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America’s Poor Working Hard But Still Falling Behind

New Oxfam America poll reveals harsh realities in the world’s most unequal rich country

WASHINGTON, Aug. 28, 2013, As the nation prepares to mark Labor Day, Oxfam America released the findings of a new poll commissioned to explore the realities of America’s working poor. The survey reveals that America’s low-wage workers have a fierce work ethic and believe that hard work can pay off.  However, they hold jobs that trap them in a cycle of working hard but unable to get ahead and with little hope for economic mobility.

The survey, which was conducted on Oxfam America’s behalf by Hart Research Associates, found that most low-wage workers barely scrape by month-to-month, are plagued by worries about meeting their families’ basic needs, and often turn to loans from family and friends, credit card debt, pawn shops and payday loans, and government programs just to get by. The poll also found that the workers facing the greatest challenges are also the most vulnerable, and that includes parents, women, and those making less than $10 per hour.

“For tens of millions of low-wage American workers, Labor Day is another long day on the job—doing hard work, often at irregular hours, for low pay and few benefits,” said Raymond C. Offenheiser, president of Oxfam America. “As our nation struggles to recover from the Great Recession, there is little recovery for a quarter of American workers who are stuck in low-wage jobs. Our country is now the most unequal rich country in the world, and has the largest percentage of low-wage workers of any advanced economy.”

Oxfam’s survey shows that in addition to inadequate incomes, low-wage workers also face challenges and obstacles that make it difficult to maintain basic job security and to find paths for advancement. Almost a third of those surveyed reported that they have no workplace benefits, such as paid sick leave, health insurance or paid vacation time. And one in six reported having lost a job in the last four years because they got sick or had to take care of a child or family member. A majority of the working poor surveyed believe that it is more common for middle-class people to fall out of the middle class than for low-income people to rise into the middle class.

“Poverty in the US looks very different from poverty in the developing countries where Oxfam often works,” said Offenheiser. “But what is the same – be it in the world’s richest country or its poorest– is the injustice of a society in which a few are mind-bogglingly rich, some are doing well, and too many are working hard but simply can’t make ends meet.”

A majority of low-wage workers reported that they believe that government has a responsibility to ensure that everyone has enough to eat, has access to health care and a roof over their head. But they also believe that government policy is slanted toward benefiting the rich rather than helping the poor get ahead.

“Despite their struggles, our survey finds that low-wage workers don’t want hand-outs; they want a level playing field. They want fair wages, decent working conditions, and dignity,” continued Offenheiser. “A majority of the working poor support a higher minimum wage, help in making child care more affordable, and expanding the earned income tax credit.”

Note: According to the Gini index, the most commonly used measure of inequality, the United States is the wealthiest nation with the largest difference between the poorest and richest.

Oxfam America is a global organization working to right the wrongs of poverty, hunger, and injustice.  We save lives, develop long-term solutions to poverty, and campaign for social change.  As one of 17 members of the international Oxfam confederation, we work with people in more than 90 countries to create lasting solutions. To join our efforts or learn more, go to www.oxfamamerica.org

 

SOURCE:

Oxfam America
http://www.oxfamamerica.org/

 

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2013 Mid-Year Outlook: Economic Growth On the Road to “Normal”

 

Strengthening Housing Market Pushing Economy Forward

WASHINGTON, June 13, 2013 – The U.S. may be well into a prolonged period of steady economic growth, but it hasn’t yet reached its full potential, according to Fannie Mae’s (OTC Bulletin Board: FNMA) Economic & Strategic Research Group. Fiscal headwinds are expected to keep growth to below 2.0 percent for the first half of the year, with gradual strengthening in the second half of 2013 and into 2014. However, as fiscal drags wane, growth should continue to move in the positive direction amid an ongoing recovery in housing, rising household wealth, and expanded energy production.

“At the outset of the year, we forecasted that 2013 would witness sustainable but below-par growth as the economy begins its transition to more normal levels. Halfway through the year, our view is little changed,” said Fannie Mae Chief Economist Doug Duncan. “We expect approximately 2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012. This is consistent with the incremental improvement seen over the past few years but still below the economy’s potential. Our forecast calls for growth to push past 2.5 percent in 2014, boosted largely by tailwinds from the strengthening housing market.”

Housing was largely positive entering the spring/summer season, with various indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels. Despite rising mortgage rates during the past month, which have affected refinance originations, affordability conditions remain high and should not present a significant obstacle to potential homebuyers.

For an audio synopsis of the June 2013 Economic Outlook, listen to the podcast on the Economic & Strategic Research site at www.fanniemae.com. Visit the site to read the full June 2013 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

Fannie Mae enables people to buy, refinance, or rent a home.

Visit us at: http://www.fanniemae.com/progress

Follow us on Twitter: http://twitter.com/FannieMae

SOURCE:

Fannie Mae

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Statement of acting Labor Secretary Seth D. Harris on April employment numbers

WASHINGTON, May 3, 2013, Acting Secretary of Labor Seth D. Harris issued the following statement about the April 2013 Employment Situation report released today:

“This morning’s report shows that the economy added 165,000 total nonfarm jobs in April, and the unemployment rate dipped to 7.5 percent, a four-year low. That means 6.8 million new jobs over 38 consecutive months of private-sector job growth following the Great Recession. The revisions to February and March that show additional employment gains of 114,000 jobs are further indication that – to this point – 2013 has shown a fuller, more accelerated jobs recovery than we have yet seen.

“The unemployment rate has declined by 0.4 percentage point since January. In April, the number of long-term unemployed (those jobless for 27 weeks or more) declined by 258,000. Significant gains this month in professional and business services, health care and retail employment are indications that many of the jobs being added are providing good, middle-class opportunities for the unemployed. The bottom line is that people are finding work: There are 1.65 million more people working today than 12 months ago.

“But let us not mistake a report that exceeds our expectations with unequivocal economic success. The difference between a moderate jobs report and an excellent report is the sequester. These misguided, arbitrary budget cuts are putting the brakes on an economy that is gaining momentum in the private sector – just when we need to hit the gas. Because of the sequester, we are not creating the abundance of new jobs that will put everyone who wants to work back on the job and end the cruel game of economic musical chairs that leaves so many hard-working people out of work when the music stops. We need a balanced approach that makes investments in job-creating activities while pursuing a long-term deficit reduction strategy.

“President Obama has proposed several measures that will jump-start the economy and catalyze job growth. He continues to push for infrastructure investments that will breathe new life into the construction industry, in particular. In addition to physical infrastructure, we need to modernize our skills infrastructure, providing the training and investments in human capital that will prepare people for good jobs and give them ladders of opportunity.”

U.S. Department of Labor news materials are accessible at http://www.dol.gov. The information above is available in large print, Braille or CD from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.

Connect with DOL at
http://social.dol.gov
http://twitter.com/usdol
http://www.facebook.com/departmentoflabor
http://www.youtube.com/usdepartmentoflabor
http://social.dol.gov/blog/
http://www.flickr.com/photos/52862363@N07/

SOURCE:

U.S. Department of Labor

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Startups Advise Obama: Focus on Taxes and Talent as Second Term Begins

CEOs and Executives from Startup Companies Nationwide Offered Advice to Support the Innovation Economy in Silicon Valley Bank’s Annual Startup Outlook Survey

SANTA CLARA, CA, Jan. 18, 2013, With the second inauguration of President Obama pending, Silicon Valley Bank, financial partner to innovation companies worldwide, asked startup companies across America: “What piece of advice would you give to President Obama with regards to supporting the innovation economy?” Simplifying taxes and focusing on building a strong talent pool made up nearly half of all responses, which came from 600 comments by CEOs and executives of startup companies across the US. The question was part of Silicon Valley Bank’s fourth annual survey of startup companies nationwide.

See infographic.

“Startup companies are looking for simplicity and relevant talent above all,” said Greg Becker , CEO of Silicon Valley Bank. “They said things like, ‘cut the red tape,’ ‘simplify the tax code’ and ‘improve US science and math education to best-in-world outcomes.'”

“Our clients – high growth innovation companies – create jobs and outperform the broader economy. We should be doing everything we can as a country to make it easy for them to grow.”

High growth small companies, while small in number, have an outsized impact on the U.S. economy. They consume roughly 0.1-0.2% of U.S. GDP in invested capital, but turn into companies that create roughly 11 percent of U.S. private sector employment and 21 percent of U.S. GDP – or roughly twelve million jobs and over $3 trillion in annual revenues.

The most common advice, offered by nearly one-third of startup managers who participated in the survey, was in regard to taxes. Nearly 20 percent of the respondents believed the government should focus on developing a deep talent pool through a combination of approaches including immigration reform and better science and math education. A running theme in the comments was also the desire for government to work together on a bi-partisan basis.

Advice for the president fell into a few major categories:

  • Overhaul Tax System – 28% “Keep it simple” “Focus on ways to stimulate growth”
  • Build Talent Pool – 18% “Make it easy to hire the best & brightest from around the world”
  • Ease Regulation – 12% “US is the hardest country in the world to do business”
  • Promote Investment – 11% “Make investment in growth companies easier”
  • Champion Innovation – 10% “Make it very, very simple and cheap for the little guy to win!”
  • Give Us Space – 9% “Minimize Federal government involvement” “Leave us alone”
  • Other – 13% “Be more bi-partisan – both the President and Congress”

Silicon Valley Bank conducted its annual Startup Outlook survey in December 2012. More than 750 executives of startup companies, defined as those in the innovation sector with less than $100 million in annual revenue, responded. The company will be releasing additional data and reports based on the survey in the coming months. View all news related to the results of the Startup Outlook survey at http://www.svb.com/startup-outlook-report/ and follow the conversation on Twitter at @SVB_Financial #StartupOutlook.

About Silicon Valley Bank
Silicon Valley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 27 U.S. offices and six international operations. (Nasdaq: SIVB) www.svb.com.

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

SOURCE: Silicon Valley Bank

RELATED LINKS: http://www.svb.com

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Consumer Financial Protection Bureau issues rules to strengthen protections for high-cost mortgages

Bureau Also Expands Time Frame for Required Escrow Accounts

WASHINGTON, D.C., Jan. 10, 2013, Today the Consumer Financial Protection Bureau (CFPB) issued final rules to strengthen consumer protections for high-cost mortgages and to provide consumers with information about homeownership counseling. The Bureau also finalized a rule that requires escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans.

“Addressing problems in the mortgage market is critical to helping our economy recover,” said CFPB Director Richard Cordray. “Today’s changes will better help consumers to understand the real costs of owning a home while protecting them from harmful practices that can trap them into high-cost mortgages.”

The Home Ownership and Equity Protection Act (HOEPA) was enacted in 1994 to address abuses in home-equity lending and refinances. Since then, HOEPA has deterred high-rate and high-fee lending in those markets. In recent years, high-cost mortgages have made up only about 0.2 percent of those types of loans.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) expanded HOEPA to cover home purchase loans and home equity lines of credit (“HELOCs”); revised HOEPA’s rate- and fee-thresholds for coverage; added a new coverage test based on a transaction’s prepayment penalties; and provided new limitations on risky loan features, as well as other new protections for high-cost mortgages. The CFPB has finalized rules to implement the Dodd-Frank Act’s amendments to HOEPA.

For loans that are high-cost mortgages, today’s final rule:

  • Bans potentially risky features: For mortgages that qualify as high-cost, the rule      generally bans balloon payments (a large, lump sum payment usually due at      the end of the loan) with some exceptions, such as for certain types of      loans made by creditors serving rural or underserved areas, and bans      penalties for paying the loan early.
  • Bans and limits certain fees and practices: The CFPB’s rule bans fees for modifying loans, caps      late fees at four percent of the payment that is past due, generally      prohibits closing costs from being rolled into the loan amount, and      restricts the charging of fees when consumers ask for a payoff statement      (a document that tells borrowers how much they need to pay off the loan).      The rule also prohibits certain bad practices, such as encouraging a      consumer to default on an existing loan to be refinanced by a high-cost      mortgage.
  • Requires housing counseling: The rule requires consumers to receive housing      counseling before taking out a high-cost mortgage.

In addition to strengthening the protections for high-cost mortgages, the Bureau today is implementing a requirement of the Dodd-Frank Act that lenders provide a list of homeownership counseling organizations to consumers shortly after they apply for a mortgage so consumers know where to get help when deciding what loan is best for them.

The Bureau is also implementing other changes made by the Dodd-Frank Act concerning escrow accounts. An escrow account is an account that a lender may set up to pay certain recurring property-related expenses on a consumer’s behalf, such as property taxes and homeowner’s insurance. Escrow accounts help to ensure that consumers have enough money to pay those bills when they come because the lender breaks the expenses down into monthly installments and adds them to the monthly mortgage payment. Through an escrow account, consumers can better see the true cost of owning a home with insurance and tax costs laid out with each mortgage payment and are better assured that those costs are paid in a timely manner.

Under current regulations, creditors are required to establish escrow accounts for certain higher-priced mortgage loans for a minimum of one year. Today’s final rule implements changes from the Dodd-Frank Act that generally extend the required duration of an escrow account on such mortgage loans from a minimum of one year to a minimum of five years. To preserve access to credit, the rule exempts loans made by certain creditors that operate predominantly in rural or underserved areas, as long as certain other criteria are met.

The rules will be available later today at: http://www.consumerfinance.gov/regulations

 

A consumer guide to the final HOEPA rule can be found at: http://files.consumerfinance.gov/f/201301_cfpb_high-cost-mortgage-rule_what-it-means-for-consumers.pdf

 

A consumer guide to the final Escrows rule can be found at: http://files.consumerfinance.gov/f/201301_cfpb_escrow-requirements-rule_what-it-means-for-consumers.pdf

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New Report Shows How Federal Programs Help Low-Income Rural Families Become Homeowners

WASHINGTON, A new report issued by the National Rural Housing Coalition details how two USDA programs have expanded homeownership opportunities to the nation’s poorest rural families – at little expense to the federal government.

Over the past 60 years, more than 2.1 million low-income rural families have accessed affordable mortgages under the Section 502 Direct Loan program, which is credited with building more than $40 billion in wealth for the nation’s rural poor. The Section 523 Mutual Self-Help Housing program is the only federal homeownership program of its kind; small groups of six to twelve rural families join together on nights and weekends to build each other’s homes, reducing construction costs, earning equity, and making lasting investments in their communities.

The Coalition report presents key findings from their analysis of USDA program data. Overall, the report finds that despite serving families with limited economic means, these programs are among the most cost-effective federal housing programs. Section 502 Direct Loans cost an average $7,200 over the lifetime of the loan – less than the annual cost of other federal housing programs. Likewise, by providing at least 65 percent of the construction labor on each home – often more than 1,000 hours − Self-Help Housing families earn an average $27,000 in equity.

The report also shows that benefits extend beyond participating families to rural communities and the nation. In the past 5 years, the Section 502 Direct Loan program has led to the creation of over 100,000 jobs and $5.2 billion in local income. The Self-Help Housing program has resulted in nearly 18,000 jobs and $1.16 billion local income.

The report includes twelve success stories that illustrate how these programs have been used by rural families to become homeowners.

“Underlying this report is a simple truth: responsible homeownership continues to be the single, best, long-term investment for most Americans, and the primary source of wealth and financial security for low-income rural families,” said Bob Rapoza , Executive Secretary of the National Rural Housing Coalition. “For many low-income families, these programs are the only available source of safe, decent, and affordable housing. Instead of cutting funding for these programs, Congress should invest in them as key ways to help improve access to affordable housing.”

SOURCE National Rural Housing Coalition

RELATED LINKS
http://www.ruralhousingcoalition.org

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