Compared with a bunch of carrots, a package of Twinkies, to take one iconic processed foodlike substance as an example, is a highly complicated, high-tech piece of manufacture, involving no fewer than 39 ingredients, many themselves elaborately manufactured, as well as the packaging and a hefty marketing budget. So how can the supermarket possibly sell a pair of these synthetic cream-filled pseudocakes for less than a bunch of roots?

For the answer, you need look no farther than the farm bill. This resolutely unglamorous and head-hurtingly complicated piece of legislation, which comes around roughly every five years and is about to do so again, sets the rules for the American food system — indeed, to a considerable extent, for the world’s food system.

An interesting look at the way we get our food, why we pay what we do at the checkout aisle, and why those in poverty face obesity:

For the last several decades — indeed, for about as long as the American waistline has been ballooning — U.S. agricultural policy has been designed in such a way as to promote the overproduction of these five commodities, especially corn and soy.

That’s because the current farm bill helps commodity farmers by cutting them a check based on how many bushels they can grow, rather than, say, by supporting prices and limiting production, as farm bills once did. The result? A food system awash in added sugars (derived from corn) and added fats (derived mainly from soy), as well as dirt-cheap meat and milk (derived from both).

The way low-income households deal with food scarcity is something I’ve blogged about in the past. It’s simply cheaper for low-income families to eat less nutritious foods. When you’re worried about paying the rent/mortgage, or whether you’ll be able to put gas in the car this week, or if you’ll have enough money to pay for prescriptions, making healthy choices in the supermarkets becomes a secondary concern.

It’s nice, however, to see the NY Times pick it up. If you want more information on poverty in America, I’d recommend this special report by The American Prospect. From the introduction:

In assigning and editing these articles, we were struck by a paradox. There is now growing ideological convergence on what it takes to end poverty. Liberals and conservatives agree that ending poverty is about both personal behaviors and rewards to work; about both values and economics. Ending poverty requires opportunities for wealth creation as well as income support, empowerment as well as transfer payments. It requires all children to be school-ready, which takes both stronger families and more effective public programs.

Yet mocking this hopeful consensus there is a disabling one. Too many elected officials, both liberal and conservative, believe that we know what to do, but just can’t afford it — whether because of budget deficits, or entitlement overloads, or national security demands. There is no shortage of good pilot programs, but time and again we hear that there is no money to take them to scale.

We disagree. This nation, on average, is twice as rich as in the 1960s. If America is to compete in a global economy, and honor its ideals, we can’t afford to waste a single American. There is no good excuse for failing to end poverty in our lifetime.

Well, “like” may be the wrong word. This is, of course, something I’ve talked about before, but graphics like this sure do make the discussion clearer.

Kevin has more.

2005 shows a very large increase in income concentration: the top 1% gains 14% in real terms from 2004 while the bottom 99% gains less than 1% (when including capital gains). The [previous] record peak of 2000 is surpassed even though 2005 is less of a high capital gains, high stock option year than 2000. By 2005, it looks like top incomes are showing strongly along all components: wages, business income, dividends, and capital gains.

Did you see a 14 percent gain during 2005?

The McClatchy analysis found that the number of severely poor Americans grew by 26 percent from 2000 to 2005. That’s 56 percent faster than the overall poverty population grew in the same period. McClatchy’s review also found statistically significant increases in the percentage of the population in severe poverty in 65 of 215 large U.S. counties, and similar increases in 28 states. The review also suggested that the rise in severely poor residents isn’t confined to large urban counties but extends to suburban and rural areas.

The plight of the severely poor is a distressing sidebar to an unusual economic expansion. Worker productivity has increased dramatically since the brief recession of 2001, but wages and job growth have lagged behind. At the same time, the share of national income going to corporate profits has dwarfed the amount going to wages and salaries. That helps explain why the median household income of working-age families, adjusted for inflation, has fallen for five straight years.

These and other factors have helped push 43 percent of the nation’s 37 million poor people into deep poverty – the highest rate since at least 1975.

I just checked, and, sure enough, Ezra has a post online about the latest news:

[W]e’re not just seeing an increase in poverty, we’re seeing an increase in severe poverty, to the highest rate since 1975. And this is all coming at the tail end of a fairly robust — at least if you believe the macroeconomic numbers — expansionary period.

Indeed, this has been the first expansion in which poverty has increased in every successive year (I haven’t seen the data for 2006 yet). That’s a fairly remarkable trend, and a real break with how our economy traditionally worked. Periods of growth used to aid every element of society, but we’ve become so unequal that even multiyear expansions will peter out before they reach the bottom segments of society. Meanwhile, the Luxembourg Income Study found that America has the highest child poverty rate of any of the 31 developed nations studied. As the wise Ms. Goodrich says, “that is one international competition the U.S. probably doesn’t want to win.” If only we weren’t so damn competitive.

Sen. Ben Altamirano (D-Silver City) introduced a minimum wage bill again this year (the Senate approved it on Friday), so the naysayers are out in force. We’re always treated with scare stories of businesses laying off workers and other myths:

A small point of order, entry-level jobs will be the only recipients of this wage hike. That means, fewer opportunities for advancement, and as obvious of a concept as it seems, the sad reality is that another generation of New Mexicans will be forced to look for advanced jobs outside of New Mexico. New Mexico already has an abundance of entry-level jobs.

Now, before we get started with some specifics, let’s see what the Legislative Finance Council said in it’s fiscal analysis (PDF) of SB 324:

Increasing the minimum wage is not without cost to business. The estimate of those costs are controversial and often rely on anecdotes rather than statistics. However, most studies have shown relatively minor impacts to business. EPI estimates that, not surprisingly, the leisure and hospitality industry will be most impacted but the estimated impact is an increase of one percent.

For all workers, the increase is 0.2 percent as a share of sales. A report by the Employment Policies Institute, a non profit in Washington DC that receives funding from the food and restaurant industry reports that there is a negative employment impact particularly among minorities.
(emphasis mine)

So, though businesses will be impacted negatively (more on that in a bit), who will benefit? Nationally, here are the numbers:

Analysis of the 2005 Current Population Survey reveals that the workers potentially affected by a minimum wage increase are mainly adults who typically work full time and provide significant income to their families. If the federal minimum wage were increased to $7.25 per hour by 2008, 14.9 million workers would see their wages rise. The vast majority (80%) of workers affected are adults age 20 and above. Twenty-six percent of these workers are parents, and as a result over 7.3 million children of low-wage workers would see their parents’ income increase if the federal minimum wage was increased to $7.25 per hour by 2008.

…

Furthermore, the earnings of minimum wage workers are essential to their families’ total income. While not all minimum wage workers are poor or are the sole breadwinner for their families, it is striking how important low-wage workers’ income is to their economic well-being. On average, families with affected workers rely on those workers for over half (59%) of the families’ total earnings. Nearly half (46%) of all families with an affected worker rely solely on the earnings of those workers.

So, only 20 percent of those affected are teenagers, while minimum-wage workers account for more than half of their families’ income. Seems like a group that could use some help. But what about the claims of upward mobility, that workers will be stuck in entry-level jobs? Well, according to a labor market analysis (PDF) completed by the Center for Economic and Policy Research:

Finally, policy also plays a role. Workers who live in states that have enacted a state minimum wage higher than the federal minimum wage have a lower probability of staying in a low-wage job.

Back to the business impact — what does economist Kash Mansori deduce when he looks at the facts:

But what this data does suggest is that any effect of raising the minimum wage on employment levels is almost certainly tiny, and generally swamped by other factors in the economy that influence employment much more strongly. The burden of proof is on those who think that higher minimum wages do indeed cause employment to fall, and as hinted at by the charts and tables presented here, it’s surprisingly tough to come by such evidence.

Indeed, actual evidence that a high minimum wage impacts jobs is hard to find. It’s rather easy, however, to find data to suggest the opposite. For example, Hawaii has a high minimum wage and the lowest unemployment in the country. Florida’s wage is indexed to inflation — the Golden State is ranked No. 9 for the percentage of workers employed. Mississippi, on the other hand, has no minimum wage, and the highest unemployment.

And speaking of Florida:

Before last year’s elections, a political action committee backed by the likes of Publix Super Markets and Outback Steakhouse had some hair-raising predictions about the effect of bumping up the minimum wage.

Thousands of jobs would be lost if voters increased the state’s rock-bottom wage to $6.15 from $5.15, said one e-mail sent out by the Coalition to Save Florida Jobs.

Jobs would be outsourced overseas, the e-mail said. Even companies that paid above the minimum wage would be forced to raise pay for everyone, said retailers and restaurants that opposed the amendment.

Today, though, it’s hard to find much wreckage in the Florida retailing and restaurant industries, the two groups that bankrolled the Coalition to Save Florida Jobs.

Aside from all that, why bother raising the minimum wage? It’s an economic question, right, so why don’t we let the market figure it out? Well, the Federal Reserve is always willing to help the market out when wages become a problem:

Wages have risen so swiftly that some economists worry that they could push inflation up on their own, by forcing companies to raise prices. Last week, the Federal Reserve chairman, Ben S. Bernanke, warned that the central bank might have to raise interest rates again. “One factor that we are watching carefully is labor costs,” he said.

So, we know companies are being looked after. But, again, why raise the minimum wage? Well, perhaps we don’t want it lagging too far behind the federal poverty level:

Every day that Congress fails to enact a higher minimum wage, workers lose purchasing power. However, if the minimum wage bill currently under debate in the Senate (HR 2) were immediately passed, this gap would be significantly reduced. In 2009, this bill would raise full-time minimum wage workers above the poverty line for a family of two for the first time in over a decade. While this modest bill would still place minimum wage workers 18% below the poverty line for a family of three, it would provide much needed relief to low-wage workers and their families.

For the first time in a decade? You’ve got to be kidding me! Why is this even a debate?

Scare stories aside, we’ve seen time and time again, in states and municipalities, that an increased minimum wage helps those who need help the most, and doesn’t necessarily impact business negatively. It’s time to stop the chicken little act.

Another Record High for the Dow

Not that anyone seems to care nowadays.

I think Americans are very concerned with encomic figures. For example, USA Today found that 58 percent of Americans think the economy is getting worse:

Low unemployment, falling gas prices and a record-setting stock market typically would translate into warm feelings about the economy. But 55% of Americans rate the economy as only fair or poor, and 54% say it is getting worse.

Most Americans don’t care that the Dow is doing so well. They’re facing huge increases in health care costs, wages that barely keep up with inflation, and predatory lending. But the Dow is skyrocketing, so that must mean everybody is reaping the benefits.

None of that is the fault of the party in power, however. The second post at NM For Sale points the finger at the real culprits:

The post is titled “Media Bias.”

I would venture that the media can influence public opinion in a number of issue areas. However, when it comes to their pocketbooks, I imagine there’s little the media can do to change Americans’ perception of reality.

UPDATE 3:45: For those of you stopping by from NM For Sale, a quick note. As I stated above, a majority of Americans think the economy is bad, and an even greater number think it’s getting worse. And as my post last week indicated, sectors of the economy are doing great — that whole “trickle-down” effect just isn’t happening.

Today’s post (just like this one and this one and this one), is listed under the category “income inequality.” The basic premise: working families feel the pinch, while the rich get richer. And that’s the disconnect. It’s not a problem of the media neglecting to report strong investment growth, as Republicans want you to believe. Indeed, the NM For Sale response to my post fails to address the underlying theme: actual flesh-and-blood Americans are the ones who don’t see the benefits of our strong economy, when they shop for groceries, fill up at the pump, and go to the doctor (if they have health insurance, that is).

Republicans don’t worry about that, because they don’t recognize it — they’re out of touch with American working families. Instead, they’d rather come after me.

Republicans have been harping about the Dow, and how the economy is chugging along and everything is great. It speaks of that great disconnect, where our leaders likely have no idea about the price of a gallon of milk.

Of course, I’ve blogged about income inequality here before, but Kevin had this great chart and article (originally from McClatchy) showing why most Americans aren’t happy with the economy’s performance:

The U.S. economy is indeed strong. Although growth is slowing, it’s essentially been steady since mid-2001. September’s unemployment rate was a low 4.6 percent and the Dow Jones Industrial Average reached record highs last week.

But through September, the growth in hourly wages was flat or negative for 27 of the previous 29 months, according to Labor Department data. Wages for blue-collar and nonmanagerial workers – 80 percent of the work force – are growing at a 3.9 percent annual rate, the Labor Department reported in September.

[snip]

Workers are barely keeping up. Health care, wages and energy prices are consumers’ top three economic concerns, according to a Gallup poll in September.

“That has to do with things like stagnant wages, fears of jobs being outsourced, income security. These are on people’s minds, particularly in lower- and middle-income areas,” said Dennis Jacobe, chief economist in Charlotte, N.C., for Gallup.

“I think it’s quite clear to people that their paychecks are being squeezed when they try to meet their family budgets,” said Jared Bernstein, the chief economist for the liberal Economic Policy Institute in Washington. “There’s a disconnect between overall economic performance and paychecks of working families.”

And there you have it. If the stock market keeps rising, and the economy is doing so well, why aren’t working families seeing the benefits? Where is all that money going?

The good news is that women are now making 77% as much as men, slightly higher than last year. The bad news is that this is only because the median income of women fell at a slightly lower rate (-1.3%) than the median income of men (-1.8%). Yipee.

Needless to say, per capita income increased by 1.5%. In other words, the total money income of the United States increased last year by more than $100 billion, and yet the incomes of the average worker went down. So where do you think that $100 billion went?
(emphasis mine)

I’ve blogged about income inequality before, but the news yesterday was hard to stomach because of context — I first saw the figures during a break at the NM Legislature’s Health and Human Services Committee meeting. Their topic for the morning: hunger and food insecurity. Representatives from various agencies and organizations gathered at Western New Mexico University to speak on behalf of New Mexico’s Task Force to End Hunger, formed by Gov. Bill Richardson in 2003.

The committee saw data regarding New Mexico and its fight against hunger and food insecurity. Turns out, things like median income, affordable housing, utility costs and access to child care all play a role in the number of people in this state who go hungry. And it’s a big number. According to a February 2006 report on hunger (PDF), some 237,900 New Mexicans received emergency food from food banks in 2005, a 38% increase since 2001. Some other highlights:

• 41% reported having to choose between food and utilities or heat in their homes
• 32% chose between food and paying for rent or their mortgage
• 28% had to decide whether to eat or pay for medicine or medical care

The biggest increases came from children and seniors seeking assistance. They said that 9% of those served by the food banks were seniors, most of who are on fixed incomes. For this group, factors like increasing utility costs become a burden quickly. One in three people served by the food banks — 81,000 New Mexicans — were children. One in six of those children went hungry regularly.

Members of the Task Force were quick to point out that the situation is not limited to victims trying to live off handouts. More than half of the people served are families with at least one employed adult. In addition, among families, half owned their homes, while another 38% rented.

All of this is to show how our economy, while great for the rich, is still pretty bad for the poor and middle-class families of America. Corporations continue to make record profits, but workers don�t share in the good fortune, nor, as the census figures show, do workers even manage to keep up.

And, as evidenced by the hunger statistics, all of the major social issues are intertwined. For more on the complexity of these issues in the age of Wal-Mart, I’d check out Ezra:

Rather, Wal-Mart is setting the norms and standards for the coming service economy. Where GM and Ford played this role for the manufacturing sector — and the unions forced them to use their power to create the American middle class — Wal-Mart is assuming primacy for manufacturing’s successor, and doing so without the union involvement or commitment to high wages that their predecessors exhibited.

He also has some nuggets on poverty in America:

And let’s make this very clear: 2001-2005 was an expansionary period. The economy was getting better, growth roaring forward, conditions easing. And yet, during that time, millions of Americans fell into ever-more severe impoverishment.

This has never happened before. A few years ago, economists marveled at the first time a three-year expansion had seen three straight increases in poverty. A year later, they wondered how it had happened for a fourth time. We’d never seen three — much less four! — years of expansion coincide with straight increases in the poverty rate. In the past, rising economic tides had lifted all boats. Now, the poor are capsizing.

Sorry for the long post, but, as several people stated yesterday during committee testimony, hunger is not a visible problem. It deserves your time, and mine.

Please check out this aftenoon’s edition of the Silver City Daily Press for more information on the committee hearing, including descriptions of existing programs and highlights of proposed solutions for hunger and food insecurity.

Among the best of the new Times Select features are their “Talking Points,” long backgrounders penned by the editorial writers on all manner of major issues, from inequality to global warming. This week, Teresa Tritch published one on “The Rise of the Super-Rich,” explaining that “[i]ncome inequality used to be about rich versus poor, but now it’s increasingly a matter of the ultra rich and everyone else.” Few stories are as important, or as poorly understood. From 2003 to 2004, real average income for the top 1 percent of households shot up by 17 percent. For the remaining 99 percent, the average gain was under three percent. Indeed, the top one percent accumulated 36 percent of all income increases in 2004, a six percent increase from 2003.

In the past, I’ve called this “The Conehead Economy” — plenty of growth in the economic body, but all of it happening in the top percent. Were that to happen to a person, you’d see six inches of growth in their forehead and doctors everywhere would be puzzling over how to correct the deformity. As it is, the media trumpets the growth, the politicians backslap over the roaring economy, and everyone wonders why the average American seems so unhappy. Meanwhile, the media rarely mentions data showing that incomes for the bottom 60 percent have grown by merely 20 percent in the last 30 years (the top one percent saw that much growth last year) — with nearly all those gains coming during the mid-‘90s. Indeed, this sort of economic concentration hasn’t existed since 1929 — hardly a golden period in American life.

Meanwhile, government policy is explicitly aimed at accelerating the income distortions. “In 2006, the average tax cut for households with incomes of more than $1 million — the top two-tenths of 1 percent — is $112,000 which works out to a boost of 5.7 percent in after tax income. That’s considerably higher than the 5 percent boost garnered by the top 1 percent. It’s far greater than the 2.5 percent increase of the middle fifth of households, and fully 19 times greater than the 0.3 percent gain of the poorest fifth of households.” You’d think, given the trends, the government would be using the tax code to smooth out the inequality. Instead, they’re giving it a helping hand. Next up, of course, is the effort to cut the estate tax. But don’t object, o’ Democrats, lest you be accused of class warfare, which, as we know, only happens when the middle class wants their wages to keep up with productivity, as they did in the last generation. Had those trends continued, the median income would now be in the $60,000s, not the $40,000s. Instead, the top 1 percent accounted for 33.4 percent of total net worth in 2004, while the bottom 50 percent commanded 2.5 percent. Yes, you read that right. In the Conehead Economy, class warfare is a fact of life, and the super rich are winning in a rout.