The Stimulus and People of Color: A Rising Tide Isn't Lifting All Boats
By Kim Pearson on March 16, 2010
BlogHer Original Post
Jobless rates have stabilized somewhat in the United States, and the Obama administration contends the year-old American Reinvestment and Recovery Act stimulus package deserves part of the credit. But recent analyses are revealing that the recovery isn't reaching some of the communities hardest hit by the great recession.
In fact, a February 2010 report (.pdf) by the Kirwan Institute for the Study of Race and Ethnicity found that the African American unemployment has been rising while the jobless rate for members of other groups are starting to fall.
"More recent trends show that the White unemployment rate has decreased each month since October of 2009, while the rate for Blacks continued to climb for most of that period (see Table 2). A further breakdown (shown in Chart 3) reveals that the unemployment rate for Black men (17.6%) is almost twice that of White men (9.1%), and that the unemployment rate for White youth is 23.5%, compared to 37.2% and 43.8% among Latinos and Blacks (see Chart 4).2"
The Kirwan Institute study also found that businesses owned by women, blacks and Latinos have been awarded a disproportionately small percentage of the federal contracts awarded under the stimulus.
"An overall look at Federal ARRA contracting reveals noticeable inequality. Despite the fact that Women-owned, Latino-owned, and Black-owned businesses account for 28.2%, 6.8%, and 5.2% of all U.S. businesses respectively,3 as of February 1, 2010 they had only received 2.4%, 1.6%, and 1.1% of the value of Federal ARRA contracts that have been procured (see Table 3).4 "
The report doesn't report whether the demographic backgrounds of the applicants for the recovery grants was closer to the overall population.
Titania Kumeh at Mother Jones noted the report''s recommendations, including: investments in community infrastructure, targeting low-income communities for green job programs and jobs programs for ex-offenders. These suggestions are consistent with recommendations made by the National Urban League in December, 2009. Their six-point jobs plan also includes a call for direct job creation in communities with the highest jobless rates and the expansion of the Small Business Administration's Community Express Loan Program to increase the credit available to entrepreneurs in communities with the highest unemployment rates.
In a Feb. 8 New York Times article, Pres. Obama rejected the idea that he should push for policies that specifically address African American concerns:
“I can’t pass laws that say I’m just helping black folks. I’m the president of the United States. What I can do is make sure that I am passing laws that help all people, particularly those who are most vulnerable and most in need. That in turn is going to help lift up the African-American community.”
About the same time that article was published, NUL president Marc Morial, (pictured above, left) , the Sharpton (below, right) and NAACP president Ben Jealous met with Pres. Obama to talk about the impact of the economic crisis on African Americans. No one knows what was discussed, but critics such as Johns Hopkins political science professor Lester Spence isn't the only person to wonder why the President would hold a meeting about economic issues without having economists and public policy experts at the table.
But Joel Dreyfuss, a veteran financial journalist who currently edits TheRoot.com, argues that Obama's race actually makes it harder for him to address issues of particular concern to black folk. In an interview with Michel Martin for her show, Tell Me More, Dreyfuss said:
"I think ironically if [Obama] were white, he would be much freer to address these issues and tackle specific problems with the black community. Remember that it was Nixon who started supporting black entrepreneurship, for example, you know. I cant imagine Obama now creating a program just to support black entrepreneurship, it wouldn't happen."
More recently, the conversation about the policy and politics of addressing this problem has been overshadowed by a public spat between Sharpton and fellow African American media personality Tavis Smiley. If you haven't heard their celebrity death match, you can do so here:
The Sharpton-Smiley side show notwithstanding, there are reasons for economists and policy analysts to think about how this crisis affects members of marginalized communities.
First, the concentration of large numbers of long-term unemployed has serious implications for the social stability of those communities and surrounding regions. Second, this crisis has compounded the challenge of addressing longstanding gaps in wealth and asset-building among poor people and people of color.
Even before this economic crisis hit, a 2007 Brookings Institute study found that African Americans were failing to make the kind of inter-generational progress that we associate with the American Dream. In fact, young African Americans have a harder time reaching the standard of living enjoyed by their parents, much less surpassing them.
Conversely, well-targeted efforts to improve the lot of the most vulnerable in our society have historically helped everyone. A year ago, the Kirwan Institute argued for what it called a "targeted universal approach" to funding recovery projects. This approach takes the disparate impact of the economic crisis into account. At that time, they predicted that the stimulus might deepen the economic crisis in some communities because of the failure to use such an approach:
"[A]t press time, $29 billion of the ARRA is allocated for road and bridge construction; $8.4 billion to public transit improvements; $8 billion to high-speed rail investments and $18 billion to grants and loans for water infrastructure. $5 billion is allocated for home weatherization grant; $6.3 billion for energy efficient upgrades for public housing. All of these will stimulate construction jobs, yet labor statistics show that African Americans, while comprising 13% of the population, make up less than 6% of construction workers. Women - half our population -- hold 9.4% of construction jobs. This is an "early warning bell" that stimulus job creation may not be as equitable as it could be."
To be fair, much of the funding that will be available under the stimulus plan has yet to be disbursed, and the stimulus is not the primary determinant of unemployment rates. Still, it seems clear that the success of the overall economic recovery effort will require at least some attention to the rough sailing that communities of color are enduring.