Category Archives: Poverty & income gap

Henrico’s Housing Whack-a-Mole

Delmont Street property to be demolished

Henrico County, following the priorities of its new Democratic Party majority on the Board of Supervisors, has created a $2 million fund to head off neighborhood blight by financing renovations and redevelopment of the county’s aging housing stock, reports the Richmond Times-Dispatch.

As an example of what the fund can do, county officials pointed to a boarded-up property on Delmont Street near the Richmond Raceway that has been the site of nine fights, 26 firearm violations, and 13 vice incidents over the past five years. Three murders have happened nearby. County administrators will ask the board Tuesday to buy the property for $50,000 and demolish it.

Let us concede up front that such a development surely will be welcome to law-abiding residents of the neighborhood. In my younger days I lived in a neighborhood with dilapidated crack houses on the block where murders occurred, and I welcomed any action by Richmond city authorities to clean them up. I can sympathize with the Delmont Street neighbors.

But let us not delude ourselves that we’re doing anything more than playing whack-a-mole. Henrico can demolish the building on Delmont Street, but that does nothing to reform the behavior of the derelicts who caused the problems in the first place. The drug addicts, prostitutes, and criminals who turned the building into a hell-hole will just move to another location — perhaps an abandoned building, or if none is readily available, into a neglected property charging the cheapest rent.

At heart is the question: Do run-down buildings create poverty and the anti-social behaviors associated with poverty, or do people displaying anti-social behaviors gravitate toward run-down buildings and hasten their ruin?

The conventional wisdom among the professional caring class suggests that improving the housing stock will not only ameliorate the material conditions of poverty but address poverty directly. But that ignores why housing conditions deteriorate in the first place. Broadly speaking, the housing stock degrades for two reasons. First, because poor property owners lack the financial resources to keep up with the maintenance. Second, because certain classes of tenants, especially those inclined toward criminality, subject their houses to greater abuse.

Unless public policy addresses those realities (1) by fostering higher employment rates, incomes and spending power for poor people, and (2) by discouraging criminal and anti-social behavior, spending public funds to combat blight is as futile as a dog expecting to catch its own tail. This should be obvious by now. As a society, we have spent untold billions of public and charitable dollars combating urban blight by tearing down or renovating run-down buildings, and we have been doing this for decades. Yet the blight never disappears. It just moves from one location to another.

This is an iron law of economics: As long as poor people and the criminally inclined are with us, they will gravitate to the lowest-cost neighborhoods because that’s all they can afford. When they take over a neighborhood, the criminally inclined will run the buildings into the ground, those with financial means will flee, and the law-abiding but poor will lack the resources or incentive to maintain their properties.

Sadly for Henrico, it is on the receiving end of this migration pattern. Older neighborhoods in Richmond, being closer to the vibrant city center and benefiting from walkable streets, are being gentrified. Poor people are being displaced. And they’re moving to the old, non-walkable subdivisions of cheap, ugly, 50s- and 60s-era ranches where nobody else wants to live, mainly in Henrico and Chesterfield.

Henrico will need a lot more than a $2 million fund to cope with that reality.

Meanwhile, if we want to truly do something to improve the quality of the housing stock, we should stop throwing away money on futile efforts to eliminate blight and start investing in programs that address incomes and criminality.

Spend Less, Invest More, Improve Credit Scores

U.S. Personal Saving Rate since 1960. Too low for all Americans.

The editorial board of the Virginian-Pilot finds it a matter for “concern” that African-Americans are denied mortgage loan applications in the Hampton Roads region at a higher rate than whites. “In Hampton Roads,” writes the Pilot, black applicants during the study’s period — 2015 and 2016 — were 2.4 times more likely to be denied mortgages than white applicants.

As I began reading this editorial, I braced myself for the usual insinuations that the disparity is due to discrimination, white privilege, institutional racism, or whatever. But I was pleasantly surprised. The editorial writers acknowledged that the study by the Center for Investigative Reporting from which they drew their data did not account for the credit scores of borrowers (or loan-to-asset ratios, for that matter). Indeed, they went so far as to aver, “There is no evidence that the gap is a direct result of discrimination.”

Still, they find the disparity troubling, and they suggest that “something more than economic trends might be a factor.” The report should prompt a “serious review” of lending practices to ensure that there’s “no subtle discrimination at play, no policies or actions that could — even unintentionally — lead to racial discrimination.”

I applaud the Pilot editorial writers for breaking free of the simple-minded institutional-racism narrative. But they don’t go nearly far enough. They remain so ensnared by progressive assumptions that they can’t imagine any other explanation for the disparity than a subtle, as-yet-undetected bias — even though, as they acknowledge, mortgage lenders say it wouldn’t make financial sense to deny a loan to any qualified candidate.

I would refer the editorialists to a December 2017 commentary by Alfred Edmond Jr. in Black Enterprise. Edmond addresses a fact, celebrated in other contexts, that African-Americans were estimated in 2016 to wield some $1.2 trillion in consumer buying power. Buying power is not the same as wealth, he cautions.

Addressing other blacks, Edmond writes:

The ability to build wealth depends on the degree we control our spending, so that after we pay income and other taxes, and for necessities such as housing, food, and transportation, we have something left over to not just spend, but to earmark for emergency savings, retirement savings, an investment portfolio, buying real estate (beginning with our own homes), financing businesses, and acquiring other assets.

Right now, while black income has grown rapidly over the past 70 years, our spending has grown even faster, which means we are spending every penny we make and then some (which is the case for most Americans). And what allows us to spend more than we make? Easy access to credit, of course. …

The truth is that money is in our garage, in our homes, and on our bodies, in the form of consumer goods, such as cars, clothes, electronics, and experiences (such as that daily, gourmet coffee-dessert) that we’re convinced we deserve and can’t live without, or even defer long enough to save, rather than borrow at interest, to have. And far too much of our money is going toward interest payments on the debt we took on (much of it via credit cards) to make these purchases.

Blacks can pursue one of two paths, he says:

A poverty-creation lifestyle. Spend more than you make, regardless of income, and borrow, paying interest and fees, to cover the difference. After providing for basic necessities (and often instead of doing so) you spend all of your income on high-priced, low-value, depreciating assets, such as clothes, cars, jewelry, etc.

A wealth-creation lifestyle. Spend less than you make, regardless of income, and save and invest the difference, earning interest, dividends and capital gains. Invest as much as possible in sensibly priced, appreciating assets, such as stocks, bonds, mutual funds, real estate, etc.

What Edmond writes, of course, is true for everyone, not just African-Americans. Personal thrift and saving were long considered virtues in the United States. But with the general disparagement of “bourgeois virtues” and the rise of hyper-consumerism, the willingness to defer gratification has gone out of style. Savings rates in the U.S. are half of what they were in the 1960s, 70s, and 80s. (See the chart atop this post.) For whatever historical or cultural reason — perhaps attributable to past discrimination and a desire to enjoy the material blessings that other Americans take for granted — African-Americans spend more (thus accounting for their punching above their weight in consumer spending), save less, accumulate more debt, and have worse credit scores. Which means they get turned down more frequently when they apply for mortgages.

Rather than engaging in wild goose chases, seeking auras and penumbras of discrimination in the banking industry, society should be encouraging African-Americans to embrace the virtue of thrift. Resources devoted to underwriting deeply flawed and deceptive “investigative” reporting such as the Center for Investigative Reporting study (see my take-down here) would be far better deployed to teaching financial literacy to African-Americans — indeed, to all Americans, for financial illiteracy and irresponsible spending know no ethnic or racial bounds. Meanwhile, the editorial writers of the Virginian-Pilot would be well advised to broaden their reading list. Black Enterprise might be a good place to start.

Race, Responsibility and the Welfare State

by Vic Nicholls

What is the justification for taxing people to provide healthcare? There is no mandate for it in the Constitution. The “general welfare” was never considered to include health care. The campaign slogans of the Founding Fathers never included, “Free leech treatments for all!”

Are all men “created equal”? No. Everyone has different talents. I can’t get on a football or basketball team. They can’t do what I do in Information Technology. Is it the job or responsibility of the United States government to make me equal to them or them equal to me? No. Are we equal in the sight of God? Yes.

Should people who sacrificed to made the personal choices to earn college degrees and delay having children until they were married be penalized for making those choices by forcing them to pay for others who didn’t? Would you expect to pay higher insurance because your neighbors’ kid wrecked two of his parents cars? Is it fair to discriminate against those with bad driving records? Should the government require equal insurance premiums for everyone?

If we institute Medicare/Medicaid for all, where would personal responsibility start and end? If there is a shortage of doctors, how do we determine who gets one and who doesn’t? Since we were given the right to “life, liberty and the pursuit of happiness,” how does freedom from the tyrant’s power to tax me to fund his armies and empire translate into the power of my fellow countrymen to tax me to provide them 21st-century medical care?

Nowadays, appeals to personal responsibility and initiative are described as justifications for white privilege. If you earned a B.A. degree, got a job in your field, married, and then had kids, would you expect your children to have a better start in life than one who’s parents didn’t? Of course! Does that make you “privileged”? Not at all.

Notice that in listing the essential requirements for success in life, I didn’t mention race. That’s because I know non-white spouses who followed the formula and live as well as I do.

Many assume that all differences between the races are due to racism. But once you factor out marriage, education, in-wedlock birth, age (whites are older on average than blacks and Hispanics and have had more time to climb the income scale), and inheritance from parents who made the same responsible choices, what difference is there left?

If it’s racism that keeps people down rather than hard work and grit that allow people to rise, how do we explain the career of the noted African-American economist Dr. Walter Williams? He grew up in the projects with his mother and sister, but no father. He earned a Ph.D. in 1972, and has been teaching at George Mason University since 1980, and he publishes a nationally syndicated column. Racism was worse back then than it is now. How do we explain his success?

Explain Mae Jemison. She was born in Alabama in 1956. Her mother was an elementary English/math school teacher and her father was a maintenance supervisor. Her family moved to Chicago to give her better educational opportunities. She graduated high school in 1973 and went to Stanford at age 16, graduating 4 years later with a B.S. in chemical engineering and B.A. in African/Afro-American studies. Engineering professors would pretend she wasn’t there. Her family was always encouraging, though. She got her M.D. in 1981 at Cornell.

Explain Dr. Ben Carson, Dr. Charles Drew, or countless others less famous. Explain my African-American next-door neighbors, both of whose kids have masters’ degrees. I can explain their success: My neighbors married before the kids were born and have lived in the same house since the ’80’s. They sacrificed a ton to make sure their kids got a solid start in life. 

It’s time we asked a different question: When government takes away from those who worked for their success and gives it to those who didn’t, does it subsidize failure? When government subsidizes failure, do we get more of it?

Vic Nicholls lives in Chesapeake. For more on the topic, she recommends viewing Walter Williams’ speech, “How much can discrimination explain?” on the video above.

The Crisis in African-American Student Indebtedness

The student loan default crisis is bad… and getting worse, finds Judith Scott-Clayton, a Brookings Institution scholar, based on her analysis of the latest student loan data released by the U.S. Department of Education.

Debt and default has reached “crisis” levels among African-Americans, and even a bachelor’s degree is no guarantee of security. Black B.A. graduates default at five times the rate of white B.A. graduates (21 versus 4 percent). Black graduates are even more likely to default than white dropouts.

Trends are most alarming among for-profit colleges, says the report, “The looming student loan crisis is worse than we thought.” The results, Scott-Clayton argues, justify robust efforts to regulate the for-profit sector, improve degree attainment, and promote income-contingent loan repayment options.

Remarkably, the conclusion that I find most obvious eludes Scott-Clayton: Student loans are handed out so indiscriminately, in such disregard to a student’s academic potential or prospects of repayment, that a program designed to promote social mobility for the poor and minorities has exploded like a Loonie Toons cigar. Student loans have become a instrument of immiseration for the very people they were designed to assist.

While the author’s public policy musings are debatable, her presentation of the data is useful. Rather than looking at the entire body of student borrowers, she tracks the fate of different student “entry cohorts” — those who entered postsecondary school in 1996 and and 2004 — and tracked them 12 years and 20 years after entry.

In this chart, we can see what happened to people who entered college in 2004 twelve years later. Despite significant financial assistance for lower-income students available at every four-year college and university, African-Americans racked up more than $21,000 in undergraduate debt on average. Total amount borrowed, which includes graduate school debt, was nearly $56,000. In contrast to other racial/ethnic groups, which managed to pay down some of the debt twelve years after entering college, African-Americans saw average debt loads increase — to $64,000. More than one in five blacks were in default, compared to one in twenty-five whites.

It fascinates me how social scientists such as Scott-Clayton obsess over the black-white differential. As the data clearly shows, Asians have the lowest default rate of any racial/ethnic group. Why aren’t Asians the standard for comparison? Why isn’t the disparity described as an Asian-black disparity and an Asian-white disparity? Because, I suspect, emphasizing the gap between whites and blacks reinforces the “white privilege” narrative, while framing the gap as between Asians and other groups would undermine the narrative. “Asian privilege” just doesn’t have the same ring to it.

One thing seems undeniable, though: There is a student loan crisis among African-Americans. Scott-Clayton does her best to explain this crisis as the fault of for-profit institutions, which, in a narrow sense it is. But her analysis ignores a couple of things. First, there is considerable variability between for-profit institutions. Some are fly-by-night, others do a pretty good job of graduating their students and placing them in jobs. Second, there is considerable variability among non-profit colleges. Historically black colleges and universities have student loan profiles comparable to that of many for-profits.

The real problem runs much deeper. There is a widespread belief in America that everyone has a right to attend college and that the federal government should help make that education accessible by means of student loans. Moreover, there is an assumption that student lending programs should not “discriminate” against students on the basis of academic preparation, family financial resources, or other factors predicting the applicant’s likelihood of graduating and repaying their loans the grounds that blacks and minorities would be negatively impacted.

As these beliefs and assumptions play out in the real world, millions of African-Americans are winding up in financial peonage. As blacks accumulate loans that cannot be discharged, they ruin their credit scores, impair their net worth, ramp up their debt-to-asset ratios, and, as we have seen in a recent post (“Racism, Racism, Everywhere You Look,”), find that their home mortgage loans are rejected at a higher rate than whites.

But some people are incapable of peering past the paradigm of omnipresent racism. So scholars like Scott-Clayton try to frame the issue as for-profit colleges, and investigative reporters compile data purporting to show discrimination in mortgage lending without accounting for credit scores and debt-to-asset ratios. Thus, apologists for the status quo perpetuate policies that entrap African-Americans in poverty.

Poor Choices and Food Insecurity

Sparkpeople, a publisher of health, fitness and food information, created the graphic shown above to demonstrate that eating healthy food need not be more expensive than eating junk food. Sparkpeople blogger Stepfanie Romine recently wrote that she hears the excuses every day — “I can’t afford to buy healthy food,” “fruits and vegetables are too expensive,” “it’s cheaper to eat fast food.” But she doesn’t buy it. “We think you’ll be shocked at how far you can stretch a buck at the supermarket when you buy healthy foods!”

Stepfanie sparked — or perhaps I should use the word “triggered” — a reaction from Jef Rouner in the Houston Press. While he didn’t dispute the idea that healthy food can cost less than junk food, he didn’t like the moralizing tone. The headline of his piece says it all: “Please Stop Telling Poor People to ‘Just Cook’ to Save Money.”

People need pots, pans, knives, cutting boards, aluminum foil, cooking spray, and an assortment of spices, Rouner reasons. Then there is the issue of time.

You know why people go through KFC? Because, in terms of total resources it is the most efficient family meal you can provide in a 20-minute timespan. I have three fried chicken recipes. Most of them require at least an hour or more including store and prep time. Time is, well, not money, exactly, but it is something that is precious and in short supply when you’re coming home at 6 p.m. on a Tuesday.

Rouner’s piece in turn inspired a retort from the Monster Hunter Nation blog:

Apparently, to cut a tomato in half requires a knife forged by a samurai blade smith, using ore taken from a meteor.

In reality, as a guy who likes to cook, who is married to a woman who actually made her living as a cook, 95% of the time we use the same eight inch knife that we’ve had for the last twenty years. We got it cheap.

Apparently Jef’s hypothetical really stupid poor people have no friends or relatives. My wife is still using a cooking pan that she got from her grandma. It was made in the 70s, and it’s still her favorite pan.

Jef’s hypothetical poor people also live in the only poor neighborhood in America that doesn’t have a thrift store.

If you enjoy biting sarcasm, the response is worth reading.

Given the abundance of food stamps, food pantries, school lunches, and the like, how is it possible that there is hunger and malnutrition in Virginia? To what extent are poor people responsible for their own condition? If you’re eight years old and your mom is an addict who swaps her food stamps for meth, no fair-minded person is going to hold you accountable for going hungry. But, to pick up on a talk show topic I heard recently, what about using food stamps to buy food for your dog? Or what about using food stamps to buy sugary sodas and potato chips? You can’t use food stamps to buy a Big Mac — you pay cash for that. But how many people on food stamps also dine out at McDonalds? How much money are they wasting?

I don’t know any poor people well enough to comment upon their eating habits. I suspect the same is true of those in the do-gooder camp. Both sides rely on stereotypes. I saw someone using food stamps to buy filet and lobster! I know of a family that ran out of food-stamp money halfway through the month and subsisted on Kibbles n Bits! One thing we do know, based on studies tracking actual grocery-store purchases, is that food stamp recipients do spend a big chunk of their monthly allowance on junk food. I side with Stepfanie on this issue. Society must stop making excuses for people who make poor choices.

Supply-Side Experiment in Food Desert Goes Bust

Jim Scanlon at his Newport News store. Photo credit: Richmond Times-Dispatch

Poor Jim Scanlon. He bought into the conventional wisdom that food deserts are a supply-side problem — an unwillingness of grocery store operators to locate in inner cities. Hoping to remedy that deficiency, the idealistic former Ukrop’s executive opened Jim’s Local Market in a low-income neighborhood in Newport News in May 2016.

Now, a year and a half later, he’s closing the store, reports the Richmond Times-Dispatch. Explains Scanlon: “It’s just that the sales are not there, and the profitability is not there. It’s not working out.”

Bacon’s bottom line: Food deserts are a demand-side problem, not a supply-side problem. Poor people, like many Americans, just don’t like broccoli, kale, quinoa, cauliflower, or other trendy superfoods that go in and out of fashion among the cultural elites. Pleasures in life in the inner city are far and few between, and the poor, also like many Americans, gravitate to food that provides immediate gratification… Which means they gravitate to processed food loaded with salt, sugar and fat that tastes good. Go into any convenience store or corner grocery in the east end of Richmond and you’ll see aisles stocked with snack foods and soft drinks — the kind of food people are willing to spend their money on.

If you want poor people to eat healthier food, putting healthy food in front of them won’t work. You can literally give away the carrots and squash, and many people won’t eat them. Not only have they not acquired the taste, they have lost the cultural knowledge of how to cook them.

Tricycle Gardens in Richmond was launched to create urban gardens and create a supply of healthy vegetables that poor, inner-city residents should include in their diets. The idea behind the nonprofit was the old give-a-man-a-fish-and-you-feed-him-for-a-day, teach-a-man-to-fish-and-you-feed-him-for-a-lifetime philosophy. The group built small, “key-hole” gardens that anyone could install in their backyard and reap a bounty of vegetables. I don’t know if Tricycle Gardens had many takers, but let’s just say, I have seen little evidence of a horticultural revolution sweeping through Richmond’s inner city. The last time I communicated with the group — it’s been a couple of years — its leaders were recognizing that they had to work on the demand side. The outfit was talking about giving cooking classes to teach how to make yummy dishes out of brussel sprouts, and it was partnering with local schools to get kids involved with raising garden vegetables, learning about nutrition, and excited about eating healthy food. If we want poor Virginians to eat more healthy food, that’s the kind of slow, plodding change we need to undertake.

Another well-meaning group is investing a grocery store in Richmond’s East End. The building is now under construction. With all the gentrification taking place in the East End, that venture may find enough customers among young urban professionals to sustain itself. Otherwise, it will likely meet the same fate as Scanlon’s Newport News enterprise. Simply put: The enterprise is addressing the wrong problem.

This Is Us. Ugh.

by Chris Saxman

During Monday’s Senate Commerce and Labor Committee, three bills were on the agenda attempting to raise the minimum wage. Virginia’s policy has been at least since the late 1990s to mirror the federal minimum wage which stands at $7.25 an hour. That rate became effective in July of 2009.

Watching the committee hearing via video streaming, I was struck by the political exchange. Trust me, this is not a criticism of any committee member or bill patron or even those who came to testify on the issue. It’s just where we are as a nation.

Like the title of the popular series on ABC: “This Is Us.

Full disclosure – I personally oppose a minimum wage. It is not the role of government to set the cost of labor or any other business costs. Federal Reserve Bank notwithstanding. Having run a business with my family in which we had some employees at an hourly rate and having been an employee paid the minimum wage, I think a federal minimum wage sets a false floor for fair, market based compensation for labor. For hourly workers, the minimum wage is the starting point for the negotiations rather than the true value of labor in the market. But that’s just me.

There were three bills submitted by Senators Rosalyn Dance (SB251), David Marsden (SB240), and John Edwards (58) on the agenda. During the discussion, Chairman Senator Frank Wagner pointed out that the committee last year defeated minimum wage increase legislation and that the committee composition was roughly the same, indicating a similar fate for the legislation.

This was a legislative courtesy to suggest that something needed to have changed in these bills from last year’s bills if a different result was to be possible. In short, “We haven’t changed much, have you?”

The bills from Marsden and Dance were “rolled into” Senator Edwards’ bill (HB58), which meant they were set to hear testimony and debate on that legislation seeking to raise the minimum wage to $8 in July this year, $9 in 2019, and $10.10 in 2020.

Seems pretty functional at this point, right? Here’s the “Us” — the text of the bill was NOT discussed. There was no mention of why those wage levels were offered and what impact it would be on either employers or employees. Instead, what happened was that a series of speakers for an increase just said, in essence, “We need more money,” “We can’t subsist on $7.25 an hour.”

(Senators would likely agree since, based on a forty hour work week, they only make $8.65. House members only get $8.48.)

Then came the opponents from the business community who opposed the legislation largely because they always have due to the fact that it hurts small business, which has smaller margins from which to negotiate labor costs.

It was like those scenes from Casablanca where Captain Renault rounds up “the usual suspects” and then to impress his German counterparts, he rounds up “TWICE the number of usual suspects.”

Back to Commerce and Labor…

During the meeting, all of the Democratic members of the committee spoke in favor of increasing the minimum wage but never discussed the actual bill that scaled up the wage from $8 to $9 to $10.10 an hour. Why $10.10?

Senator Dick Saslaw, D-Fairfax, asked some pointed questions of one lobbyist who represents several Northern Virginia chambers of commerce. Since the $7.25 an hour in Northern Virginia is very different than $7.25 in Wise or Matthews Counties, Saslaw asked, “Is raising the minimum wage anti-business? I have spoken to several of your members and they don’t oppose raising it.” Again, not to the text of the bill with possible economic implications but rather a political question based on some are and some are not. Saslaw is a very pro-business legislator and has been so for his entire career, but he was direct. There is direct and then there is Saslaw Direct. This was the latter not the former.

Senator Dance, whose bill offered a $10 to $13 to $15 in 2020 scale, again without economic impact, asked if there was something, anything, that could be done to help those making minimum wage.

Shortly thereafter SB58 was voted on achieving the same results as last year – 11-3 to Pass By Indefinitely or PBI for short. Defeated.

Had an amendment even been offered to adjust the 2009 rate of $7.25 to inflation ($8.34 in 2018 dollars) and peg the rate forevermore to CPI or COLA adjustments, that would seem more reasonable right? Well, until it got to the floor and then we’re back to square one – bidding up the bill with amendments to $15 an hour. That’s, again, political calculus rather than economic consideration.

No articles have appeared, to my knowledge, on this issue in either the Richmond Times Dispatch or via the VPAP daily news feed (you should get that by the way – www.vpap.org)

Thankfully, the committee meetings are live streamed so we can watch our legislative process in action or, in this case, inaction.

But didn’t the business community get the outcome it desired? Perhaps.

Yes, a $15 statewide minimum wage would be bad, but was any progress made on the merits – either way – on the best wage policy for the Commonwealth’s economic and business climate?

Not at all.

This is Us.

Chris Saxman is executive director of the Virginia Foundation for Research and Economic Education. This commentary was originally published as an email missive.

When the State Feeds Children, Children Go Hungry

Source: Center on Budget and Policy Priorities

Dorothy McAuliffe

I can’t say anything bad about Virginia’s first lady, Dorothy McAuliffe. Her cause is admirable: ending childhood hunger. Her compassion seems entirely genuine. And it appears that she had been very effective, if effectiveness can be measured by the resources she has mobilized to advance her goals.

Writing in a Richmond Times-Dispatch op-ed today, McAuliffe ticked off a series of accomplishments. Seven hundred Virginia schools now offer Breakfast after the Bell programs than did three years ago. State school breakfast funding has increased by $2.7 million during her husband’s administration. Schools served 10 million more breakfasts and two million more after-school meals and snacks than in 2004, while 37 more school divisions serve summer meals. Meanwhile, Virginia has built the capacity of the nonprofit sector such as food banks to help feed the poor.

But McAuliffe’s op-ed neglects to address a critical question: Has this activity contributed to childhood hunger getting better or worse? What exactly constitutes “hunger” anyway?

Here is what I fear: All these school and nonprofit programs are creating a moral hazard in which poor parents, secure in the knowledge that government and charities will pick up the slack, are spending less money on nutritional food for their children. While McAuliffe’s good intentions are unassailable, her op-ed offers no evidence whatsoever that children are any better off as a result.

As can be seen in the chart above, the Supplemental Nutrition Assistance Program (SNAP), better known as the food stamp program, increases payments based on family size. Maximum payments for the most destitute households — around $140 to $150 per child per month — are spartan. But they should be sufficient if the money is spent carefully. Part of the problem in America today is that food stamps are not spent wisely.

The best documentation comes from a study published in November 2016 by the United States Department of Agriculture, which oversees the food stamp program. That study plumbed a vast reservoir of data assembled by “a leading grocery retailer” and accounted for 80% or so of the money that households spent through their SNAP cards.

Most notoriously, that study found that 9.25% of all expenditures by SNAP households went to “sweetened beverages,” mostly soft drinks. The New York Times used the data in a 2017 article to point out that PepsiCo, Coca-Cola and other food companies had lobbied heavily against efforts to prohibit the use of food stamps to purchase soft drinks and junk food. But the scandal is bigger than soft drinks. Money spent on sweetened beverages, prepared desserts, salty snacks, sugars, candy, juices, jams and jellies accounted for more than 22% of total food stamp expenditures at the grocery store. The actual percentage was likely higher because these numbers did not reflect expenditures, at neighborhood convenience stores where food offerings are heavily tilted toward soft drinks, snacks and other junk food.

Even if we don’t take convenience-store expenditures into account, food stamp recipients spend a higher percentage of their resources on junk food than non-recipients — about 23% compared to 20%. They also spend considerably more on the most expensive food category — meat, poultry and seafood, leaving less for healthy staples.

No wonder kids in poor neighborhoods are 2.7 times more likely to be obese than children from affluent families. The problem is not a lack of calories. The problem is the wrong kind of calories. Which raises the question: what kind of hunger are we talking about? Are poor children hungry because they’re not getting enough to eat — or are they consuming empty calories that temporarily satiate them but leave them feeling hungry later?

“Ending hunger in Virginia requires an ‘all of the above’ set of solutions,” McAuliffe writes. I would agree. But I would suggest that we’re not following an all-of-the-above approach. Schools are providing free breakfasts, free lunches, and afternoon snacks. Nonprofits are sending kids home on weekends with backpacks with food. Nonprofits support food pantries, soup kitchens, and emergency food programs. Charities raise funds to feed families on Thanksgiving and Christmas. The underlying assumption is that poor families lack the money to feed themselves, and that society must intervene to ensure that children are fed. But the ultimate responsibility rests with parents.

The headline of McAuliffe’s op-ed reads “End of childhood hunger is in sight.” She probably did not write that headline. Regardless, I will venture to say that it is dead wrong. Here is a counter-intuitive prediction: The more that well-intentioned government and charities do to end childhood hunger and absolve parents of primary responsibility for feeding their children, the more pervasive hunger will get.

The “Food Desert” Theory Does Not Reflect Reality

Inner-city convenience store responding to what local demand.

A large social-scientific literature has documented that low-income neighborhoods are far more likely than affluent neighborhoods to be “food deserts,” that is to have low access to healthy food. The big question is why. Does the food-desert phenomenon reflect institutional racism, in which corporate grocery-store chains are unwilling to serve neighborhoods dominated by poor minorities? Or does it reflect the fact that poor people just aren’t interested in eating what a patronizing intellectual class deems best for them?

A new study argues that food deserts are primarily a demand-side phenomenon: They exist because poor people have different tastes in food and place less value on nutrition.

“Using a structural demand model, we find that exposing low-income households to the same food availability and prices experienced by high-income households would reduce nutritional inequality by only 9%, while the remaining 91% is driven by differences in demand,” report the authors of, “The Geography of Poverty and Nutrition: Food Deserts and Food Choices Across the United States.”

The authors draw upon a rich combination of datasets, including a 60,000-household panel survey of grocery purchases, a 35,000-store panel of sales data that covers 40% of all grocery purchases nationally, and data on the entry dates and locations of 1,914 new supermarkets from national grocery chains along with data on real establishments in each zip code.

While healthy food costs more per calorie than unhealthy food, the authors write, the difference is attributable almost entirely to the cost of fresh produce. In food categories other than fresh produce, health food is actually about 8% less expensive. Therefore, they conclude, price is not the major obstacle to the eating of healthier food.

Also, the “food desert” effect is exaggerated. “Americans travel a long way for shopping, so even households who live in ‘food deserts’ with no supermarkets get most of their groceries from supermarkets. ” Households that move from food deserts to non-food deserts do not significantly alter their eating patterns.

Therefore, the authors conclude, the strategy of coaxing supermarkets to set up shop in food deserts will have only a nominal effect on household nutrition. The most important variable they identified in influencing the consumption of healthy vs. unhealthy food is the level of education. They suggest that improving public health education would have a more positive impact than worrying about the geographic distribution of grocery stores.

Bacon’s bottom line: Food deserts are one more example of people with good intentions mis-identifying a problem and squandering resources on solutions that don’t work. The food-desert theory appeals to liberals and progressives because it reinforces their conviction that a market failure exists for food, which only government intervention can remedy. Observing that poor people have different tastes in food, I have long inveighed against this idea. For the most part, the free market provides poor people exactly what they want to eat. If you wish for poor people to change their nutrition, you need to change their taste infood. Otherwise you’re just wasting everyone’s time and money.

(Hat tip: John Butcher)

One of Three Virginia Children Unready for Kindergarten

Source: Joint Legislative Audit and Review Commission

Roughly one third of Virginia children lack the social, self-regulation, literacy or math skills needed for kindergarten, finds a study on early childhood development released by the Joint Legislative Audit and Review Commission (JLARC).

(That estimate was derived from a representative sampling from 63 of Virginia’s 132 school systems, so a comprehensive statewide survey might yield a different percentage.)

Factors such as poverty, low birth weight, and maternal substance abuse place childrens’ early development at risk and strongly influence whether they will be ready for school. The scientific research is clear, says the JLARC report:

Very young children who grow up in — or are regularly exposed to — safe, language-rich, and healthy environments, with caregivers who support their curiosity and learning, are likely to enter school ready to learn. Conversely, children not exposed to such environments are less likely to be ready for school and are more likely to be held back, enrolled in special education classes, and perform poorly in later grades. Those same students are more likely than their peers to commit crimes, become teen parents, and rely on public assistance as they grow older. … Each of these outcomes can carry significant financial costs to government, including the state.

Virginia has 13 “core” early childhood development programs, including seven voluntary home visiting programs for expectant mothers, the Virginia Pre-School Initiative, the Child Care Subsidy Program, and two Individuals with Disabilities Education Act programs. The state spent $144 million on early childhood development programs in FY 2016; total federal, state and local spending amounted to $359 million.

An opportunity exists to improve the effectiveness of the state’s spending commitment without spending more money, JLARC concluded. “Careful attention is needed to whether programs are well designed, implemented as designed , and perform effectively.” But there is insufficient data to evaluate which programs are delivering the most bang for the buck. 

Bacon’s bottom line: By all means, we should evaluate the efficacy of Virginia’s early childhood development programs and reallocate resources to programs that deliver the most value. But such fine-tuning of the existing system amounts to rearranging the deck chairs on the Titanic when one out of three Virginia children is unready for kindergarten. Virginia appears to be experiencing what can only be interpreted as a slow-motion societal collapse.

Lagging childhood development is strongly correlated with poverty and other phenomena such as low birth weight and maternal substance abuse that are also strongly correlated with poverty. The percentage of Virginia’s population in poverty at present runs about 11%. Yet one-third (subject to revision if we could obtain statewide data) of children are unready for kindergarten. Why the three-to-one disparity? A big portion of the problem, I submit, is demographic: Mothers in poverty have more children than middle-class mothers do, and they have children at much younger ages.

At 64 years of age, I’m about to become a grandfather for the first time. My eldest daughter, whose baby is due in literally one or two days, is 32 years old. Like her 30-year-old sister, who wants to have children but is waiting until her family’s career and finances are in order, and like the vast majority of middle-class Americans, she waited until she completed her education, found a job, got married, saved money, and achieved financial stability. Poor people don’t hew to the same family planning logic. Although the number of teen pregnancies is declining, poor women tend to give birth at a much younger age than their middle-class peers do, and they tend not to be married. (This proclivity, by the way, applies to all races and ethnicities.)

Given the strong correlation between poverty and low literacy levels, substance abuse, single-parent households, child neglect and a host of other pathologies, it should come as a surprise to no one that the percentage of Virginia’s young children ill equipped for kindergarten is increasing. And it should surprise no one that the percentage of teenagers ill equipped to graduate from high school is increasing, and that the percentage of young adults ill equipped for college is increasing. The same problem is manifesting itself on every step of the educational ladder.

Yes, we need to treat the symptoms of this systemic problem by, among other things, helping prepare young children for kindergarten. But the same pathologies that hinder readiness for kindergarten also hinder progression to 1st grade and beyond. In the long run, the most important thing we can do is to persuade teenagers and young women that they can improve their lives by adopting bourgeois values — deferring gratification, staying sober and delaying child bearing until they have completed their education, formed a stable marriage, and found a stable job.