How many presidential candidates does it take to screw in a lightbulb?

October 31, 2016

Another presidential campaign season has come and (almost) gone with little attention to climate change and the future of energy production. Though both candidates have made statements on those topics, they have not received much national debate.

By diminishing energy and climate change’s importance as a campaign topic, we lose another chance to analyze the plans, discuss their merits, and make actual progress toward putting out the global fires that await the next president.  

Finding the light switch

The biggest challenge to analyzing their energy solutions is that the candidates don’t agree on the problem or the goals. Most of the attention in this election has been on the candidates’ belief in climate science. Clinton has publicized her confidence in climate science, while Trump has variably denied its findings or reframed questions about his position.

The evidence on climate change has been clear for some time, yet the same debate has been rehashed for several election cycles going back as far as 2000. That debates over fundamentally accepted science are still at the center of political attention 16 years later prohibits any substantive conversation about energy beyond monitoring today’s price at the pump.

Keeping the lights on

Both candidates actually agree on at least two goals: to provide enough energy for current need and future growth, and to be “energy independent”—that is, to rely solely on US or allies’ energy sources.

Clinton has framed the latter as a national security issue while Trump has focused on its domestic economic and employment benefits. Both are accurate assessments of the outcomes of self-reliance, but the platforms have benefitted from the fact that US-sourced natural gas has increased as a share of electrical power plants’ fuel compared to coal—reducing greenhouse gas emissions from coal plants by about half while depressing energy prices and making us ostensibly more self-reliant. Considering that we still import a sizeable amount of fuel (especially petroleum) from not-so-friendly sources, we’re actually a bit far from independence.

Where candidates diverge is on how they plan to get to this state, and how other goals (like mitigating climate change) guide their paths. Clinton supports the Obama administration’s signature Clean Power Plan (CPP), as well as US ratification of the Paris Climate Agreement. She proposes an aggressive shift toward more renewable energy production that exceeds current industry expectations, while using existing fossil-fuel based sources in the near future as a “bridge.”

Clinton has also supported “fracking” (hydraulic fracturing of deep rock to extract natural gas) in the past, too, with certain qualifiers.  

Trump plans to dramatically expand natural gas extraction and coal production as well as open up all other untapped sources of energy including those on federal lands but not necessarily at the exclusion of cost-competitive renewables. Trump plans to scrap the CPP along with other EPA regulations and pull out of the Paris agreement.

Paying the bills

The CPP (still held up in court) would foreseeably lead to price increases in energy but with consequent savings on health care costs as well as other cobenefits. The additional focus on low-income households’ energy use through the CPP’s Clean Energy Incentive Program would also provide opportunities to diminish the cost burden on this group, though programs to date have had mixed successes.

Clinton proposes regulations, incentives, and expanded assistance to low-income households. She also proposes paying special attention to energy needs and climate change effects on the most environmentally vulnerable communities. Clinton supplements these sticks with carrots for household solar installations, with similar programs in places like Arizona having massive success in transitioning energy sources while reducing household energy costs. Other cities and states are already producing energy efficiency and renewable programs by the day, too.

Trump’s “energy revolution” is proposed to wean the country off all foreign energy imports while purportedly not causing any adverse environmental impacts. The revenues from energy production, according to his statements, would then be used to rebuild “roads, schools, bridges and public infrastructure,” though that transfer of funds is not detailed. He also labels his opponent’s plan as “job killing” when combined with other environmental regulations, energy efficiency standards, reductions in fossil fuel-industry subsidies, and renewable energy incentives.

The biggest sector for job transition is certainly in the coal industry, and Clinton has proposed retraining and other assistance plans, though the success of these kinds of programs is still mixed as Urban colleagues describe. But the job-killing aspects of energy transitions for energy workers—or, for the economy as a whole from higher energy prices—are not fully supported even with more aggressive policies beyond either candidate’s current positions like a carbon tax (a position neither candidate currently supports).

For both platforms, there will be immediate costs to the country and to individual Americans’ pocketbooks. And, as science is showing us, there will be future costs to our energy policies. These costs have all been lurking in the shadows in this year’s debate spotlight. But, the light from the world’s burning just might be the one that lets us see the candidates’ platforms.

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How would the candidates deal with the natural disasters that lurk ahead?

October 17, 2016

During this election season, we’ve already seen several natural and environmental hazards wreak havoc. The Louisiana floods this past August and the current wake from Hurricane Matthew are the most recent examples of the 39 major disaster declarations in 2016—so far. Government aid has come to Louisiana while damage is still being assessed along the southeastern seaboard.

We’ve also seen the two major presidential candidates talk about these recent disasters, visit them in some cases, and invariably offer their “thoughts and prayers.” Neither candidate has an explicit policy platform on disaster management. To be fair, few presidential candidates in recent history have brought up disaster planning and assistance in their stump speeches.

What should happen during and after disasters?

A new president needs to know two fundamental things about disaster management: how it works administratively between the various levels of government and how much it costs the federal government.

Neither candidate has said much about the latter or about the ongoing trend of increasing federal resources for disaster relief and recovery.

With regard to intergovernmental management, though, some past comments give insight. After Katrina, for example, then-Senator Clinton argued for a reorganization of the Department of Homeland Security so that FEMA could better equip itself to its former capacity under former President Clinton’s FEMA Chief James Lee Witt—an organization described by most disaster experts as competent and efficient in the face of disasters like Hurricane Andrew.

After 9/11, Clinton was also involved in congressional disaster recovery appropriations.

After Hurricane Sandy, private citizen Trump accused the Obama administration of excessive, politically motivated relief handouts. 

What should happen before disasters?

There is even less in either candidate’s past statements to suggest that they have considered how best to prepare for disasters. Disaster preparedness and mitigation—improving infrastructure, homes, and communities before disasters—has received bipartisan support. A promising policy improvement would be to allocate relatively more resources to mitigation than recovery compared with current policy.

Trump noted recently that revisiting infrastructure due to phenomena like rising sea levels is “probably not the worst thing [he’s] ever heard.” Clinton said recently that disasters pose a threat to local infrastructure and national security. Going further back to the Democratic primary, Clinton also referenced “resilience and mitigation” as a growing need that required bipartisan action.

What should our next president focus on?

We’ve talked before the increasing quantity of disasters and the magnitude of disaster damages. Though there are many natural hazards like earthquakes that are unrelated to climate change’s effects, the severity and frequency of others—tornadoes, hurricanes, wildfires, droughts, and severe storms and floods—are likely to continue increasing.

Having some basic commitment to increasing mitigation in proportion with recovery resources is a start for either candidate. Getting into a few weeds about infrastructure spending is even better. But working out the details of the property insurance—especially National Flood Insurance Program—and disaster planning and awareness at the local levels is going to get us further down the path.

Clinton has stated a link between climate change and disasters, while Trump has (arguably) dismissed climate change, its effects on disaster rates, and the impacts of disasters on communities. If scientific evidence provides any indication of what is to come, whoever is elected will have to reckon with these crises—and how to pay for them.

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For infrastructure, candidates’ plans still leave many holes in the wall—some bigger than others

October 6, 2016

Americans feel the wide gap between needed infrastructure investment and the funds available for it. Families in Cedar Rapids, Iowa face flooding, children in Flint, Michigan are still drinking bottled water, and Washington, DC commuters face regular breakdowns in public transit.  

So it’s no surprise that the presidential candidates have started talking infrastructure. Clinton released her plan almost a year ago. Trump’s announcements last month about his plan to “build the next generation” of infrastructure provides us with the first opportunity to compare.

How much of an investment?

The shared sentiment in both plans is that the infrastructure gap is a major current and future crisis, and that it’ll take a lot of money to fix. Clinton proposes $300 billion in total investment over five years starting in the first 90 days of her term. She supplemented that proposal with related ones of different costs, such as expanding residential solar energy production.

Trump is thinking even bigger. He proposes to “at least” double Clinton’s proposed investment—a value that would come closer to meeting the expected gap and match former candidate Bernie Sanders’s infrastructure proposal.

Both candidates’ platforms would ostensibly yield the expected usual returns from infrastructure investments: jobs, improved services, broader service access, reduced transactional costs, improved household finances and health, and the overall productivity benefits to the country.

But Clinton and Trump’s proposal similarities end at the big-ticket purchase.

What does this investment get us?

Clinton has prioritized fixing existing transportation (filling in the potholes), expanding public transit and consumer broadband, and modernizing freight transport, airports, energy grids, and water supply and waste distribution. Included in this list of individual infrastructure pots is a more global reconsideration of how current formulas allocate federal funding to better target local needs. She also proposed earmarking $50 billion of the $300 billion to traditionally underserved communities after the Flint water crisis. My colleague, Tracy Gordon, discussed Clinton’s plan last year.

In comparison, Trump painted a broad brushstroke of need among “roads, bridges, railways, tunnels, seaports, and airports.” His campaign has promised a detailed plan since last month’s announcement, but has not released one. If the recent debate provides any clues about Trump’s infrastructure priorities, though, airport modernization may be an early priority.

How do they pay for it?

Clinton’s plans rest squarely on public resources, with the $300 billion preliminary investment embedded in her wider tax and expenditure plans. She proposes $275 billion in direct spending, plus a $25 billion infrastructure bank advised by an independent board of experts to approve lending and loan guarantees that could leverage another $225 billion in financing. One proposed source of the $300 billion would be a tax overhaul for companies with foreign assets.

Trump proposes taking advantage of current low interest rates to issue infrastructure bonds—essentially borrowing money to cover the proposed bills. Presumably the impending proposal would detail just how these bonds would be issued and repaid.

What’s ahead?

The next step we may see is Trump’s campaign releasing more details on what and how he proposes spending infrastructure dollars allowing additional comparison between his and Clinton’s plan.

An additional complexity is the difficulty in getting any major spending initiative approved by future congresses. This challenge will be difficult to overcome for either candidate—and it’s one that neither plan takes into account yet.

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Why presidents have limited influence over the economy

June 29, 2016

A couple of weeks ago, Donald Trump retweeted an image with nine charts about the US economy that purported to show a central thesis: The Obama presidency has been really bad for America. Student loans have skyrocketed; food stamps, health care costs, and federal debt all rose swiftly; and labor force participation, median family income, and homeownership all fell dramatically.

@realdonaldtrump economy charts

It’s hard to see the labels on either the vertical or horizontal axes, so it’s difficult to discern exactly what each graph is showing. As Philip Bump at the Washington Post has ably shown, many of the graphs cut off halfway through the Obama presidency, cut off the vertical axis, or mix time frames.

But most politicians are wont to take the broader view that the country’s economic picture is tied to the exact time a president is in office. Unfortunately, that thesis is inherently flawed. A president can’t control what is happening in the economy (or the world) prior to his (or possibly her) election to office.

President Obama was elected on November 5, 2008, but wasn’t sworn into office until January 20, 2009. Does that mean we should attribute everything in the economy—good and bad—to him starting in November or January?

A careful look at unemployment rates shows how that approach misses the big picture. A year before Obama was elected (in December 2007, when the recession officially began), the unemployment rate hovered around 5 percent and stood at exactly 5.0 percent in April 2008. In May, the unemployment rate began to tick up steadily, reaching 6.8 percent in November, the month Obama was elected. It continued to climb thereafter, reaching 7.8 percent in January 2009.

The unemployment rate would, of course, continue to climb as the economy soured, ultimately reaching a peak of 10 percent in October 2009 before beginning its slow decline back down to its current rate of 4.7 percent.

Unemployment rate line chart

Data on participation in the Supplementation Nutrition Assistance Program (SNAP), formerly known as food stamps, tell a similar story about the importance of context. Again, participation was edging up prior to the presidential election and continued to rise after Obama took office. Two pieces of context are key.

First, such increases are a primary feature of many safety net programs: they are designed to expand to meet need during economically troubled times.

Second, there was legislation that served to further increase participation: the economic recovery act of 2009 (signed by Obama) intended to increase SNAP participation (and thereby reduce food insecurity during the recession).

Per capita SNAP participation chart

What should politicians take from these examples? Yes, both SNAP participation and the unemployment rate continued to rise during the Obama presidency, but as we’ve seen, he inherited an economy that was already tanking when he took office.

We can also see that both series have declined over the past two years; perhaps not as fast or as low as one might like, but they have declined. Whether those changes are due in part or at all to the president is also a matter of debate. We can certainly argue about whether participation is too high and that it did not start to decline sooner, but that’s a policy argument, not a data argument.

So let’s zoom out a bit and see what we can learn from SNAP over the past 40 years. Here, I’ve placed SNAP participation on the horizontal axis and the unemployment rate on the vertical axis (each point represents a year). I’ve also added a color dimension—red shows years in which a Republican was in the Oval Office and blue shows years in which a Democrat was in the Oval Office.

Unemployment and SNAP trends

If you look carefully, you can see trends in and around presidential terms that you can’t necessarily pin on that president.

Take, for example, the transition between Presidents Ford and Carter. The unemployment rate dropped between 1975 and 1977, while SNAP (then food stamps) participation increased slightly. Once Carter took office in January 1977, the unemployment rate continued to decline for another couple of years. Is that to his credit or to existing trends and policies?

Similarly, after President G.W. Bush took office in January 2001, the unemployment rate started to increase swiftly; but the Internet bubble collapsed starting around 1999, so is it fair to assign blame for the early-2000s recession to Bush?

This is all to make a simple point: The economy is much too complex to simply pin a president’s swearing in as a turning point. That nuance, though important, is not something our presidential candidates typically deem worthy.

As we move into the general election phase and the candidates and parties try to assign blame for this and that to the other, let’s keep in mind that those dates are often arbitrary and have little meaning. Maybe nuance would be a good thing.

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Promote STEM in grade school to fight the wage gap and grow the economy

May 27, 2016

Yesterday, we talked about the pay gap between men and women and its consequences. Many of the policy prescriptions we identified focus on the workplace: raise the minimum wage; change federal family and medical leave laws; invest in affordable, high-quality childcare; and support pay transparency. Yet, there is less discussion about what can be done before people enter the workforce.

Here, we back up a bit and discuss how we can fast-track gender equality at the workplace at an earlier stage through mainstreaming gender-sensitive science, technology, education, and mathematics (STEM) policies to our national education policy.

The good and the bad

Since Title IX of the Education Amendments of 1972, American women have made great progress in educational attainment and achievements that hold across racial and ethnic groups. Compared with men, women between the ages of 25 and 34 “have higher graduation rates and lower high school dropout rates, take more Advanced Placement exams, and earn more advanced degrees than their male counterparts.”

The United States ranks within the top five Organisation for Economic Co-operation and Development and partner countries in the proportion of 25-64 year-old women who have attained tertiary education. And the most recent results on the National Assessment of Education Progress, which tests technology and engineering literacy, shows that girls outperformed boys.  

Despite these gains, women are still underrepresented in STEM fields of study. Looking at earned degrees in science and engineering fields, women are better represented in chemistry, life sciences, and mathematics and less well represented in engineering, computing, and physics.

It doesn’t appear that different levels of interest appear to drive the differences: In middle school, 74 percent of girls express interest in STEM, but when it comes to choosing a college major, just 0.3 percent of high school girls select computer science (admittedly only one portion of the wide-ranging STEM field).

So it appears that something happens between middle school and college that drives girls away from STEM fields. Some studies suggest internalized stereotypes about gender roles, girls’ perception of the need to work harder than men to be taken seriously in a STEM career, and the lack of role models and mentors contribute to girls’ hesitance to pursue STEM fields of study. 

Why STEM matters for the pay gap

According to the Bureau of Labor Statistics, nearly 17 million people were employed in the STEM fields in 2013. That’s more than 1 out of every 10 jobs in the United States. At that same time, people in the STEM field earned an average annual wage of nearly $80,000, nearly twice the US average.

But there is inequality between men and women in these growing and highly paid fields. The Census Bureau reports that in 2011, only 26 percent of STEM workers were women (PDF). Women are also significantly underrepresented in the more technical—and even more highly paid—STEM occupations, such as engineers and data scientists, jobs that account for more than 80 percent of all STEM jobs.

The road ahead

STEM education will play an increasingly important role in US economic competitiveness and the nations’ future economic prosperity. And that prosperity will depend on a workforce that consists of both highly skilled and highly trained men and women.

In 2009, President Obama’s executive order that created the White House Council on Women and Girls officially placed an emphasis on considering the needs of women and girls in federal agency programs and policies. With respect to education, Obama’s Educate to Innovate initiative is geared toward helping improve all students’ performance in science and math education.

More recently, the president’s Computer Science for All initiative, as part of his 2017 budget request, consisted of $4 billion in funding for states and $100 million in direct funding for school districts to give all students the opportunity to learn computer science. Furthermore, as a supporter of the UN’s Planet 50-50 by 2030 gender equality initiative, President Obama recommitted the United States to encourage women and girls to pursue careers in the STEM field.

And 2016 marks the widespread lobbying of gender equality with not only the presidential candidacy of Hillary Clinton, but also the candidacy of four women (out of eight contenders) for the role of UN Secretary-General.

It’s hard to know where the current presidential candidates stand on STEM education. Democrat Clinton has publicly supported the Every Student Succeeds Act, passed in late 2015, but appears to have given fewer details on how she would specifically create a “world-class education for every child in every community.” (It should be noted that the Clinton Global Initiative has supported a variety of STEM education-related projects through its STEM Education Working Group.)

Republican Donald Trump has rejected Common Core, but has also said little specifically on how he would change the nation’s education policy.

Yet, there are a variety of policies that could help address the lagging STEM education system, and close the gap between girls and boys, and women and men.

  • Make equal STEM participation a priority in the national education dialogue. It’s clear that the future workforce will need scientific and technical skills. Policymakers and decisionmakers should prioritize those skills as part of the early education curricula.
  • Educate the educators. Provide robust, dedicated support for effective STEM educator professional development and preparation.
  • Get girls started early. Give young (elementary-aged) girls the tools and resources to explore STEM-related fields and skills. Groups like Girls Who Code and Black Girls Code are working to these ends. 
  • Give girls role models and mentors. Existing stereotypes and negative attitudes toward girls and women in science and technology create barriers to equality and a successful workforce. Girls especially need to see that they can be successful in these fields and groups like Girls Who Code and CodeEd can help to promote girls’ success in technology.
  • Use evidence to support national education policies. Reforming the US education system to incorporate STEM education and knock down walls for girls and women should be based on a solid evidence-base. The Urban Institute, for example, conducts a wide range of research on the education system.

This year, we have history in the making with the candidacy of powerful women to lead two very important governing bodies of the world, the United States and the United Nations.  This year and beyond could be historic for women all around the world, as long as we step it up for gender equality.  

There is an abundance of evidence on the positive impact of gender equality in education and employment on economic growth. Promoting men’s and women’s equal participation in all STEM education fields and gender parity in the workforce, therefore, is not only a matter of inclusive growth, but also a matter of economic prosperity. 

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To meet multifaceted needs in Indian Country, Sanders and Clinton should combine their proposals

April 5, 2016

Hillary Clinton and Bernie Sanders have both recently done something rare for a presidential campaign: they have elevated Native American issues (they’re the only candidates to do so). With a rally at the Navajo Nation, the largest reservation in the United States, Sanders spoke about his plan to address profound economic and infrastructure inequities faced by many Native communities.

In a presidential campaign filled with abstract rhetoric about trade policy, counterterrorism, and 2,000-mile border walls, voters may be surprised at the depth of Indian Country’s challenges. Some are serious, but perhaps not shocking. For example, between 2006 and 2011, the tribal unemployment rate was 16 percent, twice the 8 percent rate among non-Natives in the United States. Tribal poverty rates were also high: 30 percent overall and nearly 40 percent for children.

But other inequities are truly eye-popping. Between 2006 and 2010, more than 1 in 20 tribal households lacked at least one of these basic household features: a flushing toilet, hot and cold running water, or a bathtub or shower. That is a rate 12 times higher than the overall rate. Native households living in tribal areas also have a housing overcrowding rate almost four times as high as the non-Native population overall. Perhaps worse, these disparities persist despite considerable gains in housing conditions since 2000.

Native American poverty rates

Would Sanders’s plan be sufficient to improve housing and economic conditions in Indian Country? Probably not, but interestingly, if his plan were combined with Hillary Clinton’s, together they might. To see why, consider what Sanders’s plan would do:

Senator Sanders’s plan is well suited to improve and expand the housing stock on tribal lands. He proposes fully funding the Indian Housing Block Grant, the primary funding stream for tribal housing, and launching a $1 trillion infrastructure improvement program targeting high unemployment areas in Indian Country and elsewhere.

Because his plan includes a broader set of infrastructure improvements than Clinton’s, including expanding electric networks, it would provide tribes with the infrastructure they need to improve quality of life and bring down housing development costs.

Support for housing and infrastructure are necessary, but Clinton’s proposal would provide other key economic development resources. It would promote youth employment and small-business entrepreneurship in underserved communities.

It would also increase funding for community development financial institutions (CDFIs), which have helped promote entrepreneurship in tribal areas since the 1990s. Native CDFIs have expanded capital and fostered sustainable small businesses in many tribal communities. The number and capacity of Native CDFIs has grown in the past 10 years, but tribal private-sector activity and Native CDFIs were hard hit by the recession. Additional supports for these critical institutions would help tribes regain momentum as they chart their own course for longer-term economic development and growth.

The needs in Indian Country are great, and they deserve multifaceted solutions. While both candidates get a lot right, including their mutual emphasis on improving tribal consultation and self-determination, whichever candidate ends up being the Democratic nominee should consider adopting the strengths of his or her opponent’s platform in order to support our Native communities. 

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What the evidence says about Clinton's Economic Revitalization Initiative

February 18, 2016

Last Friday, Hillary Clinton released the details of her Economic Revitalization Initiative to expand opportunities in “communities left behind.” We asked several of our experts what the evidence says about different elements of her plan.


On jobs programs:

“Clinton’s jobs agenda focuses on the right problem: the weak employment and career outcomes of millions of American youth. The proposals to create jobs and apprenticeships can not only help young people today, but provide valuable work experience for future jobs.

“Two caveats are appropriate.  First, job creation programs vary greatly in quality; while an experimental study of YouthBuild is currently under way, whether the program’s benefits exceed costs remains uncertain. Second, apprenticeships have a particularly strong record; they can help firms and lead to long-term success in rewarding careers, not simply short-term employment. But tax credits alone may not be enough; South Carolina’s Apprenticeship Carolina expanded apprenticeships by combining tax credits with extensive marketing at the state and firm level.”

- Bob Lerman


On local infrastructure:

“Clinton’s economic opportunity agenda builds on an earlier $275 billion infrastructure plan by earmarking $50 billion to traditionally underserved communities.

“The plan echoes decades of research on place-based investments, although conclusions from this work are not always clear cut. Clinton tries to avoid some pitfalls by focusing on transportation investments and quality public services, which can enhance productivity and improve quality of life regardless of whether they promote economic mobility.

“Clinton would also reexamine transportation funding formulas that direct money to all the wrong places. Of course, incentivizing states and localities to pick the right projects may be easier said than done. In a 2010 GAO survey, only one of every five states said that conducting economic analysis of project costs and benefits was important.”

- Tracy Gordon


On jobs for the formerly incarcerated:

“Hillary Clinton’s plan includes a $5 billion investment in job programs for formerly incarcerated individuals, less than half of whom will find stable employment after release and most of whom will earn less than their non-formerly incarcerated counterparts. Given that nearly 30 percent of US adults have a criminal record, will $5 billion be enough to address this large and growing problem? 

“If so, it is critical that Clinton support reentry programs with a proven track record. Comprehensive programs like the Center for Employment Opportunities (whose efforts have proven promising, particularly among high-risk individuals) are more successful at improving outcomes. They focus not just on job readiness skills but also on other barriers to employment that formerly incarcerated individuals face, including housing restrictions, loss of public assistance, substance abuse, and mental health issues.”

- Jennifer Yahner


On credit availability:

“Clinton proposes a few steps to address limitations on access to mortgages that have grown since the recession. The Housing Finance Policy Center’s Credit Availability Index (HCAI) shows that mortgage credit continues to be far tighter than it was pre-bubble. Dodd-Frank and the Consumer Financial Protection Bureau have helped risky products disappear. Nevertheless, the HCAI demonstrates that even without risky products, the market is taking just over half the credit risk it was taking in 2001.

Credit availability

“Over the next 15 years, housing demand will be driven by minorities, as will all growth in homeownership. Income, wealth, and credit gaps between whites and minorities challenge this growth; the alternative is stagnation of the housing market. The government, Fannie, and Freddie can help make homeownership growth possible by giving lenders greater clarity on their responsibilities for loan and servicing quality—which Clinton calls “clarify[ing] the rules of the road.” Clinton would also help responsible homeowners save for a downpayment, support counseling programs to help borrowers become sustainable homeowners, and update underwriting tools—including credit testing tools.”

Ellen Seidman and Laurie Goodman


On small business and economic development:

“Clinton’s plan proposes five steps to help support small businesses and encourage economic development in areas of need. Evidence supports much of this agenda –the New Markets Tax Credit has had generally positive results, and the State Small Business Credit Initiative has led to exciting recent innovations. But the Community Reinvestment Act desperately needs to be modernized, not just enforced, to match today’s lending realities. And Community Development Financial Institutions have yet to figure out how they will fit into the evolving financial landscape—though in an intriguing new partnership, the Opportunity Fund (a CDFI) will work with loan applicants that Lending Club turns down.”

- Brett Theodos

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Nevada and South Carolina are economically different, too

February 16, 2016

As the Democratic and Republican presidential candidates move to Nevada and South Carolina for the next primary contests, pundits will surely note the demographic differences among the first four states. And justifiably so: Iowa’s and New Hampshire’s voting-age populations are overwhelmingly non-Hispanic white (89 percent and 93 percent, respectively) while Nevada has a large Hispanic voting-age population (24 percent) and South Carolina has a large black voting-age population (26 percent). But it’s also worth noting how different these next two states are economically. If Nevada and South Carolina are not on the complete opposite end of the economic spectrum compared with Iowa and New Hampshire, they’re clearly on the other half.

With anger over the economy defining much of the campaign to date, it’s worth noting the economic success of the first two states to vote in 2016. In December 2015, the last month state-level data were available, the unemployment rate was 3.4 percent in Iowa and 3.1 percent in New Hampshire. Those were the sixth- and fourth-lowest state percentages that month. In stark contrast, the unemployment rate was 6.4 percent in Nevada (48th) and 5.5 percent in South Carolina (38th).

Looking at unemployment rates over the past decade is even more telling. During the Great Recession, the unemployment rate peaked at 6.6 percent in both Iowa and New Hampshire. That’s roughly where Nevada is today and where South Carolina was in June 2015. Furthermore, unemployment went as high as 13.6 percent in Nevada and 11.7 percent in South Carolina. Only four other states had higher peak unemployment rates during the depths of the Great Recession: Alabama (11.9 percent), California (12.2 percent), Michigan (14.9 percent), and Oregon (11.9 percent).

Primary states unemployment rate

Nevada and South Carolina are also among the bottom 10 states in average weekly earnings. In December 2015, Nevada ($737) and South Carolina ($748) were both more than $100 below the national average ($871). Neither Iowa ($796) nor New Hampshire ($850) were among the top states in average weekly earnings, but the first two primary states were again relatively better situated than the next two.

Primary states earnings

Nevada and South Carolina are also interesting because of how they got to their current economic situations.

Nevada emerged poorly from the recession in part because the housing market’s boom and bust hit the Silver State harder than any other. At its peak (fourth quarter of 2004), home prices in Nevada were up 34.0 percent compared with the previous year. At the bottom (fourth quarter of 2008), home prices were down 32.0 percent.

And Nevada house prices have still not recovered. As of the third quarter of 2015, prices were down 26.8 percent compared with the first quarter of 2007 (the national housing peak). That was the largest price disparity of any state; the second-largest disparity was in Florida, where house prices were down 21.8 percent compared with the national peak.

Primary states housing prices

South Carolina’s economic trajectory also followed a long trend. The state has a relatively large manufacturing sector, which means in some ways it looks more like Ohio than its southern neighbors Florida and Georgia. Like other manufacturing-dependent states, South Carolina suffered high unemployment before the Great Recession.

Nevada and South Carolina provide an opportunity for the presidential candidates to address deeper economic issues than those found in Iowa and New Hampshire, just as the states are an opportunity to speak to a broader demographic coalition of voters. 

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States of the Presidential Race: Nevada

February 2, 2016

The Nevada Democratic Party caucus is February 20 and the Republican Party caucus is February 23. Nevada’s population is diverse with a relatively large Hispanic population, and its economy has not fully recovered from the recession, particularly the housing crash. Here’s what you need to know about the state hosting the first presidential contest in the West.

Demographics

Nevada’s voting-age population (just under 2.2 million in 2014) is notably diverse, and stands in stark contrast to the overwhelmingly white populations in Iowa and New Hampshire. Among adults ages 18 and older, the majority of Nevadans are non-Hispanic white (55.8 percent). But nearly a quarter (24.0 percent) are Hispanic, a far larger share than among all US voting-age adults (15.3 percent).

Another 12.2 percent of voting-age Nevadans are in the Census category “non-Hispanic other.” Most of this group (roughly the same share as blacks) is self-identified Asian, with most of the remaining people identifying with multiple racial categories. And the state will only grow more diverse with time. Nevada’s white share of the voting-age population will no longer be a majority in 2030 when it falls to 43.8 percent. In that year, the Hispanic share will rise to 30.2 percent, the other share will rise to 16.9 percent, and the black share will rise to 9.1 percent.

Nevada population

Learn more about Nevada’s population with Urban’s Mapping America’s Futures.

Economy

Unemployment rate: 6.4% (December 2015)

Peak unemployment rate during the Great Recession: 13.6% (September-November 2010)

Average weekly earnings, private employment: $737 (December 2015)

House prices compared with one year ago: +12.4% (third quarter 2015)

Nevada rode the housing market’s boom and bust possibly more than any other state. At its peak (fourth quarter of 2004), home prices were up 34.0 percent compared with the previous year. At its nadir (fourth quarter of 2008), home prices were down 32.0 percent. In the third quarter of 2015, Nevada house prices were up 12.4 percent compared with the previous year, but they were still down 26.8 percent compared with the national housing peak (first quarter of 2007).

Housing problems contributed to the state’s economic struggles. During the Great Recession, Nevada’s unemployment rate peaked at 13.6 percent (only Michigan’s rate went higher), and its current rate (6.4 percent) is the third-highest of any state (behind only New Mexico and Alaska).

Nevada housing

Learn more about Nevada’s economy with Urban’s State Economic Monitor.

Health care and the Affordable Care Act (ACA)

Although insurer exits and entrances changed some of the plan options available, many Nevadans shopping for health insurance on the ACA Marketplace found silver level plan options with 2016 premiums only modestly higher than those in 2015. Insurers' 2015 prices were already somewhat higher than the national average and this was likely a factor in the modest growth. As with many other states showing low premium increases in 2016, this reflects, at least in part, generally competitive marketplaces.

Nevada has a lower than average take-up rate of Marketplace coverage by those eligible for tax credits, with 21 percent of those projected to be eligible for tax credits in 2015 enrolling in plans and paying premiums. While the relatively low premium increases suggest that the Nevada Marketplace will again sustain or increase plan selection in 2016, we do not yet have final numbers.

Nevada ACA

Learn more about Nevada and the ACA from Urban’s Health Policy Center.

Higher education

College is a relatively good deal in Nevada. The costs of in-state tuition at a two-year school ($2,805) and four-year school ($6,667) are both below the national averages ($3,435 and $9,410, respectively). However, the state’s higher education funding fell in recent years. From 2007-08 to 2014-15, Nevada’s funding per student declined 30 percent, compared with a 17 percent decline nationally. As a result, Nevada went from 10th to 28th in funding per student during this period.

Nevada tuition

Learn more about Nevada and higher education with Urban’s Financing Public Higher Education dashboard.

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States of the Presidential Race: South Carolina

February 1, 2016

The South Carolina Republican Party primary is February 20 and the Democratic Party primary is February 27. South Carolina’s voting-age population is diverse with a large black population, and its unemployment rate is above the national average. Here’s what you need to know about the state hosting the first primary in the South.

Demographics

South Carolina’s voting-age population (3.7 million in 2014) has by far the largest black population among the four early primary states (Iowa, New Hampshire, and Nevada). More than a quarter (26.2 percent) of South Carolina’s adults age 18 and older are black, compared with just 12.0 percent nationally. The share of South Carolina’s voting-age population who are black will decrease to 24.1 percent in 2030, though. So will the share of non-Hispanic whites, from 66.4 percent to 60.4 percent. That’s because the share of voting-age Hispanics will increase from 4.5 percent in 2014 to 12.0 percent in 2030.

SC demographics

Learn more about South Carolina’s population with Urban’s Mapping America’s Futures.

Economy

Unemployment rate: 5.5% (December 2015)

Peak unemployment rate during the Great Recession: 11.7% (December 2009-January 2010)

Average weekly earnings, private employment: $748 (December 2015)

House prices compared with one year ago: +5.0% (third quarter 2015)

South Carolina’s average weekly earnings in December 2015 were $748. That was lower than the national average ($871) and the eleventh-lowest total among all states in December. Among states in the South Atlantic Census division, South Carolina’s average weekly earnings were second lowest, topping only West Virginia ($723). South Carolina’s average weekly earnings were more similar to states in the Census division immediately to its west: Alabama ($760), Kentucky ($750), Mississippi ($689), and Tennessee ($748).

SC earnings

Learn more about South Carolina’s economy with Urban’s State Economic Monitor.

Higher education

More South Carolinians are enrolling in state colleges. Between 2003 and 2013, enrollment in public institutions increased 24 percent, compared with 17 percent nationally. Those students face relatively high costs; in-state tuition was $11,816 for four-year public schools, compared with $9,410 nationally. But South Carolina really stands out in aid. The state had the highest grant aid per student ($1,888) in the country, more than double the national average ($707). But only 17 percent of that aid was need-based, compared with a national average of 76 percent. Instead, the state has a generous merit program, offering students with strong high school achievement up to $7,500 a year. Meanwhile, South Carolina’s need-based grant program gives some low-income students up to $2,500 a year.

SC higher ed

Learn more about South Carolina and higher education with Urban’s Financing Public Higher Education dashboard.

South Carolina’s prison population

The South Carolina prison population is forecast to decline nearly 7 percent by yearend 2021 to 19,500. Some of this decline is attributable to groundbreaking policy reforms passed in 2010 that targeted nonviolent offenses and technical revocations to prison. Despite these important reforms, more than one in four persons in South Carolina prisons have at least 10 years left to serve before the expiration of their sentence.

Halving drug admissions would only reduce the South Carolina prison population by 8 percent compared with the baseline projection. That is not sufficient to make meaningful and sustainable reductions to the numbers of incarcerated. Many individuals serving long sentences will still be left in prison with substantial time to serve. Cutting length of stay in half for all nonviolent offenses would reduce the South Carolina prison population 20 percent compared with baseline projection, while reducing time in prison for all offenses 50 percent would reduce the South Carolina prison population 38 percent compared with baseline projection.

SC prison population

Learn more about South Carolina and reducing mass incarceration with Urban’s Prison Population Forecaster.

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