We must rein in violent crime to help those who need economic opportunity

by Joshua Crawford | Oct 11, 2022

We must rein in violent crime to help those who need economic opportunity

Originally appeared in the Chicago Sun-Times

Key Points

The rise in crime rates and the following fear around such crimes is impacting the stability of many communities.
Studies have repeatedly found that increases in violent crime reduce economic mobility and hamper private sector job growth.
A city can substantially reduce crime by focusing law enforcement, corrections and social service resources on a relatively small number of people.

The rise and fear of crime

Americans are more worried about crime than they have been in decades. A recent poll found that 8 in every 10 Americans say they worry about crime either “a great deal” (53%) or “a fair amount” (27%).

This fear is driving businesses large and small out of cities and neighborhoods with rising crime rates. By abandoning these high-risk locations, these businesses take with them any job opportunities they provide to poorer residents.

Local and state governments must focus on reducing violent crime, not just as necessary to protect human life but also because doing so is a prerequisite to real economic opportunity in poor communities.

Increased concern about crime has followed a sharp increase in violent crime, especially homicides over the last six years. In 2021, 12 major cities saw their deadliest year on record. Chicago had its deadliest year in a quarter century.

In recent comments to the Economic Club of Chicago, McDonald’s President and CEO Chris Kempczinski noted that out-of-control violent crime, homelessness and drug overdoses in Chicago were negatively impacting both McDonalds’ restaurant locations and corporate recruitment to the city. He’s committed to staying in Chicago, but other companies across the country are already closing down retail locations in areas experiencing surges in crime.

Kevin had just climbed out of the prison system only to be faced with another challenge…finding work and seizing opportunity. Kevin’s inspirational drive to overcome his situation and to pursue opportunity reminds us of the need for systems that expand opportunity to all.

Impact on Business

Starbucks announced it would close 16 locations in Portland, Seattle, Los Angeles, Philadelphia and Washington, D.C., over safety concerns. Walgreens is closing five stores in San Francisco due to rampant crime. Small businesses from Seattle to Minnesota are citing crime as the reason they’re closing their doors.

While large businesses may not be the most sympathetic victims of the nation’s dramatic increase in violent crime, the people this crime hurts the most continue to be those from the most socially isolated and economically disadvantaged communities.

Studies have repeatedly found that increases in violent crime reduce economic mobility and hamper private sector job growth. One study found that changes in the rates of violent crime substantially impacted the economic mobility of children raised in low-income families. As crime went up during childhood and adolescence, their level of economic mobility went down.

Another study found that increases in violent crime cause existing businesses to downsize and discourage new businesses from entering the marketplace. No amount of economic incentives the government can provide will entice businesses to open in dangerous areas with low-recruitment potential. As a result, increasing crime will reduce the economic opportunities for lower-income residents.

A solution exists

Thankfully, while the problem of violent crime is large, it is not insurmountable. But reversing these trends will require understanding how we got here and what works to reduce crime.

Don’t expect crime to abate with the pandemic. Those who yearn for “pre-pandemic” crime rates ignore that in many cities, these increases began in 2015 when American cities had a more than 10% increase in murder over 2014, and 2016 saw another 8% increase on top of that. Gangs continued to operate unabated during government-ordered lockdowns, and given the retaliatory nature of so much street violence, increased violent crime often begets increased violent crime.

Next, crime, especially serious and violent crime, is concentrated among a very small number of gang members in any given city. Typically, about 0.6% of a city’s population is involved with these kinds of groups, while they’re responsible for 50% of a city’s homicides. It also tends to concentrate around certain areas; about 3% to 5% of specific addresses are responsible for about 50% of a city’s crime.

This means a city — even one plagued by gang violence like Chicago — can substantially reduce crime by focusing law enforcement, corrections and social service resources on a relatively small number of people. Strategies that do so have substantially reduced homicides from Boston, Massachusetts, to Stockton, California.

Failure to do so will only make our poorest neighborhoods poorer. Large and wealthy corporations like Citadel can leave for greener and safer pastures with relative ease. But failure of local and state officials to rein in violent crime will leave those with no means to leave with fewer opportunities to improve their lives.

GCO welcomes Josh Crawford as senior fellow focused on criminal justice reform

by David Bass | Oct 6, 2022

GCO welcomes Josh Crawford as senior fellow focused on criminal justice reform

The Georgia Center for Opportunity (GCO) is excited to announce a new addition to our team! Josh Crawford joins us as senior fellow focused on criminal justice reform.

GCO has long understood the impact the criminal justice system has had on those experiencing the barriers keeping them in poverty. Josh will fill a crucial role in helping add expertise and focus to address these issues.

Josh is a native of Massachusetts. He went to Penn State for his undergraduate degree and then finished law school in Boston. After a brief stint in Sacramento, California, working in the county district attorney’s office, Josh moved to Kentucky to help start the Pegasus Institute, a nonpartisan organization designed to promote opportunity. In addition to serving as executive director of the organization, Josh had a special focus on criminal justice policy.

Josh first encountered GCO during the 2021 State Policy Network annual meeting in Florida. He was impressed with GCO’s work on welfare cliffs and by the principles the organization lives by.

“GCO’s focus on opportunity and upward mobility for the most left-behind members of our communities very much aligns with my own passions,” Josh says. “Additionally, it became clear to me that GCO understands the holistic nature of prosperity and a life well-lived. Prosperity is too-often discussed in merely economic terms. But true prosperity comes from not only financial security but community, family, and the ability to help one’s children lead better and more prosperous lives than the generation before them.”

One of the top policy issues that motivates Josh is public safety: “The freedom to walk to the corner grocery store after dark or to let your kids play outside without fear of victimization is not a universal experience in American cities. In the absence of the most basic assumptions of personal safety, it becomes very hard to encourage economic growth or upward mobility. In fact, multiple studies have found that increases in violent crime depress private sector job growth and opportunity.”

Josh’s role at GCO will focus on criminal justice reforms and the pathways for ex-offenders transitioning out of prison to attach to work to lower their risk of recidivism.

“Reversing the trend of increased violence in American cities will require a combination of policy seriousness and political courage. It is my hope to bring the existing work I’m doing to GCO and expand upon it,” Josh added. “This means focusing attention on everything from policing and sentencing to the physical environment of a city and re-entry policy. The first city and state that gets these policy areas right will see not only huge public safety gains but will become the 21stt century model. Together we can make that a reality.”

Inflation is still raging. Biden’s student loan forgiveness plan will only make it worse

by Erik Randolph | Oct 5, 2022

Inflation is still raging. Biden’s student loan forgiveness plan will only make it worse

Key Points

Year-over-year inflation rate remains high at 8.3%. While the latest monthly number, and the CPI reading from July, show that inflation has stalled, we’re not out of the woods yet.
Reducing fiscal revenue by suspending the loan repayments adds to federal fiscal deficits.
Labor market moral hazards will worsen the situation of students achieving meaningful education and solving the problem of their skills not matching what is needed in the labor market.

In September, the U.S. Bureau of Labor Statistics announced that the Consumer Price Index (CPI) rose 0.1% in August. However, the year-over-year inflation rate remains high at 8.3%. While the latest monthly number, and the CPI reading from July, show that inflation has stalled, we’re not out of the woods yet.

There are warning signals, including worldwide drought and continued energy disruptions, that inflation is not yet tamed. Moreover, Federal Reserve policy is refusing to allow the price level to come back down, meaning that most households will continue to contend with higher prices and lagging income growth.

Meanwhile, the administration in Washington is taking steps that will only worsen the inflationary environment by its fiscal policy that relies on overspending absent adequate revenue. An unexpected part of this is President Biden’s new plan to forgive up to $20,000 in student loans for households making up to $250,000 a year.

We’ve already written about how this policy will end up hurting the poor and working class. But from a strictly economic perspective, the blanket student loan forgiveness action by the president raises two additional fundamental concerns.

Deficit spending

Reducing fiscal revenue by suspending the loan repayments adds to federal fiscal deficits. Currently, the federal government is not running surpluses with a manageable national debt as if the federal government is in a financial position to be generous. The government itself is in a financial straitjacket where it must continue to borrow to pay for its expenses, and the interest payments on the national debt continues to grow not just from the additional borrowing but also from rising interest rates. Like a family with a large and growing minimum payment on credit card debt, it is crowding out other budget priorities.

Although no economist knows how much more debt the U.S. economy can withstand, there is widespread agreement among them across the political spectrum that worsening deficit spending only aggravates inflationary pressures. We may say that taxpayers will eventually pay for the loan forgiveness, but the reality may be that we will pay for it sooner with higher inflation.

Paying through inflation rather than taxes is regressive, impacting lower income Americans the most. Consider the Tax Policy Center estimate that 57% of households paid no federal income taxes in 2021 with many receiving a net gain instead. The Tax Policy Center expects that the percent of non-paying households will drop to about 40% over the next few years, consistent with pre-pandemic levels. Why is this important? Because it shows how an inflationary policy, instead of a fiscally sound policy, impacts low-income Americans worse.

Labor market moral hazards

Second, it presents moral hazards that will worsen the situation of students achieving meaningful education and solving the problem of their skills not matching what is needed in the labor market.

The moral hazards will come about because given the history of entitlements in this country, once we begin on the path of creating a new entitlement, it opens the door for expanding that entitlement. Are not other students just as deserving of having their debt paid for now and in the future? And what about the past? Why not raise the thresholds so even more debt can be forgiven? What we’re creating here is an entitlement that has moral hazards. Even the expectation of future loan forgiveness will cause behavioral changes with the same moral hazards.

The first hazard is with the students themselves. Choosing a career and what to study is a major life decision where one must weigh the benefits and costs. Already we have a problem with many students making bad decisions and studying things that will not help them develop the skills they need in finding good paying jobs. Installing a system where the cost of education is now paid for with other people’s money will give them yet another reason to rationalize their poor education decisions. While the debt of that education may be forgiven, the opportunity costs will be unforgiving because you can’t turn back the clock and erase the consequences of those bad decisions.
The second hazard is with the post-secondary educational establishments themselves. Government involvement with guaranteed student loans already exacerbates the outrageous tuition price hikes we’ve witnessed over the past 50 years. Having the government now forgiving student debt will only reduce the financial incentives for higher education to rein in its exorbitant costs.
Finally, where are the incentives for institutions of higher learning to adjust their content to match the needs of society and the economy? As the incentives are eroding for students to carefully choose what to study and for the educational institutions to rein in their costs, the arrangement provides yet another reason for academia to justify the assortment of degrees they offer and the courses they teach. Already we are witnessing a disconnect between the content of what students have studied with what they will need to be successful in their careers.These students typically learn this hard lesson once they graduate and are faced with the realities of life. This flaw in the education system is a contributing cause of the great mismatch between what skills and education people have and the skills needed by employers that fuels the economy. Our economy is currently suffering from this problem, which now will only grow worse.

Stress cracks in the labor market

by David Bass | Sep 26, 2022

Stress cracks in the labor market

Key Points

There are more jobs available in America than ever before.
There are more people NOT working in America than ever before.
At Georgia Center for Opportunity, we have created a two-step process to create meaningful, self-supportive work.

“Never has work been so readily available in modern America; never have so many been uninterested in taking it.”

That’s a key point made by social scientist Nicholas Eberstadt in a new column for The Wall Street Journal. Eberstadt points out that even in an environment with historically low unemployment, the truth is that millions of workers are missing from the labor force.

“We now face an unprecedented peacetime labor shortage, with employers practically begging for workers, while vast numbers of grown men and women sit on the sidelines of the economy—even though job applicants have more bargaining power in the ‘Great Resignation’ than at any time in recent history,” he writes.

Eberstadt points to the unprecedented federal government response to the pandemic as a key driver of the current quandary: stimulus payments, expanded child tax credits, and heightened unemployment benefits, to name a few.

The problems were evident before the pandemic but became worse after. “The current manpower shortage highlights the new face of the flight from work in modern America,” Eberstadt writes. “With pre-Covid rates of workforce participation, almost three million more men and women would be in our labor force today. Prime-age men account for only a small share of this shortfall: Half or more of the gap is owing to men and women 55 and older no longer working.”

Eberstadt has also written quite a bit on how people are spending their time as non-workers:

“Men 55 to 64 who were neither working nor looking for work … were kings of the screen, clocking in a self-reported 2,400 hours during 2020—possibly a new record in the inactivity olympics and nearly 300 hours more than a typical fulltime job requires in year. Prime-age women who are both work-free and child-free exhibit similar traits—especially those neither employed nor in education or training (called NEETs by economists). In 2020 they reportedly devoted even less time to household chores, taking care of other household members or getting out of the house than prime male labor-force dropouts—and allocated almost 11.5 hours a day to “personal time” (mainly sleep), more than any other group.”

“Men 55 to 64 who were neither working nor looking for work … were kings of the screen, clocking in a self-reported 2,400 hours during 2020.”

So, what’s the bottom-line conclusion of all of this? Here at the Georgia Center for Opportunity, we are striving to create a culture that values work and helps all people — particularly disadvantaged populations — find meaningful, self-supporting work. There is a two-step process here:

Policy solutions

A big problem standing in the way is a failing welfare system, one that traps people instead of serving them. Even if well-intentioned, the existing collection of complex and inefficient welfare programs is vast, disconnected, and dehumanizing. Tragically, it deprives people of the hope and dignity that comes with steady work and the government’s response to the pandemic only made these problems worse. That is why GCO advocates for welfare reform that streamlines and simplifies the safety net, while doing away with benefit cliffs that punish people for earning more and climbing the economic ladder.

Community solutions

The solutions don’t stop at policy reform, however. We also need on-the-ground help. That’s what GCO’s BETTER WORK program is all about. Now operating in Gwinnett County and Columbus — but soon spreading to other areas of the state — BETTER WORK is about collaboration between key stakeholders in our communities to help people find work.

The mission of BETTER WORK has never been more important than it is today. As we continue to emerge from the economic fallout of the COVID-19 pandemic, the labor market will keep shifting in significant ways. No matter what that looks like, BETTER WORK’s approach and mission will play an important role.

Georgia Center for Opportunity is the winner of the Bob Williams Award for Outstanding Policy Achievement

by Georgia Center for Opportunity | Sep 23, 2022

Georgia Center for Opportunity is the winner of the Bob Williams Award for Outstanding Policy Achievement

Georgia Center for Opportunity is the winner of the Bob Williams Award for Outstanding Policy Achievement. Erik Randolph, Director of Research, lead the charge in undertaking a massive research project which highlights the harms of COVID restrictions which took place around the country. The award specifically recognizes those doing “exceptional work to create and disseminate credible policy research and ideas.”

Georgia Center for Opportunity has been one of the host organizations for the State Policy Network’s Annual Meeting which is being held this week in Atlanta, GA. This is a gathering of organizations working on a state-level to promote realistic solutions to policy. It’s also a time for our team to collaborate with like-minded people and be inspired by new ideas and tactics.

“Bob Williams Awards for Outstanding Policy Achievement recognize state think tanks doing exceptional work to help states implement solutions that expand personal freedom and opportunity for all Americans.”

“Bob Williams Awards for Outstanding Policy Achievement recognize state think tanks doing exceptional work to help states implement solutions that expand personal freedom and opportunity for all Americans.”

Randy Hicks is the winner of the Thomas A. Roe Award

by Georgia Center for Opportunity | Sep 23, 2022

Randy Hicks is the winner of the Thomas A. Roe Award

We are excited to announce Randy Hicks is the winner of the Thomas A. Roe Award given by the State Policy Network.

The award was created 30 years ago to pay tribute to leaders who embody innovation, conviction, courage, and solutions in public policy and whose achievements have advanced free-market philosophy. The award was named for the State Policy Network’s founder, who spent much of his life encouraging states to grow organizations who preserve American liberties.

Georgia Center for Opportunity has been one of the host organizations for the State Policy Network’s Annual Meeting which is being held this week in Atlanta, GA. This is a gathering of organizations working on a state-level to promote realistic solutions to policy. It’s also a time for our team to collaborate with like-minded people and be inspired by new ideas and tactics.

Randy Hicks is the winner of the Thomas A. Roe Award!

Randy Hicks is the winner of the Thomas A. Roe Award.