Improve Your Life with a Growth Mindset

by Kristin Barker | Jul 20, 2021

Improve Your Life with a Growth Mindset

Learning keeps you growing

Most people agree that learning is important. I’m just not sure we understand how important it really is. I can still remember as a child believing that I needed to know everything or people wouldn’t think I was smart and capable. I hear kids today (and even adults) saying, “You don’t have to tell me. I know that.” Saying this often enough can make it an automatic response to receiving new information.

There seems to be an inherent desire–starting at a very young age–to already have the knowledge we need to understand the world. It can be even more difficult for children to see the value of learning when our educational system (and usually our parents) place the focus on grades as the most important thing they have to achieve. And learning isn’t only important for kids. While it may start when we’re young, it surely doesn’t end there. If we are wise, we will be learning until the end of our lives.

Learning new information will help us grow personally in a way that allows us to better handle life’s challenges we face every day. As we continue learning into adulthood, it can actually improve our memory and help us relate to new information positively. It may even reduce our chances of developing Alzheimer’s or dementia.

Learning can also help us adapt to new situations with less stress and anxiety. If you struggle to see change as good and prefer that things stay the same, this is a skill that will make your daily life more pleasant. It can also increase your value in the workplace because you’ll be able to easily “roll with the punches”. Learning even changes the way you think about the hard stuff. In short, it helps you embrace a growth mindset.

What is a growth mindset? This simply means you believe your abilities can be improved through dedication and hard work, and that your talents can be developed. It’s about more than just taking in feedback, learning from your experience, and coming up with strategies for improving. It’s also about knowing deep down in your gut that even when you fail at something, you will eventually succeed. In fact, it’s the knowledge that failing will only make you more likely to succeed the next time or the time after that! Every time you fail, your success muscle gets stronger.

Embracing this growth mindset will allow you to bounce back quickly from disappointment because you understand that every failure is an opportunity to learn something new and therefore a stepping stone toward your success. This helps us to be more resilient, and resiliency allows us to cope better with the hard things in life.

A BETTER life begins with BETTER WORK.

Learning equals confidence

In short, learning will make you more confident in yourself and in your future. Your perspective will change so you begin to see the journey of life differently. I encourage you to take the first step if you haven’t already. Find something new you want to learn today, and do it!

BETTER WORK communities have mentors who are available to walk alongside you during your journey. Visit betteropportunity.org to find out more.

Promote Purchasing Power—Not the Minimum Wage

by Erik Randolph | Jul 13, 2021

Promote Purchasing Power—Not the Minimum Wage

How to help working families the most

During a focus group session on working class families we recently conducted at the Georgia Center for Opportunity, Jazmine* made an observation more perceptive than most experts.

Our focus group consisted of working-class African-Americans who did not have a college degree and who were not employed in a managerial position nor on track to become a manager.

Knowing financial stress up close, Jazmine essentially said that either the minimum wage should be increased or the cost of living should be lowered.

Her observation is a perfect segue from my prior blogs on:

the empirical economic evidence against the minimum wage,
why the minimum wage is bad news for small business and the overall economy, and
alternative strategies to the minimum wage that help everyone, instead of just some workers at the expense of others.

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Promoting Purchasing Power

The Employment Act of 1946 declared it is the policy and responsibility of the federal government to:

“promote maximum employment, production, and purchasing power.”

Promoting purchasing power means lowering the cost of living, as Jazmine suggested.

Solidified in the 1951 Accord with the Treasury Department, the responsibility ultimately fell to the Federal Reserve to conduct monetary policy as we know it today.

How well has the Fed done with promoting purchasing power? Horribly, quite frankly.

Since 1951, prices have increased 3.4% annually on average, as measured by the geometric mean. In other words, the price level was tenfold higher in 2020 than in 1951. Prices doubled each generation.

It is widely accepted that the poor suffer most from inflation because they spend a higher portion of their income on necessities, and their income growth typically lags others.

For example, according to the most recent mid-year consumer expenditure report from the Bureau of Labor Statistics, consumers in the lowest income quintile spend 82.2 percent of their income on housing, transportation, food, and healthcare, compared to 64.4 percent for the highest quintile. A five percent inflation rate would cost those in the lowest quintile an additional $1,156 for these items on a budget that is already tight, averaging $28,141. A 10% inflation rate would double those costs to $2,312.

Worse, those in the lowest quintile are unable to save for their future, and inflation erodes away the value of the little savings they do have. Consider that on average, those in the lowest quintile purchased only $563 in personal insurance or toward their pensions, compared to $19,736 for those in the highest quintile. This disparity guarantees the poor will be inadequately prepared for retirement or unforeseen loss or tragedy.

Prior to the federal government taking on the responsibility of promoting purchasing power, prices not only remained fairly stable but actually decreased during times of relative peace. Typically, they only increased dramatically during times of war.

This pattern can be seen visually in the accompanying chart using the Consumer Price Index and related data from the Federal Reserve Bank of Minneapolis. For example, the price level increased 24% due to the War of 1812 but then deflated 57% over 47 years until the start of the Civil War, even after accounting for a slight bump up due to the Mexican War.

The pattern was similar for the remainder of the century. Prices increased 74% during the Civil War but then deflated 47% to its pre-Civil War level until the start of the 20th Century.* Although the price level rose somewhat during the progressive era, it was still 30% lower at the start of World War I than at the close of the Civil War.

America’s inflationary policy

Unfortunately, a 1978 law changed promoting purchasing power to become the lame “reasonable price stability,” which is not the same thing.

Over the years, the Fed has allowed inflation as a matter of policy. In 2012, Fed Chairman Ben Bernanke explicitly stated for the first time an inflation target of 2% per year. If the Fed can somehow hold to this target, which it has not been able to do historically, it equates to doubling the price level every 35 years. Last August, it backed away from this policy. Because of all the pandemic spending and monetary expansions, the Fed approved a policy to allow inflation to rise “modestly” above its 2% target.

It is not just the Fed that has shied away from promoting purchasing power. In 1978, and in the midst of the stagflation years, Congress legislated the modest goal that inflation should be 3% or less, but the target rate was supposed to come down to zero percent by 1988 unless it might have impeded employment.

The Fed is not alone to blame for the inability of the federal government to control inflation. Congress’s lack of fiscal discipline resulting in soaring budget deficits place the Fed in a tenuous position to keep interest rates low so federal debt service costs also remain low. Furthermore, recent Fed direct purchases of Treasury debt because of all that federal spending adds to the money supply, eroding—not promoting—purchasing power.

How Congress can better help the average working family

If economics has any immutable law, it must be that you can’t get something out of nothing. This explains why the Consumer Price Index increased 5.4% since last year, as announced today by the Bureau of Labor Statistics. And the rate of increase appears to be accelerating. The monthly rate was 0.6% in May but 0.9% in June. If this June inflation rate persists, and hopefully it does not, we will have double digit inflation. A 0.9% monthly rate equates to an 11.4 % annual rate.

Considering all the recent deficit spending by Congress and expansionary policies by the Fed, expect more of the same, or worse. In fact, according to a survey of economists in yesterday’s Wall Street Journal, “Americans should brace themselves” because economists are waking up to the prospect of higher inflation, expecting “brisk price increases for a while.”

Economic history indicates deflation should be the norm. In fact, innovation spawns increased productivity that allows prices to fall, which should show up as deflation. We have the opposite: productivity gains with inflation. This outcome places the blame squarely on monetary and fiscal policy.

In the meantime, Jazmine and other hard working Americans struggle to keep up with rising prices. Instead of pushing for increases in the minimum wage that help some at the expense of others, Congress needs to renew our nation’s purchasing power policy and get its fiscal house in order.

*Jazmine’s last name withheld for confidentiality.

*This is not intuitive. It takes a smaller percent decrease to offset a percent increase, such as a 43% reduction will offset a 74% increase. For example, suppose you receive a 20 percent pay raise this week, but next week you receive a 20 percent pay cut. Are you back where you started? The answer is no; you are worse off. If your weekly pay was $100, the increase took you to $120, but then your pay cut took you to $96, even lower than your starting point.

Erik Randolph is the Director of Research at the Georgia Center for Opportunity.

Putting Georgia’s employment numbers in perspective

by Erik Randolph | Jun 24, 2021

Putting Georgia’s employment numbers in perspective

Is there any reason not to cheer? Georgia’s unemployment rate dropped to 4.1 percent in May.

Here are three reasons why this looks good for Georgia.

First, the unemployment rate is declining, giving optimism that the economy is bouncing back from the pandemic.

Second, there were only two periods in recorded history when Georgia’s unemployment rate was this low or lower. Starting from 1976—the extent of available data from the U.S. Bureau of Labor Statistics (BLS) on unemployment rates for the states—the first period was between October 1998 and July 2001 when the rate reached as low as 3.4 percent. This period occurred after the long economic expansion of the 1990s.

The other period—from April 2018 to the start of the pandemic—just occurred with Donald Trump in the White House. During this period, Georgia broke its best record by achieving 3.3 percent.

Third, Georgia’s rate is the 16th lowest in the country, beating out 34 other states. For comparison, the United States as a whole has a rate of 5.8 percent rate, considerably higher than Georgia’s.

But wait. Is the unemployment rate artificially low?

While optimism is merited, it is important to put the unemployment numbers in perspective.

Unemployment percentages do not capture those who do not participate in the labor force. According to the BLS, anyone not employed who had not actively looked for a job during the prior four weeks is not part of the labor force. Therefore, any person temporarily not looking for work is not accounted for when the BLS calculates the official unemployment rate. Especially now with all the repercussions of the pandemic, all those potential workers who have been sitting on the sidelines for the last four weeks are simply not counted.

The behavior of labor force participation is a loose link for unemployment numbers. Normally, when economic times are good, sidelined workers and even retirees come back into the labor force, which can push the unemployment rate up. When times are bad, the opposite happens. Workers drop out of the labor force, artificially lowering the unemployment rate.

During the depth of the pandemic, and as expected, the labor force participation rate in Georgia dropped—to 59.4 percent to be precise, compared to 62.9 percent just prior to the pandemic. In terms of real people, there were an estimated 260,575 fewer workers participating in the labor force—who were not counted among the unemployed, to emphasize the point. Participation bounced back some to 61.7 percent, but still there are 40,934 fewer workers in the labor force.

Other ways to measure it

BLS’s U-6 labor underutilization metric is another way to shed light on unemployment. It adds to the unemployed those discouraged and other “marginally attached” workers as well as part-time workers wanting full-time work but cannot find it.

Nationally, the U-6 rate hit a historic high of 22.9 percent in April 2020 representing 36.3 million people. It has since dropped to 10.2 percent representing 16.5 million people. However, in the months prior to the pandemic, the rate was at historic lows—in fact, as low as 6.8 percent. Obviously, while 10.2 percent is far better than 22.9 percent, it is significantly worse than 6.8 percent, representing a difference of 5.3 million workers.

Unfortunately, monthly U-6 data is not available for the states, making any comparison difficult. The BLS currently publishes only experimental U-6 state data averaged over a year’s time.

More useful for the states is the Nonfarm Employment estimates from BLS’s Current Employment Statistics survey. Only two states—Utah & Idaho—have caught up with employment from where they were in February 2020 before the pandemic hit. In contrast, the U.S as a whole is still 5% behind. Georgia ranks 16th among the states and is 4.0 % behind. Hawaii (-14.8%), New York (-9.6%), and Nevada (-8.6%) are the three states furthest behind.

If we use standard economic ARIMA Model time-series forecasting to estimate where employment would have been absent the pandemic, no state is back on track. The United States is 6.8% behind, and Georgia ranks near the middle in 27th place at −6.1%. Utah and Idaho lead the pack being the furthest ahead, while Hawaii, Nevada, New York, California, and Massachusetts trail the pack.

Observations on state differences and policies

In viewing the differences in employment among the states, the more rural states appear to be doing better. The states more dependent on tourism appear to be doing worse. State governments that implemented less severe lockdowns appear to be doing better. To test these observations, we will be running regression analyses to tease out any correlations. We will post the results when completed.

In the meantime, it is important for government to adopt policies that will help businesses to rebound and make it easier for startups. The goal should be not to just lower unemployment but also to bring those sidelined workers back into the labor force.

Erik Randolph is the Director of Research at the Georgia Center for Opportunity.

AEI Event: Improving Prisoner Reentry and Reducing Recidivism

by Georgia Center for Opportunity | Jul 29, 2015

Watch a recording of the event here.

Georgia Center for Opportunity was privileged to partner with the American Enterprise Institute (AEI) in co-hosting an event on the issue of prisoner reentry at AEI’s headquarters in Washington, D.C. on Tuesday, July 28^th.

The event featured two panels: The first consisting of non-profits leaders who have faced challenges and successes in helping former prisoners successfully reintegrate into society, and the second featuring government leaders who have similarly faced challenges and successes in working to reform the criminal justice system itself.

GCO’s Executive Vice President and General Counsel, Eric Cochling, moderated the first panel that featured four non-profit leaders, including Craig DeRoche of Justice Fellowship, Harriet McDonald of The Doe Fund, Bryan Kelley of Prison Entrepreneurship Program, and Harold Dean Trulear of Healing Communities. The panelists discussed such themes as the importance for Americans to view prisoners and people with a criminal record as a valuable asset to society, the importance of work and its role in promoting human dignity and successful reintegration, the necessity for returning citizens to experience a change in attitudes and values to avoid recidivating, and the role of the community in embracing returning citizens and “walking with” them in their journey.

The second panel was moderated by Robert Doar, Morgridge Fellow in Poverty Studies at AEI, and featured three government leaders: Georgia’s own Jay Neal, former state representative and current executive director of the Governor’s Office of Transition, Support and Reentry, Gary Mohr, commissioner of the Ohio Department of Rehabilitation and Correction, and Chauncey Parker, special policy advisor in the Manhattan District Attorney’s Office. This panel highlighted specific approaches that states have taken to improve prisoner reentry as a means of promoting public safety, including instilling the mindset that reentry begins at the point of arrest, basing decisions on data instead of knee-jerk reactions, facilitating better connections between family members and incarcerated loved ones, and instilling the importance of viewing offenders as human beings among the criminal justice workforce.

Watch the event and gain a better understanding of how effective collaboration between families, faith communities, service providers, and the government, as well as a changed perception of the ones they are serving, is essential for promoting successful reintegration among returning citizens.

Minimizing Debt and Promoting Successful Reentry

by Georgia Center for Opportunity | May 6, 2015

This is the final entry in a series of posts highlighting GCO’s report, A High Price to Pay: Recommendations for Minimizing Debt’s Role in Driving Recidivism Rates. The first entry provided an overview of the report, the second entry laid out causes of debt for people reentering society from prison, and the third entry details the consequences of debt for returning citizens .This final post summarizes what has been said so far and outlines recommendations for the state to implement.

It is in the state’s interest and in the interest of justice for returning citizens[1] to pay debts and obligations owed to family members, victims, courts, and criminal justice agencies. Children need financial support from parents who have been incarcerated, victims ought to receive just compensation for losses and damages they have suffered, and courts and criminal justice agencies should be reimbursed for services that they provide. Nonetheless, for many people reentering society after a period of incarceration, debts and the inability to earn money while in prison create serious obstacles to a successful transition.

It is not uncommon for returning citizens to leave prison owing tens of thousands of dollars in child support arrears, restitution, court fines, fees, and surcharges to criminal justice agencies. Unrealistic terms for repaying these debts can discourage them from paying anything at all and encourages returning citizens to engage in the illegal, underground economy as a means of earning an income. Such actions result in probation or parole violations and may result in re-incarceration, the ultimate measure of recidivism.

Enforcing the repayment of debts and obligations without considering the needs and financial circumstances of returning citizens works contrary to the interests of all stakeholders involved. At least 95 percent of those who enter state prisons will return to society at some point, and these citizens often struggle to provide for their own basic needs upon release, much less service the debt they have incurred as a result of their conviction. Simply affording rent payments, buying food and clothing, and covering transportation expenses can be remarkably difficult for a person with a criminal record. The state needs to take this into consideration and set realistic terms for returning citizens to pay current obligations and repay debts, while at the same time establishing a reliable, coordinated, and systematic approach for the collection of money that is due. Such reform would increase the amount of money received by families, victims, courts, and criminal justice agencies, while decreasing the costs associated with recidivism.

The state of Georgia should consider implementing the following recommendations as a means of encouraging returning citizens to repay their debts and obligations while taking into consideration their need to be successfully reintegrated and reestablished within the community:

Identify offenders with child support involvement upon entry to prison

The state should identify offenders with child support responsibilities upon entry to prison by electronically matching the Georgia Department of Corrections (GDC) and Division of Child Support Services (DCSS) agency caseloads using common identifiers such as social security numbers and birth dates. This data match will allow the DCSS to provide pertinent information to incarcerated non-custodial parents concerning their child support obligation(s), as well as identify those who need to establish paternity and/or child support orders but have not already done so.

Provide child support information and services to parents during their incarceration

Once identified, the DCSS should inform incarcerated non-custodial parents of the amount of their child support obligation(s), notify them periodically of the amount their arrears have accrued, work with them to develop a plan for meeting these obligations upon release, and inform them of the incentives available to them through the state for consistent payment of support.

Provide a 90-day grace period to ease the transition phase

Upon release, the court and DCSS should automatically review the amount of child support returning citizens can pay on a case-by-case basis. Those who have no means of paying anything at that time should be given a grace period of 90 days before having to pay their obligations and repay debt. This grace period will provide them time to find a job, housing, transportation, and other essential needs that can enable them to meet their obligation. After the 90 days, those who still cannot pay their child support orders should be referred to the Georgia Fatherhood Program (GFP) or a Child Support Problem Solving Court (PSC) to receive additional help in finding a job and meeting their obligations.

Limit amount of wages to be garnished by the state

For returning citizens who have a job and are able to pay some amount of child support, the court should determine on a case-by-case basis the amount of wages to be garnished from their paycheck. The court should take into consideration such factors as the returning citizen’s income, cost of living, and other dependents that he or she is taking care of. The state should set a ceiling of 50 percent as the maximum percentage of wages to be withheld from a returning citizen – something which a third of the states have already done.

Forgive fines, fees, and surcharges owed to the state

The state should consider incentivizing returning citizens to pay child support and restitution by forgiving (or waiving) all or some of the fines, fees, and surcharges owed to the state for those who meet their monthly obligations. Forgiving these expenses in exchange for consistent payments would encourage greater compliance among returning citizens, which means that families and victims would receive more money in the long run. The state should tie participation in reparative activities as a condition for receiving these benefits, including drug treatment services, GFP, a PSC, or community service projects.

Reinstate driver’s licenses that were suspended for non-payment of child support

The state should lift driver’s license suspensions for returning citizens’ whose licenses were suspended because they were more than 60 days in arrears in making payments in full for current support, periodic payments on a support arrearage, or periodic payments on a reimbursement for public assistance. To maintain driving privileges, the state should require that returning citizens be actively seeking a job or actively working, and that they consistently pay child support according to their means.

Forgive arrears and interest owed to the state

The state should forgive arrears and interest owed to the state in order to motivate obligors to comply with long-term payment plans, to eliminate uncollectible debt, to facilitate case closure where appropriate, and to help families become more self-sufficient. To receive this benefit, the state should require that returning citizens make a set number of consecutive payments in exchange for a set percentage of arrears and interest owed to the state to be forgiven. Returning citizens should also have a determined minimum amount of arrears to participate in the debt compromise program.

Designate a single agency to track and consolidate returning citizens’ debts

One agency should be designated to track and consolidate individual returning citizens’ debts in a centralized tracking system and ensure that it remains updated as the person travels through the criminal justice system and is released into the community. This agency should be responsible for collecting all offense-related debt and disbursing funds according to the priority set by the federal and state government.[2] Regular updates concerning the total amount of debt owed and expected dates and amounts of repayment should be sent to returning citizens, victims, courts, and criminal justice agencies. Courts and criminal justice agencies should use this information to establish realistic repayment plans for returning citizens based on their financial situation.

Footnotes

[1] We realize that some will be frustrated by our use of the term “returning citizen” in this report and would prefer to see us use a more familiar term such as “ex-offender.” Our use of the term “returning citizen” is intended not as a political statement but as an acknowledgement that almost all offenders will return to our community at some point in the future and that it is in our best interest to think of offenders in that light, as our thinking will shape how we treat them during incarceration and what we expect of them upon release.

[2] Offense-related debt does not include child support, which is collected and tracked by DCSS and cannot be consolidated with restitution, fines, fees, and surcharges. Nonetheless, the amount of child support that has been collected should also be tracked by the agency that is consolidating offense-related debts, because the amount that goes toward child support (which must be paid first in priority according to federal law) impacts the amount that can be paid toward these other debts.

Endnotes

To view the endnotes included within the recommendations section of the report, please click here.

***Edit to the report: May 6, 2015

At the time of writing the report, the author was unaware that Georgia already has a detailed debt reduction program in place to assist indigent non-custodial parents who owe arrears to the state. The Division of Child Support Services’ (DCSS) State Debt Reduction Program (SDRP) provides non-custodial parents the ability to have a significant percentage of their state-owed arrears reduced if an agent determines that:

(1) “Good cause” existed for the nonpayment of the public assistance debt;

(2) Repayment or enforcement of the debt would result in substantial and unreasonable hardship for the parent owing the debt;

(3) The non-custodial parent is currently unable to pay the debt;

(4) The non-custodial parent is making regular payments of current child support, regardless of the amount.

The amount that eligible non-custodial parents can have their arrears reduced depends upon the amount they owe. Those with a greater amount of arrears owed to the state are eligible to have a greater percentage reduced (with the exception of those who owe less than $100, who can have their entire state-owed arrears balance waived). For example, non-custodial parents with state-owed arrears balances of $9,000 or greater can have their arrears waved or reduced by 75 percent, so long as they pay the remaining 25 percent owed in a lump sum payment or in 24 monthly installments.[i]

While Georgia has a detailed debt reduction program in place, it appears that the participation in the program is limited. In 2014, only 349 out of the 354,427 total non-custodial parents ordered to pay child support in Georgia entered into the plan, based on the 30 DCSS offices that reported.[ii]* More should be done to enroll struggling returning citizens with child support arrears owed to the state into the program. One way the state can do this is by promoting it within the Fatherhood Program and Child Support Problem Solving Courts (PSCs), which returning citizens will be likely to participate in.

Sources:

[i] Division of Child Support Services, “State Debt Reduction Guidelines,” Employee Reference Guide – Standard Operating Procedure 251, Email Release May 24, 2013.

[ii] Erica Thornton, Manager of the Policy and Paternity Unit, Division of Child Support Services, Georgia Department of Human Services, email message to author, February 3, 2015; Georgia Department of Human Services, “Division of Child Support Services: Fact Sheet,” Revised November 2014.

*While not all 354,427 non-custodial parents ordered to pay child support in Georgia owe arrears to the state, the large figure suggests that there may be numerous non-custodial parents (particularly those reentering society from prison) who do (or should) qualify for the program, but are currently being overlooked.