The Single-Parent Household Epidemic

The social science experts tell us there are three simple rules to live by to reach the middle class: 1) Graduate at a minimum from high school. 2) Get a full-time job. 3) Wait until you are at least 21 to get married and have kids.

This last rule deserves your attention because parents are increasingly breaking it, tragically setting their children up to fail.

Out of wedlock birth rates are spiraling out of control. To show you just how much the country has changed during my lifetime, in 1965 the birth rate for unmarried women was under 8%. By 2015, the rate had risen to over 40%.

The children of out of wedlock births are frequently raised in poor, single-parent households, which puts them at a major disadvantage in life. We are talking about millions of kids being negatively impacted here. 31% of children today are not living in two-parent households, most of whom are being raised by single mothers. The poverty rate for single-mother families in 2016 was over 35%, five times the rate of married-couple families.

What happens to those born out of wedlock and raised by single mothers? Simply put, a vicious cycle of generational poverty where the American Dream gets further and further out of reach.

The research shows that those born out of wedlock are at a greatly increased risk of health, developmental, emotional and behavioral issues at all stages of life.

These issues contribute to poorer school performance, increased odds of drug and alcohol usage and a greater propensity to engage in violent or criminal behavior.

The end result is that it is very hard for such children to follow the three simple rules to enter the middle class – they get stuck in the same trap as their parents.

Consider the plight of kids born out of wedlock:

  • The odds of dropping out of high school rather than graduating increase.

  • It may be harder to attain a job — even if graduating from high school — if such individuals made poor grades, had substance abuse issues and/or a criminal record.

  • As adults, such individuals may be deemed less desirable or uncommitted partners, due to lack of employment, or any of the other issues mentioned; therefore, it becomes more likely that they too will have children without getting married.

In the end then, the next generation will have to deal with the same problems over again.

The proof is in the pudding: Children living in single-parent homes are 50 percent more likely to experience poverty as adults relative to children from intact married homes.

The importance of the nuclear family just cannot be emphasized enough.

One thing I have yet to mention is that if you are a struggling single mother or otherwise finding it difficult to make ends meet, you are likely to turn to welfare programs for support.

There is a cost to these benefits. Dependency on the state hurts personal growth by making one dependent, and often saps individuals of their morale and dignity.

FDR put it best in his 1935 State of the Union Address during the Great Depression – an address it is hard to imagine any prominent Democrat delivering today:

Continued dependence upon relief induces a spiritual disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.

This is why the “workfare” reform passed in the ‘90s – and gutted during the Obama years – which tied government assistance to employment, was so positive.

It might shock you to know that our government actually perpetuates the vicious cycle I have described by incentivizing the formation of single-parent households through the way it structures benefit programs.

Did you know that there are marriage penalties built into means-tested welfare programs, from food stamps and public housing, to day care and Temporary Assistance for Needy Families?

As one study explains it:

The current welfare system may be conceptualized best as a system which offers each single mother … a “paycheck.”… She will continue to receive her “paycheck” as long as she fulfills two conditions: (1) she must not work; and (2) she must not marry an employed male…. [Welfare] has converted the low-income working husband from a necessary breadwinner into a net financial handicap. It has transformed marriage from a legal institution designed to protect and nurture children into an institution that financially penalizes nearly all low-income parents who enter into it. [i]

It is simply immoral that our government would condemn future generations to hardship and poverty through these programs.

It is an American Nightmare to think that every day children are being born with the odds stacked against them.

If we want to fix this issue as a society, we need to rethink our priorities.

We need to change our culture to one that emphasizes the nuclear family, and responsible parenting.

We need to get government out of the business of discouraging nuclear family formation.

The American Dream must be in reach for every child.


[i] See The Heritage Foundation’s study “Why Expanding Welfare Will Not Help the Poor.”

Celebrating America’s Spirit of Generosity

Generosity has always been an essential part of what it means to be an American.

From banking billionaires to barkeeps, we have viewed material success as a means to do good for our families and communities, rather than an end.

Thanks to democratic capitalism — where businesses go belly-up if they don’t create goods and services that people want at a price they can afford, and jobs that fulfill and enrich — the process of creating that wealth does tremendous good by itself.

Too often we ignore the wonder of this free enterprise system.

It is this system that enabled Americans to give an estimated $390bn to U.S. charities in 2016. To put that number in perspective, last year our country gave more money to philanthropic causes than the entire gross domestic product of Austria. It goes without saying that we are the most charitable people in the world.

A large portion of this giving was and is funded directly by wealthy individuals and indirectly by institutions they have founded and supported. According to the Almanac of American Philanthropy, the so-called “one percent” make more than one-third of all donations. The majority of the largest donors in the world are based in the Americas. Of these donors, almost three-quarters are, largely self-made, Americans; they each donate around $30 million over their lives.

Our entrepreneurial spirit goes hand-in-hand with our desire to help others. Rich and poor alike believe this, as American households give several thousand dollars to charity each year on average.

We are following in the footsteps of a long line of Americans.

When he wasn’t leading our nation as a Founding Father and statesman, inventing items like lightning rods and bifocals, or publishing newspapers, Benjamin Franklin used his success to build Philadelphia’s civil society through developing a number of critical institutions. These include among others: The nation’s first public library; Pennsylvania’s first volunteer fire brigade; the Academy of Philadelphia, now known as the University of Pennsylvania; and the nation’s first hospital, which focused on serving the poor and sick.

The great 19th century industrialist Andrew Carnegie was equally ambitious. Among other things, he: Created 2,811 lending libraries worldwide; founded one of the world’s leading research universities in the Carnegie Technical Schools, now known as Carnegie Mellon University; underwrote one of the nation’s first and still largest grantmaking foundations in the Carnegie Corporation; and established numerous other charitable organizations. Peers like John D. Rockefeller and J.P. Morgan picked up his mantle.

Today, several American billionaires like Bill Gates have pledged to give away half of their wealth to philanthropic causes. They are joined by many business successes, from Silicon Valley tech titans to energy tycoons, who help fund projects in areas like education, health and culture.

Recently we were reminded of the generosity of America’s business community, which mobilized to donate millions of dollars to the recovery efforts in the wake of Hurricanes Harvey and Irma.

In spite of this record, in conversations with folks about causes near and dear to my heart like The Cloisters on the Platte and Opportunity Education, I have heard our philanthropic work described as “unusual.”

Why is there this perception that it is rare for those who have done well to support charitable causes?

Could it be because “the rich” are often depicted in popular culture as greedy, old, and sometimes overweight fat cats chomping on cigars? Is the corrupt and miserly “Old Man Potter” from It’s a Wonderful Life how Americans see our captains of industry?

If so, it is a real shame. We have always been a country that celebrates strivers and doers. We have never sought to pull people down for success, but to lift others up and open opportunities so that they too can achieve it. Envy is not in our DNA. Ambition is.

Speaking for myself, one way of expressing my appreciation for the opportunities this nation has provided has been by using the wealth our enterprises have created to advance worthy causes.

The purpose is not to put names on buildings, but to support initiatives in areas like civil society and education that will allow us to continue to thrive as a vibrant and dynamic country for decades to come.

While there are certainly greedy wealthy people just as there are greedy non-wealthy people, in my life, I have found that almost all Americans feel the same way I do about being generous with their time and money.

We are generous because we are thankful, and because we wish to see American remain the freest, most prosperous land on Earth for our children and grandchildren.

This spirit of generosity should unite us all. It is one of the many things that makes us an exceptional nation.

Why I’m Against Unions At Businesses I Create

It is the Free Enterprise system that has made this country an economically wealthy and powerful nation and I enjoy participating in it.  And I like starting businesses that solve problems and create jobs.  In fact, I love it.

When a business succeeds, it’s fantastic; fantastic for the people working in the business, and fantastic for consumers who benefit from a new product or service.

But, there’s a tough reality to starting businesses:  more of them fail than succeed.  In fact, most businesses fail.  They fail because it’s hard to build a successful company.  There are always powerful forces working against you – e.g., competition, regulation, access to capital, poor execution, poor timing, bad luck.  Sometimes it turns out that your idea just won’t work.

And yet, here’s the thing:  trying to solve all the problems that a business faces is what’s fun for me, particularly when I’m doing it shoulder-to-shoulder with people who share my passion for building a successful enterprise.

Which brings me to the topic of unions.

There can be no doubt that historically, unions served an important purpose, balancing power between ownership and labor.  Indeed, the early days of capitalism were a bumpy ride, and the relationship between ownership and labor was often out of whack in the late 19th and early 20th centuries.  And yet, 2017 looks a lot different than 1917.

But, I’m neither a historian nor an economist.  I’m an entrepreneur, so I’m not going to wax on about the historical imperative of unions and why they do or don’t serve a role in our modern economy.  I will, however, tell you what I know, and I know about starting and growing businesses.  I know that businesses constantly face a barrage of obstacles to survival – never mind success – and, in the face of that, everyone at the company needs to be pulling together or that company won’t make it.  I know that keeping a company growing and thriving requires focus and tireless effort by everyone.  Indeed, in my opinion, the essential esprit de corps that every successful company needs can’t exist when employees and ownership see themselves as being on opposite ends of a seesaw.  Everyone at a company – owners and employees alike – need to be sitting on the same end of the seesaw because the world is sitting on the other end.

I believe unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed.  And that corrosive dynamic makes no sense in my mind where an entrepreneur is staking his capital on a business that is providing jobs and promoting innovation.

That’s why the type of company that interests me is one where ownership and the employees are truly in it together, without interference from a third-party union that has its own agenda and priorities.  I’m not interested in any agenda at any company I start, other than working together to deliver something exceptional to consumers and doing it as everyone pulls shoulder-to-shoulder tackling whatever the marketplace throws at us.

It is my observation that unions exert efforts that tend to destroy the Free Enterprise system.

Andrew Jackson Higgins Memorial

Saturday, May 27, 2017, my wife, Marlene, was honored by the Columbus Chamber of Commerce for her support of the Utah Beach Higgins Memorial located at the Utah Beach Museum in Sainte-Marie-du-Mont, France.  The memorial has been placed in the spot where a gap was blown open by U.S. Army Rangers on the morning of June 6, 1944, also known as D-Day.  This memorial includes statues of WWII soldiers, a replica of the Higgins Boat and Columbus Nebraska’s very own Andrew Jackson Higgins.

Mr. Higgins was born in Columbus, Nebraska, attended schools in Omaha and served in the Nebraska National Guard before relocating to New Orleans where he founded Higgins Industries.  His vision and creation of a shallow-draft ship, the Higgins Boat, changed the course of history.  The vessels were used to transport men and equipment safely to beaches during amphibious landings.  General Dwight D. Eisenhower called Higgins, “The man who won the war for us.”  He went on to say, “If Higgins had not designed and built those LCVPs (Landing Craft, Vehicle, Personnel), we never could have landed over an open beach.  The whole strategy of the war would have been different.”

Our sincerest thanks to the Columbus Chamber of Commerce and it is our honor to remember our veterans who gave the ultimate sacrifice for our freedom.

A Special Day for Me at Ave Maria School of Law

Recently, I was proud to receive an honorary Doctor of Laws degree from Ave Maria School of Law in Florida. I’m grateful to Tom Monaghan, Jeff Randolph, and Kevin Cieply for including me in this special day for the graduates and their families.

As a Catholic, and someone for whom having a spiritual relationship with God is deeply important, I have great respect for Ave Maria’s focus on teaching high legal, ethical, and moral standards that integrate the Catholic intellectual tradition. I believe firmly that the Catholic value system, and the Judeo-Christian value system of which it is a part, provide the bedrock on which sound ethical and moral judgments rest. This has never been more important than today, when the pace of life is fast and the challenges complex.

2017 Kings College Keynote Address

I was honored that Kings College invited me to deliver the keynote address at its 2017 commencement ceremony.

Flight of the Sandhill Cranes

During a recent weekend in March, Marlene and I took our grandkids to witness one of nature’s miracles:  the annual migration of the Sandhill Cranes.

Each spring over a half million of these majestic birds pause on a narrow stretch of Nebraska’s Platte River to replenish themselves during their seasonal migration.  The sight and sounds of this many cranes is, well, indescribable.

The Sandhill Cranes come from Mexico, Texas, and New Mexico, breaking their trip in Nebraska on their way to Canada, Alaska and Siberia. (That’s right, Siberia.)  It’s an epic journey of thousands of miles that these amazing birds make each year.

While the simple spectacle of all these cranes is fascinating enough, our experience was made richer still by the insights shared with us by Chuck Cooper and Sandra Douglas of the Crane Trust.

And, while they are not endangered today, conserving the natural habitats needed for the Sandhill Cranes is among the many issues my family and I consider when thinking about where The Ricketts Conservation Foundation should focus its attention.

The Minimum Wage Fallacy

Do you remember your first job?

Some rode newspaper routes. Others worked as short order cooks, bagged groceries or manned cash registers. If you were lucky you served as a lifeguard over the summer; the less fortunate among us might have done hard labor down on the farm or over at a construction site.

No matter what you did, there was a certain satisfaction to be gained when the paycheck rolled in from a hard week’s work. Of course, the money was secondary to what it represented: You earned something for your efforts.

Sure, having a few bucks for a movie or milkshake was great. But you could not put a price on the skills and responsibilities you developed. Showing up at a job on time, taking orders, volunteering to help your coworkers, putting the customer first, and always hustling would prove useful no matter what industry you ended up in.

And beyond these basic skills, that first job gave you a sense of purpose, dignity and pride.

When we hear politicians and pundits talk about minimum wage jobs today, it seems many of these folks forgot about these experiences. Or perhaps they never had them.

The chattering class narrative goes something like this: “People working minimum wage jobs cannot put food on the table for their families. Therefore, we must raise the minimum wage.”

Let’s put aside the economics and politics of the matter for a second.

Framing the issue as the chattering class does illustrate a fundamental misunderstanding about the nature of minimum wage jobs.

Some basic questions about the minimum wage shed light on this.

How old are most people working minimum wage jobs?

According to the Bureau of Labor Services’ (BLS) most recent report on the minimum wage, based on data from 2015: “Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less.”

What kind of jobs do minimum wage earners hold?

The BLS report states: “Almost two-thirds of workers earning the minimum wage or less in 2015 were employed in service occupations, mostly in food preparation and serving related jobs.”

In other words, these are basic jobs like the ones we held when we were kids.

Do most minimum wage earners support families?

In 2015, 931,000 of the 2.6 million Americans ages 16 or older earning minimum wage or less – or approximately 36% of all such workers – were either married with a spouse present, or had a marital status of “other.”[i] Thus, the vast majority did not consist of families.

How many workers earn minimum wage or less relative to the total size of the American workforce?

The 2.6 million Americans ages 16 or older earning the federal minimum wage or less in 2015 represented 3.3% of the 78.2 million such workers paid at hourly rates. Since 58.5% of all workers are paid at hourly rates, that means that just under 2.0% earned the federal minimum wage or less.

So the minimum wage mainly impacts young, low-skilled workers, who have not started families, representing a fraction of the U.S. workforce.

Does that square with the critiques that start from the premise that the minimum wage must be high enough to support a family?

Clearly the answer is “no.” Most of the Americans impacted by the minimum wage are too young to have started a family, or otherwise not ready to do so.

Of those who do have a family to support, which represents a fraction of a fraction of the American labor force, some are likely to be early in their careers, seeking out lower-paying opportunities as a springboard to better ones.

That is of course the real purpose of minimum wage work: To build one’s resume, break into an industry and learn valuable skills. The small amount paid out in wages does not account for the total value of the job – the education, the experience and the contacts. These are all essential elements towards building a career – and fast transitioning out of a minimum wage job towards more challenging and rewarding opportunities.

There is another thing that is missed in this minimum wage conversation.

Calls to raise the minimum wage significantly deprive America’s youth of an opportunity that we once had – to work as kids – that served us well in life.

As basic economics tells us, the higher the minimum wage above what the market will bear, the lower the quantity of minimum wage jobs there will be. If you are in the restaurant business and you can only afford to hire a limited amount of workers because of the increased cost, chances are you are going to hire the more experienced worker rather than the high school kid. You will not want to waste time and money on training.

The minimum wage narratives we so often hear are not only inaccurate, but they can lead to policies detrimental to our children and grandchildren.

We must put them in their proper context as one piece – a critical steppingstone — in the great puzzle that is the American labor force.

Museum of American Finance Annual Gala

What a wonderful evening we had in New York last Wednesday at the Museum of American Finance’s annual gala. This is always a great event, held to support an important and deserving institution, but this year I found it especially meaningful, as the museum used the occasion to honor me with its Charles Schwab Financial Innovation Award. Introduced just last year and named after my business competitor and friend Charlie Schwab (who quite appropriately was the award’s first recipient), the award is meant to recognize individuals who have introduced new markets or new financial instruments to our financial system. While I’ve never been one to seek out awards and testimonials, I’m enormously proud of the role TD Ameritrade has played in helping to make financial markets more accessible to everyone, and the fact that our peers in the financial-services industry have seen fit to recognize our contributions is a wonderful thing.

The museum, of course, exists not simply to educate us about the history of American finance, but also to remind us of the absolutely essential role that finance plays in making possible the thing that makes America strong and prosperous – our system of free enterprise. That’s not to say there aren’t important lessons to be learned from our history. As I told the group in my acceptance speech, it’s worth remembering what gave us our start in the financial-services business: the 1975 deregulation of the commission structure, which ultimately made the stock market accessible to millions of small investors. Deregulation was a good thing then and I strongly believe it can be a good thing now.

What made the evening at the museum particularly special was to be surrounded by so many dear friends and loved ones, including my wife Marlene, my children and their spouses, and colleagues from TD Ameritrade with whom I worked shoulder-to-shoulder through so many adventures. All in all, an evening to remember. It just doesn’t get better than this.


Pride and Reassurance

I’ve written before on this blog about  how Marlene and I raised our children not only to be self-reliant and hard-working, but also to believe in the importance of public service. So it shouldn’t come as a surprise to anyone how proud I am that President-elect Trump has asked my son Todd Ricketts to serve in his administration as Deputy Secretary of Commerce.

As far as I am concerned, there is no challenge facing our great nation more pressing than the need to get our economy back on track. The Obama legacy of higher taxes and government interference has been leading us down an unsustainable path that if unchecked would have led to disaster, stifling the engines of economic opportunity and further crippling the middle class. The fact that Mr. Trump has called on Todd to help him reverse this unacceptable drift is not only a source of great pride to me but also a reassurance that the country may once again be headed in the right direction.

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