Stimulus of little benefit for black Americans: Economic program sparks comparison to Jim Crow days

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The Charlotte Post

By: Hazel Trice Edney

March 4, 2010

WASHINGTON - A little more than a year ago, Feb. 17, 2009, newly inaugurated President Barack Obama took his first corrective action to quell the escalating economic crisis.

That action was to sign the American Recovery and Reinvestment Act, known as the stimulus bill, a $787 billion package to create and preserve jobs and spur economic growth.

 

But, one year later, a non-partisan study by the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University has found that despite the president's noble efforts, the economic stimulus has not only failed to boost the economy for African-Americans and other historically disadvantaged people, including women, but it has produced starkly disparate results between white workers and people of color and failed to correct long-standing racial disparities.

 

"I know that a lot of the programs that were developed in the 1930s and '40s were developed in such a way that didn't target people who were the most marginalized such as African-Americans, Latinos and other groups like Native-Americans," said John Powell, executive director of the Kirwan Institute on why the study was done.

 

"And I was concerned that unless we did that during this deep recession, you could actually end up with a set of programs that would not only not serve those communities well, but also push those communities further behind."

 

Powell compared the stimulus to those established during days of Jim Crow when racially disadvantaged groups were not even considered in economic initiatives. The report tells why his comparison is not extreme:

 

"While overall unemployment has started to decline (and decline for white workers), black workers may soon reach the 2010 unemployment rate which was once projected to occur if a stimulus or recovery bill was not enacted," the report states.

 

"This suggests that many of the employment gains from American Recovery and are not reaching workers of color."

 

The report continues, "White unemployment has started to decrease (from a peak of 9.4 percent in October 2009 to 8.7 percent in January 2010), while black unemployment rates continues to rise (from 15.5 percent to 16.5 percent during the same time period). Latino unemployment rates have also decreased slightly but remain very high, decreasing from 13.1 percent in October 2009 to 12.6 percent in January 2010."

 

Among other disparities listed in the report:

 

• One in five children were living in poverty in 2008, and poverty rates for children of color are climbing above 40 percent in some states;

 

• While one in 10 workers are unemployed nationally, one in six black workers and one in eight Latino workers are unemployed;

 

• Nearly half of all subprime loans went to African-American and Latino borrowers, even though many qualified for prime loans;

 

• African-American and Latino homeowners are expected to lose $164 ? $213 billion in assets due to the housing crisis;

 

• The percentage of children in poverty is likely to peak at 21 percent in 2010;

 

• Neighborhoods and communities are also being reshaped by the detrimental impacts of the housing crisis and recession;

 

The report, released late last month, comes just as President Obama - the nation's first black president - proposed 2011 budget seeks to boost programs aimed to improve the quality of life for African-Americans, according to the White House Office of Public Engagement.

 

The Kirwan report comes as no surprise to African-Americans who are well aware of the economic pains experienced first-hand. Many have expressed disappointment in Obama's lack of a targeted plan in the black community; including civil rights leaders Ben Jealous of the NAACP, Al Sharpton of the National Network and Marc Morial of the National Urban League, who two weeks ago trudged through a snow storm to a White House meeting with President Obama just to express what most Americans already know: That his "rising tide lifts all boats" theory about unemployment, expressed in a press conference, is apparently not working.

 

Neither is it working for black contractors and businesses, the Kirwan Report confirms.

 

"Minority and disadvantaged business contracting is a critical source of job and wealth creation for marginalized groups and communities. Many concerns have been raised about the ability of minority firms to successfully compete for contracts," states the report, titled, "ARRA and The Economic Crisis: One Year Later Has Stimulus Helped Communities in Crisis?"

 

It continues:  "Although consistent state level data on ARRA contracting to minority firms is not widely available, figures from federal procurement indicate troubling and disparate contracting patterns. While black-, Latino-, and women-owned businesses represent 5.2 percent, 6.8 percent, and 28.2 percent of all businesses respectively,12 as of February 1, 2010, they had only received 1.1 percent, 1.6 percent, and 2.4 percent of all federally contracted ARRA funds.  Of the $45 billion in direct federal contracts allocated by February 1, 2010, less than $2.4 billion (5 percent of the total) were allocated to black-, Latino-, and women-owned businesses."

 

Black contractors have long complained that they were not getting their fair share of state and federal dollars. That complaint continued specifically about the economic stimulus dollars. Also, black-owned newspapers point out how they've been consistently shorted in allocation of advertising dollars from federal agencies such as the U.S. Census Bureau as well as private corporations that received stimulus money, including car dealerships.

 

White House sources have conceded that the absence of tracking economic stimulus dollars has added to the problem of assuring fair dissemination.

 

But, fair contracting laws, including Title VI of the Civil Rights Act of 1964, prohibits discrimination on the basis of race by federal government agencies - either intended or unintended.

 

Powell, also one of the researchers, says that studying the fairness of the dissemination of the stimulus money was hindered because "the administration did not require the tracking of data based on either race nor gender...Here we're spending almost a trillion dollars and they have all of these requirements for tracking information, but race and gender was left out. We felt that that's a bad sign. So we decided that we would try to track it."

 

Powell says the mistake that the White House has apparently made is to attempt to meet a universal goal with the same process.

 

"The way you might have dealt with it is if you say, 'We want to reduce unemployment in every community across the country.' How you would do that in the black community, how you would do that in the Native-American community, how you would do that in the rural community, the process is different. The goal is universal, but the process is different because the people are situated differently."

 

Powell says he does not buy the "We have to serve all Americans" excuse for not recognizing diversity. "For some people, the escalator is fine. Some people may need to take stairs. But, some people may need an elevator. And that's not to say that the people who use the elevator are getting any special [treatment]. They're situated differently in relationship to structures. And that's significant for African-Americans."

 

Among the solutions suggested in the report:

 

• Rather than scale back job-tracking efforts, add measures which consider the quality and duration of employment, as well as the race, gender, and zip code of job recipients.

 

• Unbundle large contracts for small businesses. Breaking up large projects will allow for more small business participation in the recovery.

 

• Set and mandate specific, Minority Business Enterprise and Disadvantaged Business Enterprise Goals for every department.

 

• Use targeted reinvestment in hardhit areas, first source hiring, apprenticeship and job training.

 

• Increase employment opportunities for ex-offenders.

 

• Consider that the mandate to expend ARRA funds as quickly as possible, with special priority given to 'shovel?ready' projects and projects receiving private investment, may be giving short?shrift to civil rights compliance, particularly Title VI and Title VIII of the Civil Rights Act of 1964.

 

• An equitable jobs bill is still required to stem the economic crisis facing marginalized communities.

 

"The racial wealth gap in this country is stark and real," says Anita Sinha of the Advancement Project, in an essay included in the report, "And to think that stimulus dollars may be lining the pockets of the usual suspects while passing over low-come people of color's access to job training and placement opportunities is dismaying."

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This page contains a single entry by Ernest Roberts published on March 5, 2010 8:09 PM.

Jobs Bill Closer To Final Passage: Businesses Say Tax Breaks Are Welcome But They Won't Generally Lead to Hires Until Sales Improve was the previous entry in this blog.

United Way plans to educate low-income consumers about value of banking is the next entry in this blog.

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