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Seth Freed Wessler Headshot

GM Bankruptcy Hurts People of Color Hardest. Workers Desperately Need EFCA.

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When General Motors filed for bankruptcy on Monday, it left behind a long trail of grievers -- twenty-one thousand of them. The loss of these good, union jobs and the many more that will be shed when related businesses close are devastating families and communities. For black workers, who are highly concentrated in the auto industry, these have long been some of the few reliable jobs that pay living wages, supplying families of color the with the possibility of entering the middle class.

As we now know, high levels of unionization equate with smaller income gaps between people of color and whites. But in the economy we've inherited from the last three decades of deregulation and declining union density, people of color are increasingly relegated to low-wage, precarious work that pays too little to support a family. Unless Congress acts now to ensure that work actually pays, these workers will have few options and we'll only deepen the racial income and wealth divides.

A few months ago, I traveled to Michigan to interview dozens of people for "Race and Recession," a new report released by the Applied Research Center. I met Leo Shipman, a 24-year-old Black man, who had recently lost his job in an auto parts factory in Detroit. "My biggest worry is my son," he said about his 3-year-old. "You don't know how you're going to feed them. He doesn't know the bills are running up, but I do." When I met Shipman, he was on the edge of being evicted from his apartment.

With only a high school education -- Shipman's been trying to enroll in a technical college -- securing a living-wage job proves elusive if not impossible. Because he had been underemployed, Shipman had no unemployment check coming in. It's growing more likely that his only option will be to work a job that makes feeding his son a daily struggle.

As one of the last strongholds of union jobs shrinks, and people like Shipman are cast out, it's time to confront some tough truths about work in our country. Black workers like Shipman have been hit especially hard by layoffs and closures because their concentration in the auto industry is higher than their overall share of the state's labor market. In fact, across the labor market, workers of color are overrepresented in occupations with high unemployment rates. These include jobs in the service sector, as well as construction and transportation occupations. The loss of these auto industry jobs strikes a massive blow to the ability of workers, especially Black workers, to earn middle-class incomes, to save enough to pass on to their children and to achieve some financial stability. Indeed, the UAW was one of the first unions to organize Black workers and the implosion of GM further dismantles one of the mainstays of the Black middle class.

The collateral damage of job loss are taking their toll. Sandra Hines, a 55 year old Detroit native who I wrote about last week, lost the home her family owned for 40 years after her sister was laid off from GM and was forced to refinance. The family was sold a predatory loan with an adjustable rate and was evicted after payments skyrocketed. As more people lose their jobs, more families will find themselves unable to pay their mortgages and more wealth will be drained. It is now clear that the perils of this situation go beyond these communities. Indeed, as we find in "Race and Recession," the racially discriminatory predatory lending and foreclosure crisis was a central factor in pushing the economy into this recession.

As a country, we're reckoning with the fall-out from decades of putting profit above people. As precious union jobs disappear, the time has come to ensure that those who are unemployed -- disproportionately people of color -- are able to enter employment that actually pays. Congress should immediately pass the Employee Free Choice Act (EFCA) so that workers can demand fair pay without intimidation. Since UAW now has a major ownership stake in the company, the workers who remain there will be taken care of, but the 21,000 workers who are getting pushed out will be less likely to find jobs with sufficient salaries and benefits, especially as the federal minimum wage increase to $7.25 next month still does not approximate a living wage.

Ultimately, as we recover from this recession, we need to make sure that the jobs we create and the economy we build help those who have been most hurt by the recession, which have disproportionately been families of color. Ensuring that good, sustainable jobs go to communities of color across the country is an essential part of building an inclusive and working economy.

Check out arc.org/recession to learn about how racial inequity rigged the economy and how to change the rules.