Rebuilding America: An Investment in Social Capital

With the advent of modern transportation, community certainly extends beyond the boundaries of one’s home, so it shouldn’t be a great surprise that the percentage of adults who say they spend a social evening with a neighbor at least several times a week fell to 19 percent in 2016 from 30 percent in 1974.

No longer is this country based on loving they neighbor, but perhaps neighborliness is a lost art in need of a renaissance.

That’s the gist of a new report just released by the Joint Economic Committee on Capitol Hill. “What We Do Together: The State of Associational Life in America,” is part of the Social Capital Project, run by Sen. Mike Lee of Utah.

Its stated purpose?

The Social Capital Project is a multi-year research effort that will investigate the evolving nature, quality, and importance of our associational life. ‘Associational life’ is our shorthand for the web of social relationships through which we pursue joint endeavors—namely, our families, our communities, our workplaces, and our religious congregations. These institutions are critical to forming our character and capacities, providing us with meaning and purpose, and for addressing the many challenges we face.

The goal of the project is to better understand why the health of our associational life feels so compromised, what consequences have followed from changes in the middle social layers of our society, why some communities have more robust civil society than others, and what can be done — or can stop being done — to improve the health of our social capital. Through a series of reports and hearings, it will study the state of the relationships that weave together the social fabric enabling our country — our laws, our institutions, our markets, and our democracy — to function so well in the first place.

The first report from the project is a bit dispiriting. While Americans are much more materially better off, the social fabric is frayed, fractured, and seemingly coming apart. At risk is pretty much the social norms that allow a middle class and the sustainability of a “free, prosperous, democratic, and pluralistic country.”

Some of the findings in the report reveal that social capital is dropping because Americans are spending less time socializing with neighbors, declining to vote, and lacking in trust of fellow Americans (from 46 percent in 1972, the report to 31 percent in 2016, according to the General Social Survey).

Political columnist Ramesh Ponnuru points out some exceptions raised in the report.

Rates of volunteering have increased. Some kinds of political engagement have also risen: The percentage of the population that reports having tried to influence someone else’s vote has gone up over the last few decades. The overall story, though, is one of fewer and weaker interpersonal connections among Americans.

Social scientists Charles Murray, who testified to the Joint Economic Committee this week, described the impact of a decline in social capital: fewer people are getting married and fewer men are working. He said that the government can try to find policies to encourage behavioral changes, but the declines are symptoms of a larger, more visceral problem.

If I had to pick one theme … it is the many ways in which people (behave) impulsively — throwing away real opportunities — and unrealistically — possessing great ambitions but oblivious to the steps required to get from point A to point B to point C to point D in life.

In other words, the desire for instant gratification has its consequences. Another problem he cited is a general self-destruction created by the squandering of an ample number of opportunities to get ahead.

The solution?

It comes down to the age-old problem of getting people, especially young people, not to do things that are attractive in the short term but disastrous in the long term and, conversely, to do things that aren’t fun right now but that will open up rewards later in life. The problem is not confined to any socioeconomic class. The mental disorder known as adolescence afflicts rich and poor alike. And adolescence can extend a long time after people have left their teens. The most common way that the fortunate among us manage to get our priorities straight — or at least not irretrievably screw them up — is by being cocooned in the institutions that are the primary resources for generating social capital: a family consisting of married parents and active membership in a faith tradition.

I didn’t choose my phrasing lightly. I am not implying that single parents are incapable of filling this function — millions of them are striving heroically to do so — nor that children cannot grow up successfully if they don’t go to church. With regard to families, I am making an empirical statement: As a matter of statistical tendencies, biological children of married parents do much better on a wide variety of important life outcomes than children growing up in any other family structure, even after controlling for income, parental education, and ethnicity. With regard to religion, I am making an assertion about a resource that can lead people, adolescents and adults alike, to do the right thing even when the enticements to do the wrong thing are strong: a belief that God commands them to do the right thing. I am also invoking religion as a community of faith … For its active members, a church is far more than a place that they to worship once a week. It is a form of community that socializes the children growing up in it in all sorts of informal ways, just as a family socializes children.

Murray said his ideas are not meant to generate policy recommendations, but more a warning.

I would argue that it is not a matter of ideology but empiricism to conclude that unless the traditional family and traditional communities of faith make a comeback, the declines in social capital that are already causing so much deterioration in our civic culture will continue and the problems will worsen. The solutions are unlikely to be political but cultural. We need a cultural Great Awakening akin to past religious Great Awakenings.

Will the social capital project be able to trigger a “Great Awakening”? Perhaps not, but a disconnect in society will most certainly cause bigger problems that will ultimately cause a larger breakdown that will rely on homegrown gumption to fix.

As Ponnuru explains, a return to the aspirational nature of social capital may require a “rediscovery of Tocqueville.”

Sentiments and ideas renew themselves, the heart is enlarged, and the human mind is developed only by the reciprocal action of men upon one another. … In order that men remain civilized or become so, the art of associating must be developed and perfected among them.”

A Better Measure of America’s Poverty Rate

Sen. Mike Lee is proposing legislation that, if instituted correctly, could more accurately reflect America’s poverty rate to better determine the impact of welfare assistance and whether it is doing the job it is supposed to do.

Lee’s proposal is called the Poverty Measurement Improvement Act. The point of it is just as the title explains: to more accurately measure household incomes to see if poverty is as bad as the data indicate.

As Lee, R-Utah, explains:

This bill would improve the data available to lawmakers by authorizing a new Census Bureau survey that would more accurately calculate income by including wages and federal means-tested benefits. This information would then be linked with individual records from the IRS and other federal agencies that administer means-tested benefit programs.

The Census Bureau calculates the official poverty rate, but the results are based on families’ pre-tax, cash income, and ignores assistance like Supplemental Nutrition Assistance Programs (SNAP) and tax credits for working families.  The result is that the Census counts the people who are being helped by these programs as still living in poverty when in fact they may be living in much better conditions.

Poverty has been a persistent and seemingly intractable problem for decades. President Lyndon Johnson launched the Great Society in 1964 with the goal of eradicating poverty. But in 1966, the poverty rate was 14.7 percent while in 2012, it was 15 percent. The lowest the poverty rate ever reached was during the Nixon administration, when it dove to 11.1 percent (1973).

In 2012, the amount spent on poverty programs was 20 times higher than when the anti-poverty programs were instituted in 1964, and during that time assistance has increased from $160 to more than $2,000 per person in real dollars.

As an aside, the number of children being raised by a single mother rose from 8 percent in 1964 to 23.7 percent in 2013 while the number of working-age men (25-54) participating in the labor force has dropped by shocking amounts.

As demographer Nick Eberstadt tells it, 7 million working-age men are currently not seeking work:

In fact, if work rates for men were only as high today as in 1965—a time when we enjoyed true “full employment”—nearly 10 million more men would have paying jobs today. Think of the difference that would make to our country.

In other words, what used to be a “nuclear household” has seemingly been nuked.  Lee noted the impact of government programs that discourage one of the most important relationships individuals have and society benefits from: families.

The core problem with our welfare system today isn’t just its bloated annual budget, but its tendency to undermine the two most dependable routes out of poverty: marriage and work.

But we can’t improve these programs until we have better data on how they are affecting working families. The Poverty Measurement Improvement Act will do just that.

Poverty researchers on both sides of the political aisle agree that government assistance helps pull people out of poverty. Accurately measuring the role of public assistance will help determine where opportunities lie to increase workforce participation, encourage stronger households, and inform the role of programs like the Earned Income Tax Credit that are used to get people into the workforce. That’s a goal to encourage, and measuring the data correctly seems like an easy starting point.

The Insanity of Occupational Licensing — $1,537 for a Shoe Shine Permit

TPOH has long been on the case of the red tape created by occupational licensing (and one of our heroes is Melony Armstrong, who took on her state’s rules and won). It seems to be a constant uphill battle, but two senators are hoping to create a model for states to follow to reduce the obstacles entrepreneurs face as a result of occupational licensing rules.

Sen. Ben Sasse, R-Neb., who has made it a mission to eliminate unnecessary occupational licensing laws — one of the few areas where the states really exceed the federal government when it comes to regulatory barriers — has been working with Sen. Mike Lee, R-Utah, on legislation to address one small area of occupational licensing — dealing with rules in Washington, D.C., where the federal government has some legislative oversight.

Sasse and Lee’s ALLOW Act would reduce occupational licensing rules in the nation’s capital to “only to those circumstances in which it is the least restrictive means of protecting the public health, safety or welfare,” reports The Weekly Standard.

The senators appear motivated in part by stories like the one told by an American University freshman who decided to go shine some shoes to help pay for expenses associated with attending one of America’s elite universities.

Before heading down to the street, the student said he double-checked online about vendor rules in D.C., and was shocked to learn that he would have to pay $1,537 in permitting and licensing fees, not to mention other arbitrary compliance laws, which included 83 pages of rules for sidewalk shoe shines. The student noted that if he didn’t get the fees — and wait six months for the permit!! — he could be fined $2,000.

Not much in the way of encouraging work.

The states would have to follow with their own revisions, but as Melony Armstrong has noted, her fight in Mississippi resulted in paperwork and permitting reductions not only in her state, but in Alabama, Arkansas, Texas, and Utah.

Read more about Sens. Sasse and Lee’s occupational licensing reduction act.