unemployed, check out our Unemployment Lifeline for resources in your area and advice.
