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Reality Check: One Year after Stimulus, Blacks and Latinos Still Struggling

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On the one-year anniversary of the stimulus bill, the administration will do much to convince us that it is indeed working. However, it's going to take more than colorful pie charts and grandiose projections to ease the anxiety and the angst gripping communities. For Blacks and Latinos, relief and employment remain elusive.

Last year, in its optimism, the administration estimated that the Recovery Act would create close to 4 million jobs and provide direct support to families struggling to make ends meet. To date, only one-third, or a little over 600,000 jobs have been created or saved. Despite efforts, unemployment among Blacks and Latinos continues to climb to historic levels.

In January, the unemployment rate fell to 9.7 percent, but the rates for Blacks and Latinos have inched up to 16.5 percent and 12.6 respectively; figures significantly higher than the national average. For Black men, the unemployment rate is the highest among all workers -- 19.5 percent.

To compound matters, job creation has been slow and gains made have been overshadowed by the magnitude and depth of the economic crisis. The number of jobs created has not kept pace with the number of jobs shed over the same period. Since the start of the recession, 8.4 million jobs have been lost and employers are skittish in terms of re-hiring or creating new positions.

Although money is going out the door, very few people on the ground floor are reaping the benefits. Of the funds earmarked through the legislation, close to $200 billion has already been awarded to states through contracts and grants, with another $150 billion in the pipeline. An additional $93 billion has gone toward tax cuts. Now there is talk about another bill that would focus specifically on job creation and employment. The question is, have any of the funds doled out so far reached those individuals and communities who are suffering the most during this crisis? I am not so sure.

Of the contracts awarded in states, it is estimated that only 2.7 percent have gone to women owned businesses. Similarly, only a tiny fraction have gone to minority contractors and businesses -- 5.9 percent. And given the rising unemployment rates in communities of color, it doesn't look like they have benefited much from the dollars or contracts that have been funneled into states.

In general, the administration has been reluctant to respond to the way the economic crisis has unevenly impacted racial and ethnic communities. Before the recession hit, the unemployment rate for Black and Latinos hovered around 8 percent and has nearly doubled since then. With fewer assets and savings compared to whites, recovery and regaining some sense of economic normalcy is far off for many Blacks and Latinos.

Any re-tooling of the current stimulus bill and future legislation to spur job creation will have to take seriously the disproportionate impact the recession is having on racial and ethnic minorities. To do anything less would be irresponsible or essentially like using a sponge to assuage a flood.

The administration will have to be proactive and deliberate in its efforts. A special task force should be established to examine the higher than average unemployment rates in Black and Latino communities and to develop long-term strategies to support long-term recovery. The task force should also take up how to ensure that minority-owned and women-owned businesses are able to effectively compete for and win recovery contracts.

For the most part, the stimulus has done very little to change the game for Blacks and Latinos in terms of unemployment and increasing their economic stability. In fact their situation has worsened over the last year. To change the game, collectively we will have to do more and develop multiple strategies to deal with the crisis so that all communities are able to recover in due time.

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