Late Off the Blocks: Head Start and the Formative Years

In 1995, Betty Hart, a professor of Human Development at the University of Kansas, and Todd R. Risley, a professor of Psychology at the University of Alaska, published a study examining the difference in language heard by infants of varying socio-economic backgrounds.

The study found that the average low-income child heard just over 600 words per hour, less than half the average total of working class children (1251/hour), and less than one-third that of the average child in a professional family (2153/hour). Using some rudimentary arithmetic, the researchers projected that wealthy kids heard about 30 million words by age 3, while poor kids heard only 10 million.

This divergent led to what the researchers described as an “even-widening gap” between poor and wealthy children, whereby the poor children not only “had smaller vocabularies than did children of the same age in professional families, but they were also adding words more slowly.”

More recent science also supports this conclusion. A 2013 study out of Stanford found that children in different socio-economic groups display dramatic differences in their vocabularies by 18 months.

Thus, it should come as little surprise that Head Start—the pioneering Great Society program designed to improve early learning for poor children—has had limited success in closing the achievement gap. As noted in a column by UC-Berkeley Professor David Kirp this weekend, despite recent improvements to the program, “a 2012 federal evaluation that used gold-standard methodology and concluded that children who participated in Head Start were not more successful in elementary school than others.”

Kirp goes on to argue that one of the essential flaws in Head Start is that it only applies to poor students, in part because branding Head Start as a program for the poor weakens its political power, but more importantly because it concentrates the effects of poverty rather than allowing poor students to interact with and learn from their better educated peers. This interaction has been shown to help poor students narrow the vocabulary/literacy gap with their more well to do contemporaries without hurting the more privileged group.

While socioeconomic mixing in early childhood education can help to mitigate the effects of the “word gap”, we need to do more to narrow/eliminate the gap from emerging in the first place. This means placing a greater emphasis on the formative years 0-3, as well as providing new parents with the skills and tools they need to succeed. Simply put, Head Start is getting out of the proverbial blocks too late for many students to catch up.

Creating children may come naturally to humans, but parenting those children is anything but. And yet despite the incredible importance and difficulty of parenthood, government offers little in the way of supports for soon-to-be or new parents.

One program that has been effective in not only boosting pre-natal care but in improving parenting practices, is Early Head Start (EHS). Launched in 1995, EHS is designed to assist low-income women and families on a variety of childhood development/parenting mattes. A major study of the program in 2005 found that EHS children “performed better than did control children in cognitive and language development, displayed higher emotional engagement of the parent and sustained attention with play objects, and were lower in aggressive behavior. Compared with controls, Early Head Start parents were more emotionally supportive, provided more language and learning stimulation, read to their children more, and spanked less.”

[As previously noted in this space, Early Head Start or similar programs are perfect vehicles for Social Impact Bond financing.]

This conclusion isn’t surprising given that the vast majority of parents want to do well by their kids—they simply need the tools to do so.

Indeed, the fact that many parents do not read to their children as much as would be ideal is not a “choice” in the traditional sense of the term. Not only are many parents unaware of the benefits of frequent verbal interaction with infants, but they also may lack the resources needed to simply have books/newspapers in the home to read.  For instance, parents who are given books and “prescriptions for reading” by their children’s pediatricians have been found to be four times more likely to read and share books with their children.

This fall, New York City will introduce universal pre-K for the first time. It’s a huge step for equity and opportunity for our city’s youth and it is one of many bold ideas that Mayor de Blasio is putting into motion. But even as we navigate the challenges of pre-K, we should be planning for that next great leap forward in early childhood education—to the formative years where the gap first emerges—so that when the starting gun of life goes off, all children can get out of the blocks.

Stamps, Low Prices, and Banking in Modern America

 “I cannot forbear intimating to you the expediency… of facilitating the intercourse between the distant parts of our Country by a due attention to the Post-Office and Post Roads.”

--President George Washington, 1^st Annual Address to Congress, 8 Jan. 1790

In February, Senator Elizabeth Warren (D-MA) unveiled a proposal, based on a white paper issued by the Office of the Inspector General for the United States Postal Service, to resuscitate the flailing Postal Service by partnering with banks and credit unions to offer basic banking services -- bill paying, check cashing, small loans -- for the nearly 70 million Americans who are part of the “unbanked” economy, lacking access to checking or savings accounts.

As Warren noted, the costs imposed on the working poor by lacking access to bank accounts is substantial.

Collectively, these households spent about $89 billion in 2012 on interest and fees for non-bank financial services like payday loans and check cashing, which works out to an average of $2,412 per household. That means the average underserved household spends roughly 10 percent of its annual income on interest and fees -- about the same amount they spend on food.

Many elected officials have taken significant steps to solve the problems facing the unbanked. For instance, as Manhattan Borough President, my boss, Scott Stringer, partnered with banks to promote low-cost checking accounts through the Bank On Manhattan program, saving thousands of New Yorkers hundreds of dollars in check-cashing fees every year.

However, there are few institutions in American life that have the scope and reach of the United States Postal Service. Indeed, from the flagship Farley Post Office on and 8^th Avenue in Manhattan (10001) to the remote outpost in Barrow, Alaska (99723), USPS has been designed, from the founding of the Republic, to “bind the nation together” as one.

The Founding Fathers wouldn’t have believed it, but in 21^st century America, there may be one entity that can compete with the reach of the USPS: Wal-Mart. The world’s largest retailer, with over 10000 stores in 71 countries (over 4000 stores in the U.S.) and over $476 billion in sales in FY 2014, Wal-Mart’s footprint is so large that over 90 percent of Americans live within 15 miles of a store.

So perhaps it comes as no surprise that as same-store sales stall (thanks in no small part to the stagnation in wages growth for the vast majority of Americans), Wal-Mart is dipping its toes into the financial services arena. Last week, the company announced that it would launch a new, low-cost money transfer system today, Thursday, April 24, which will allow customers to transfer up to $900 between stores at a fraction of the cost of competitors Western Union and MoneyGram (whose stocks plunged upon the news).

While many justifiably criticize Wal-Mart’s labor and environmental practices (though in my view in a manner disproportionate to the scrutiny other similar firms face), there is little doubt that Wal-Mart’s sheer size can have a potentially transformative effect on the unbanked. Indeed, just as we now shop for groceries, set our alarms, read our email, watch TV, and pay our bills with our phones, so the banking of the future is likely to take place outside the traditional bank—be it online or at a store like Wal-Mart (a similar, consumer-oriented trend has emerged in medicine with the proliferation of “minute clinics” in pharmacies nationwide).

It will be interesting to see how Wal-Mart’s new service fares. For now, government regulators should take a wait-and-see approach to the initiative, ensuring that consumers are properly informed of the services offered and the fees charged, while also allowing the market to innovate in order to drive down costs.

And if it doesn’t work out, there’s always that post office in Barrow.

Big Data and Mass Transit: From Bikes to Buses

“I have travelled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won’t last out the year.”

-- Editor, Prentiss Hall Books, 1957

Last week, the Globe profiled an effort by 23-year-old entrepreneur Matthew George to use data analytics to provide “pop-up” bus service across many underserved routes in the Cambridge-Boston area. This “pop-up” service—called Bridj—is designed to use data about “where people live, work, and play” to predict where non-stop service is needed and adjust schedules based on time of day/day of week, etc.

George’s introduction of disruptive analytics to the metro-Boston transit network is long overdue and I’m anxious to see how his system works (and to try it myself come July 4th weekend). But, as noted by MIT Professor Nigel Wilson, George’s service (which is expected to launch at a cost of $5-8 pre trip) has the potential to siphon riders from the MBTA. Indeed, while the Bridj homepage champions “Better Transit. For All,” it is not yet clear whether the business model can rely solely on routes not directly served by the T.

In a normal setting, competition would be an unquestionable good—with the better product/price/service winning out over time. However, public transit is a unique animal—a deeply subsidized public good that must cater to the needs of very low-income city dwellers (among others).

To his credit, George seems quite cognizant of this fact and has indicated that he hopes to reduce fares to a price approaching a single-ride T-pass ($2-2.50). However, it is ultimately not the job of entrepreneurs like George to worry about how their innovations might affect competitors like the MBTA.

Instead, as I briefly noted last year, what the MBTA and other transit agencies from New York City’s MTA to the smallest regional network in Berkshire County need to do, is to get in the data analytics game themselves. In Boston, this effort should include investing in smaller vans that can operate at lower cost than articulated buses, depending on demand, GPS tracking to allow riders to plan their trips, and demand-responsive transport during late nights and weekends. In the spirit of George’s “pop-up” service, demand responsive transport covers a fixed service area but without fixed routes, allowing it to cater to fluctuations in ridership.

This type of planning should not be limited to buses, but should instead be used to integrate a municipal transit network’s bicycles as well. In NYC, CitiBike recently released a trove of data charting hundreds of thousands of rides and, as shown in the graph below from the NYU Rudin Center for Transportation Policy and Management, there is a slight, but meaningful correlation between subway disruptions and use of CitiBike along those routes.

Dubbed “reactionary biking” by the Rudin Center, this pattern should lead to partnerships between the MTA and CitiBike. For instance, when there is a planned service outage—especially a long-term outage, like the 5-week closure of the G train’s Greenpoint Tube planned for this summer—MTA should not only provide replacement bus service, but also work with CitiBike to extend bike share to affected communities. Similarly, the two systems should share data on ridership so that CitiBike can do a better job of balancing stations near transit hubs which, at certain times of the day, are overrun with passengers (most notably on the Lexington Line (456)).

In 2012, Peter Sondergaard of the Gartner Group declared, “Information is the oil of the 21st century, and analytics is the combustion engine.”

If Sondergaard is right, public transit systems cannot sit back in the horse and buggy age while private companies like Bridj act like the Maseratis of the data world. They need to get in the game themselves and use “big data” to increase efficiency and improve service for the millions of Americans who rely on buses, trains, trams, and bike share.

What it Means to be #1: Happiness and Social Policy

“Gross National Happiness is more important than Gross Domestic Product.”

-- His Majesty Jigme Singye Wangchuck of Bhutan

Last week, Nicholas Kristof of the Times noted that between 1975 and 2006, “99 percent of the French population actually enjoyed more gains in that period than 99 percent of the American population.” In other words, if you exclude the top 1 percent, the average French citizen did better than the average American.

Nevertheless, on one of the more common metrics used to determine the prosperity and halth of a nation—the Gross Domestic Product (GDP)—the U.S. actually came out on top during the same period, as the American economy significantly outperformed the French.

So who’s “#1”? Before you start chanting, “U-S-A! U-S-A!” (too late?), let’s take a closer look at just what we’re trying to measure.

In recent years, researchers have prodded cities and states to step away from the traditional measures of prosperity and embrace tools to measure overall “happiness”. In December 2013, the National Academy of Sciences issued a report calling on governments to ask citizens a series of questions related to their happiness and to use the results to shape social policy priorities and prescriptions.

This type of survey—which began in the small nation of Bhutan in the early 1970s—has spread to other nations, like the U.K., France, and Canada, all the way down to the local level, as in Somerville, Massachusetts.

Indeed, several U.S. cities are now experimenting with happiness or wellbeing measures. Santa Monica, California, which defines “wellbeing” as, “[p]ersonal satisfaction with life, influenced by social connections, economic stability, personal safety, physical surroundings, fulfilling employment, civic engagement, and health,” recently won a Bloomberg Philanthropies award for its efforts to measure wellbeing and respond accordingly.

In New York, Megan Golden (NYU) and Liana Downey (Liana Downey & Associates) wrote that the de Blasio Administration should pilot a happiness survey to determine “whether some groups are struggling more than others, where problems are concentrated, and what conditions affect New Yorkers’ happiness the most.” This pilot would borrow from the Centers for Disease Control and Prevention, which already surveys Americans every four years about health and life satisfaction, as well as “Measure of America”, a project of the Social Science Research Council.

Of course, measuring happiness is easier said than done. As with any broad survey, getting a representative sample is a challenge, particularly in a City like New York, where many are often wary to respond to formal government surveys (see: New York’s experience with the 2010 Census). Furthermore, since most people filling out the survey have different definitions of happiness, questions that seek to gauge the subjective mindset of any population may be inherently suspect.

An even more fundamental question exists, however. And that is whether happiness, however defined, should be the goal of social policy in the first place. As David Brooks wrote this week, “Happiness wants you to think about maximizing your benefits. Difficulty and suffering sends you on a different course.”

No, Brooks is not advocating for a political system that promotes difficulty and suffering. But he’s also cautioning against viewing certain types of suffering as in need of eradication. To put it in concrete terms, suffering that flows from hunger, disease, violence, or neglect carries no short or long term benefit (much to the contrary), whereas the pangs that come with failure, the loss of a loved one, or can make us fuller people—changed souls, rather than shattered ones.

Ultimately, since that the unique number of paths to happiness is roughly as numerous as the number of people alive, the Framers probably got this one right—namely, that the government’s role is to ensure the foundational elements necessary for the pursuit of happiness (food, shelter, health care, employment), leaving to the individual citizen to decide how to chart his own course toward that seemingly universal goal.

Silence Over Sacrifice: Generational (In)Equity in American Politics

“The ultimate test of man’s conscience may be his willingness to sacrifice something today for future generations whose words of thanks will not be heard.”

-- Gaylord Nelson, Senator from Wisconsin (1916-2005)

In February, BSB wrote that one of the “First Principles” of American Politics should be to “assume that present sacrifice for future benefit is the appropriate path,” and that, “The burden of proof should be on those who would take today and pay tomorrow, not the other way around.”

All too often, however, whether the topic is wages, housing, pensions, or the fight to combat the catastrophic effects of climate change, we are quick to sell the next generation short to avoid sacrificing our own benefits/lifestyle.

As Joanna Weiss highlighted in the Boston Globe last week, 26 states currently provide a modified minimum wage for teens, ranging from offering teens 85 percent of the minimum wage and allowing substantially lower wages for short-term work to exempting students from the minimum wage altogether. Weiss concluded, “Who’s to say, based on age, that their work is less valuable than anybody else’s?”

In New York State, teens make the same minimum wage. However, the State recently enacted a tax credit that subsidizes the wages of 16-20 year olds, making the effective wage of a teenager lower (from the employer’s perspective).

As important as wages are to success in New York, perhaps nothing is more closely tied to opportunity than housing. The dreams of youth coming to Gotham—whether from small, rural towns in Massachusetts or metropolises from across the sea—invariably run into the reality of New York’s affordable housing crunch.

Last week, Harry Siegel of the New York Daily News once again noted what many economists across the political spectrum have said for years about New York’s housing market, “the more subsidized housing we have, the more outrageously expensive it gets for everyone not lucky enough to have it.”

And as you would expect given that housing, like wages, is a zero-sum game, older people are vastly overrepresented among subsidized housing units. As shown in the table below from the Furman Center’s 2012 Annual Report on the State of NYC’s Rent-Stabilized Housing, people over the age of 65 are much more likely to reside in rent-regulated, public, and other subsidized housing than the young.

Most acknowledge that the only way out of this conundrum—save for an unwinding of NYC’s rent-stabilized housing program (disclosure: I live in a rent-stabilized unit on Manhattan’s Upper East Side)—is to build more housing. And the only way to do that in New York City is to build up.

However, as Siegel adroitly points out, this solution once again pits the generations against one another, creating, “a fight between those of us already here, protecting what we have, and the needs of those who might join us — between the city’s present and its future.”

A third area where this type of generational clash frequently takes place is government pensions. In 2012, New York recently enacted Tier VI—a new benefit tier for employees entering City/State service after April 1, 2013. Tier VI asks future employees to pay more for fewer benefits than Tier V employees (disclosure: I am a “Tier IV” member), continuing a long tradition of “pension reform” that solves present problems by borrowing from future employees. As the Fiscal Policy Institute found, the average Tier VI employee will receive a pension with a value that is 39.8 percent lower than currently provided under Tier 5.

While some insist that “reliance” on benefits should prevent them from being impaired in any way, that ideological rigidity necessarily assumes that the benefits of future workers/veterans should be sacrificed to maintain the status quo.

Some interest groups have recognized the generational tension in politics and sought a path forward. Common Sense Action and the Bipartisan Policy Center have created an Agenda for Generational Equity (AGE), which seeks to protect today’s seniors and future generations through entitlement reform and investments in education and development that improve mobility and opportunity.

However, while AGE is an ambitious and well-meaning effort, it falls short by failing to use the language of sacrifice, of tradeoffs, in rendering its judgment. Indeed, the AGE appears to want readers to have their cake and eat it to—implying that there is a way forward in which all will be healthier, happier, wealthier, and without any additional burden (tax or otherwise).

It is yet another example of how sacrifice has become a verboten term in American politics. How this came to pass is something of a mystery, particularly given how we have historically revered sacrifice (whether of life, liberty, or treasure) as one of the pinnacles of a democratic society.

On the other hand, concerns about generational equity are nothing new. Nearly 30 years ago, Steven Greenhouse of the New York Times wrote that the very term “Generational equity” was slowly creeping into the political discourse as economists, “assert that the generation in power is blithely passing the bill to its successors.”

No one is blameless in this story—from the politicians who are too scared to level with constituents, to the constituents themselves, who allow politicians to infantilize them by reveling in the fiction that solving problems is painless and that merely saying that nothing is more important than our children is more important than actually backing up that sentiment through collective sacrifice.

In the end, sacrifice shouldn’t be a dirty word in American politics; it should be something to which we all aspire.

Climate and Community: Solarize, Mosaic, and Economies of Scale

“Economies of scale are a good thing. If we didn’t have them, we’d still be living in tents and eating buffalo.”

-- Jamie Dimon, Chairman and CEO, J.P. Morgan, 2010

This weekend, the Globe highlighted Solarize, a pilot program that encourages development of residential and business solar arrays by taking advantage of economies of scale to drive down cost.

Since Beverly High School installed solar panels in 1981 (see image), the North Shore has been at the cutting edge of renewable energy installation. It comes as no surprise, then, that Round 2 of Solarize includes the North Shore communities of Salem and Swampscott, which together have signed up so many people that they have reached “Tier 4” (of 5) status, meaning additional savings for participants in the program and an even greater snowball effect to encourage neighbors to join the movement. Other cities and towns across the Commonwealth are also taking part in the current round, from Andover to Egremont.

In 2011 and 2012, Solarize Mass led over 900 residents and business owners in 21 communities to install over 5.6 megawatts of solar electricity. The 10 cities and towns that participated in Round 1 of 2013—including my beloved Lee, Mass.—added another 3800 kilowatt hours of solar capacity.

This type of community-oriented green energy strategy has emerged with force in recent years. In particular, Mosaic, an investment platform that uses a crowd-funding model to finance solar farms across the country, has showcased the incredible potential of leveraging the pent-up demand for renewable power by bringing individuals together.

From the installation of 47 kWh of solar through Oakland, California’s Youth Employment Partnership (6.38 percent yield) to powering New Jersey’s Wildwood Convention Center (4.5 percent yield) and creating a solar roof on a school in Connecticut (5.5 percent yield), Mosaic has already provided a mechanism for thousands of Americans to directly invest millions of dollars in solar projects in their backyards and across the country.

The uptick in community-based economies of scale is not only spurring green energy (and in turn, reducing carbon emissions), it is also being used by Google to promote high-speed fiber Internet connectivity in cities across the country. Google Fiber expands to “fiberhoods” if/when communities secure enough signups to make the construction of the infrastructure economically viable.

Of course, this model has its pitfalls, particularly when it comes to ensuring access to new technologies across the income spectrum. As Newsweek noted last month, when Kansas City’s fiberhoods were unveiled in 2012, “the online map of fiber-hoods was largely divided by lines like Troost Avenue,” a street that for generations has separated affluent white families to the west and poor families of color to the east.

This outcome was not for lack of trying on Google’s part. As Newsweek stated, the company offered lower-speed broadband service on a monthly payment plan, partnered with community organizations on outreach, and hired people to canvass poor neighborhoods, sometimes with free ice cream. And yet, the divide remained.

This fact should not dissuade us from using community-based economies of scale to nudge neighborhoods toward taking up innovative technology. Rather, it simply highlights the fact that the State must do even more to subsidize the use of green tech in poor communities, many of whom stand to benefit disproportionately from its effects (such as reduced emissions).

In Massachusetts, this means expanding Solarize from the relatively wealthy communities that it has targeted thus far, to communities across the income spectrum—from Lawrence and Lynn to Springfield and Southbridge. It also means changing regulations to allow individual investors to pool resources through platforms like Mosaic.

While Congress dithers on climate policy (and tries to block the President’s historic regulatory efforts related to power plant emissions), communities across the country are hungry to support grassroots efforts to rid America of dirty energy and do their part to make the U.S. a leader in the green tech economy of the 21^st century.