Congresswoman Maxine Waters, who a few months ago said Blacks were "getting tired" of the president's unresponsiveness to Black unemployment, is now on the bandwagon. In response to the American Jobs Act (AJA), the Hill blog quoted the Congresswoman saying, "[President Obama] heard [the Black community]. As a matter of fact we can see our hand print all over this proposal. We're pleased about it."
Minority advocates should be pleased, but they shouldn't be tripping over one another to sing the president's praises. Are there some good things in the AJA? To be sure. But, in the words of Martin Luther King Jr., the bill "is like a check that comes back marked insufficient funds."
Black and Latino communities have been disproportionately harmed by the housing and financial crisis. Prior to the recession, Latino unemployment was the lowest in the country at roughly 6 percent. Today, it stands at 13 percent. Blacks were experiencing recession-like unemployment rates before the Great Recession. Now, they are experiencing an economic depression with 16.7 percent unemployed, over 25 percent underemployed, and 27 percent living below the poverty line.
Both groups also saw the wealth they acquired evaporate almost over night. Hispanics lost 66 percent of their wealth and Blacks lost 54 percent. And, as I explained in "White/Minority Wealth Disparities: The Rest of the Story," both minority communities experienced disproportionate losses not only because their wealth was locked into their homes, but also because Black and Latino assets are more vulnerable in economic downturns.
The American Jobs Act does little to address the disproportionate harm experienced by these communities. Extending unemployment insurance was a necessity, lest more Black and Latino families slip into poverty. But of the almost 3 million unemployed Blacks and 2.6 million unemployed Latinos, less than half will be immediately helped by the extension of UI. And this does not include the more than 11 million Blacks and Latinos over 20 who are not in the labor force at all. They need more than UI to pull themselves up and out of this recession.
The president dedicated $5 billion towards "pathways back to work," the initiatives focusing on low income youth and adults. But that represents just 1.1 percent of the AJA's total spending. And only $8 billion, or 1.8 percent, is allocated for the jobs tax credits for the long-term unemployed.
Over 55 percent of the American Jobs Act focuses on cutting payroll taxes for employers and employees. This has its benefits. The average minority family will have more money in their pockets (approximately $1,500 for a typical household earning $50,000) and the average minority business owner will have more money in his budget. But payroll tricks like these should not be confused for anti-poverty efforts or real job-readiness programs. They are temporary fixes meant to carry families through hard times, but not to stabilize them over the long run.
Though the Obama plan is heavy on Republican favored tactics like tax cuts and tax credits, there are some progressive programs that will aid minority communities. The rehiring of teachers and first responders will make it more likely that minority children will be educated during this recession and that the safety of minority communities will not be compromised. The effects of school modernization should be felt first in poor urban communities, where schools are most in need of repair. New jobs for construction workers and veterans will undoubtedly mean new jobs for some Blacks and Latinos.
But don't we owe these communities a bit more than a few (re)hires and tax breaks? In our legal system, harm earns compensation. The greater the harm, the greater the compensation. But in the AJA, we see Blacks and Hispanics being treated as though their harm were proportionate to what everyone else experienced. The fact sheets for African American and Hispanic Families merely list the same headings from AJA and explains the AJA's impact. But any bill would have impacted minority communities. The question is, was it meant to impact these communities?
Maxine Waters and other Black and Hispanic leaders seem to think so, but the AJA is too nonspecific in my view. It does not emphasize the specific needs of specific communities. What Blacks and Latinos needed was a targeted approach to their plight. Like Mayor Bloomberg's Young Men's Initiative, the American Jobs Act ought to have, at least in part, focused directly on minority communities. And it need not have limited itself to minorities. It could have focused on southerners and working class whites and unemployed college graduates as well. The point is that a remarkable American Jobs Act would have emphasized policies that fit the needs of different broad constituencies. We may all be Americans, but that doesn't mean we all have the same needs.
This is not a call to rebel against the American Jobs Act. The president's jobs bill does a lot of good, as most independent economists confirm. Still, there is more to be done. That is why the National Council of La Raza, among others, are calling for "additional targeting for distressed communities" in due time. Everyone recognizes that this political climate is toxic for progressive policies. But that reality should not blind us the fact that more needs to be done. If pressure from the Black community and other advocates got us this bill, then more pressure should help to secure more aggressive policies that uplift minority communities. Advocates should see this bill through and then get right back in the trenches.
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