Posted on January 31, 2014 · Posted in Frank Friday, P-cubed News, Roosevelt House Faculty Forum

A new year has arrived, and with it a renewed commitment for change from President Obama to improve the lives of millions of Americans. The President’s State of the Union address earlier this week focused on the growing inequality in America and solutions to mitigate the wealth gap by creating more livable wage jobs, raising the minimum wage, supporting gender pay equity, and offering affordable and quality education from pre-K through college. These commitments are important for several reasons, chief among them being charting an intentional strategy to invest in the human capital of the country in order to grow a vibrant, sustainable workforce of the 21st century that works for everyone.

Although the December 2013 unemployment rate fell to 6.7 percent – the lowest since October 2009 – only the wealthiest Americans are feeling the benefits of a stronger economy. A new Oxfam report shows that in the U.S., “the wealthiest one percent captured 95 percent of post-financial crisis growth between 2009 and 2012, while the bottom 90 percent became poorer.” Thus, the unemployment rate is deceptive. The reality is that America’s poverty rate stubbornly remains at 15 percent; almost one in four American children live in poverty and 32 percent of children in this country have parents who lack secure employment. Despite this increasingly-widening gap, Congress recently passed $5 billion in cuts in food stamps that affect 48 million Americans, in addition to a proposal for an additional $40 billion in cuts over the next 10 years. A few weeks ago, unemployment insurance for 1.6 million unemployed workers was terminated.

President Obama also promised to grow jobs in the high-tech manufacturing sector with the creation of at least six hubs that connect businesses to research universities to generate advanced technologies that will make the U.S. more competitive in the global market. He also singled out the need for infrastructure improvements – highways, ports, and transportation – to act as a vehicle to attract construction jobs, a sector that fell by almost 20 percent during the recent recession. Small business owners, who represented 98 percent of the country’s exporters in 2011, are the engines for most new jobs, and they will require loans and other financial incentives to survive.

Immigration reform has important implications for boosting the economy by increasing the number of workers by over 4 percent and generating new housing construction of $68 billion per year. In his State of the Union speech, President Obama pointed to data which showed that the presence of new and younger workers would help reduce deficits by almost $1 trillion in the next 20 years.

Of course, raising the minimum wage to at least $10 is essential to any discussion on job creation and creating economic security for millions of American workers. The current federal minimum wage is $7.25 an hour for most workers; for tipped workers it is just $2.13 an hour. This contributes to cycles of poverty that disproportionately impact single mothers.  Indeed, half of single mother families have an annual income less than $25,000 and two fifths of single mother families are poor and “food insecure”. These single women and their children experience triple the poverty rate of the rest of the population.

Equal pay for equal work could not be more relevant today as women make up at least half of the workforce and are surpassing men in college graduation rates. Yet, on an average, women are paid only 77 cents for every dollar earned by a white male. The statistics for women of color are even worse — black women make 68 cents to a dollar while Hispanic women make even less at 58 cents to a dollar earned by a white male. Given the rising trend of educated women in the workforce, legislation around pay equity is essential to address this deeply entrenched problem in the workplace. Now is the time to pass the Paycheck Fairness Act – a much needed update of the Equal Pay Act of 1963, which closes loopholes and strengthens incentives to prevent discrimination along gender lines.

Central to the notion of creating a skilled American workforce is access to early and good quality universal pre-Kindergarten programs. Well-cited research shows that for every dollar spent on early childhood education and development programs, $7 are returned to individuals and to society.  Benefits include a higher income and reduced criminal justice expenditures.

In addition, investments in education and strategies to make college more affordable are critical steps to decrease inequality and improve job opportunities for millions of Americans. Currently, the costs of public four-year colleges have increased by over 250 percent over the past three decades. President Obama’s proposal to develop a ratings system so that students can have the information they need to select the school that provides the best value is geared toward decreasing the financial burden of higher education. Other components of his higher education plan include state funding for public colleges based on performance and measures to manage student debt.

Education, skills training, jobs, and decent wages are sensible public policy solutions to address the despair of inequality that too many America faces today. President Obama and responsible lawmakers in Washington certainly understand that, yet partisan politics often stands in the way of important legislation that could make a difference in the lives of Americans who face the consequences of income inequality. It’s a new year; dare we hope for real change?

Dr. Shyama Venkateswar is the Distinguished Lecturer and Director of the Public Policy Program. Follow her on Twitter: @DrSVenkateswar, like the Public Policy Program at Roosevelt House on Facebook and follow @PcubedatRH on Twitter.