Obama's Stimulus Can't Slow Black, Latino Unemployment

New America Media/Final Call, News Report, Charlene Muhammad Posted: Jan 29, 2010

Editor's Note: In his State of the Union address, President Obama called on Congress to send him a new jobs bill. This as New America Media/The Final Call investigation shows the stimulus bill he signed last year did little to slow the rise in Black and Latino unemployment.

As America's first Black president enters his second year in office, unemployment among Blacks has reached record levels.

Black unemployment will rise from 16 percent to 17 percent by the third quarter of 2010, compared to unemployment among Whites and Latinos, which will reach nine percent and 14 percent, respectively, according to new projections by the Economic Policy Institute.

Further, analyst and author Kai Filion indicated in his report, “Downcast Unemployment Forecast,” jobless rates among Blacks in Alabama, Illinois, Michigan, Ohio, and South Carolina will climb above 20 percent. It will go above 12 percent for Latinos in Arizona, California, Connecticut, Florida, Nevada, New Jersey and New York.

But as bad as the numbers are, he found, they represent the positive impact of the American Recovery and Reinvestment Act of 2009. President Barack Obama signed the stimulus package to primarily help jump start the U.S. economy by creating and saving jobs.

“I’m happy that he’s my first Black president, and I think he’s doing the best with what he’s got, the mess he walked into that was left by Bush. That’s going to take more than a year to fix, but still, with this whole job creation stimulus package, the money’s just not getting to the people,” said 43-year-old Brian Kirt.

After he was laid off 11 months ago from his 17-year job as a youth advocate, Kirt filed for unemployment and relocated from the San Francisco Bay area to Colorado for a more affordable cost of living.

Sure, by extending unemployment insurance benefits and increasing them to $25 a week, Kirt said, the stimulus package has put a few extra dollars in his pockets. But that doesn't do anything to change "the reality" for Black America, he said.

Extending the unemployment benefits is important, but people need steady job creation and more than quick fixes, argued Dr. Marc Lamont Hill, associate professor of education at Columbia University.

While temporary work to build roads is important, what communities really need is a long term investment in jobs and industries that will sustain themselves, he said.

Another thing is that this government and powers that be refuse to address the unique circumstances around Black unemployment, said the analyst. “There are a set of circumstances in place that make it more difficult for Black people to get job ready, to get jobs that they’re qualified for, and to get appropriate wages if they get the job ... So at a moment where President Obama has expressed a commitment to creating a rising tide that will lift all boats, we have to acknowledge the fact that the Black boat has a hole in it that has come from centuries of foreign and domestic policies that has crippled our community,” Hill told The Final Call.

Lavar Young, director of the Newark Comprehensive Center for Fathers (also known as the Fatherhood Center), which helps men who have lost their jobs, homes, or are reentering the work force after incarceration transition, observed that a few new construction projects in northeast New Jersey and New York could mean work for a few Black men over the next 10 years. But except for that, he said, the stimulus package hasn’t created much employment for people he works with on a daily basis.

“It came out as a big bang and a lot of federal dollars being spread around, but it’s not getting to the ground level where it’s having a major impact and helping people and families get back on their feet. People are losing their houses every day,” Young said.

Still, he added, some people have hope that the president’s multibillion dollar stimulus package will make a difference in their local economies. But even as they hope things will get better, their patience is starting to run out.

“A lot of the brothers that we work with, we teach patience, time, and preparation for opportunities that arise, but there’s only so much you can say before a person starts to feel bad about things that are happening. People want to see action, get calls back when they fill out applications daily in their city and county, but hopefully, the change that folks are talking about we will see pretty soon,” Young said.

According to figures reported on www.recovery.gov, California created or saved more than 100,000 direct jobs through Sept. 30, the end of the Recovery Act’s required first quarter reporting period. Michigan saved or created 22,000 jobs during the same period, and Nevada, more than 5,000.

So why aren’t the stimulus funds helping to reduce unemployment for the hardest hit so-called minority populations?

Some analysts think that the process for tracking stimulus contracts and spending, as well as its newness, was flawed from the beginning, and others say it may still be too early to tell.

“One of the problems we’re having with this whole stimulus package has to do with the fact that they’ve yet to define with any kind of precision what really constitutes a stimulus program,” said Dr. William Boone, a political science professor at Clark Atlanta University. People are also wrangling with what is permissible in terms of how states and localities create jobs, he said.

“For instance, if indeed you give the money to an existing school system, which already has jobs, but it helps them maintain their jobs, does it mean that you’ve created new jobs? What does that mean?” Dr. Boone asked. "My position isn’t an argument against using money for that purpose, but it’s just an indication of how problematic it is to determine just how many jobs have been created," he said.

To be fair, Boone said, it usually takes some time for things to turn around after a major recession, and it may take even longer this time because of the severity of the downturn. He feels it would have been more productive to force employers to use the money directly to create new jobs, or make sure people would stay in their jobs, instead of giving the money to capital markets with almost no regulations and no strings attached.

Algernon Austin, director of Race, Ethnicity, and the Economy Program at Economic Policy Institute, feels the Obama administration’s attempt at transparency in terms of stimulus spending has actually weighed the process down with errors—mainly because nothing like it has ever been tried before.

In addition to measuring jobs created and saved, the government is measuring spending that is not directly related to jobs, such as tax cuts, and while extending unemployment insurance preserves jobs because it gives people money to spend, which in turn supports businesses, that doesn’t easily or clearly show the job savings, Austin explained.

The bottom line is that the Recovery Act is supposed to create three-to-four million jobs, but the U.S. needs about 12.1 million jobs — the 8.1 million already lost, and 1.5 million needed to correct employment disparities between Whites, Blacks and Latinos, he said.

In order to create more jobs, according to Dr. David Horne, executive director of the California African American Political and Economic Institute, states have to spend more of the stimulus funds they’ve received, and involve non-profit and community organizations in decision-making about spending.

Meanwhile, he encourages people to take advantage of jobs programs that help retrain workers for different fields. “It is going to take more than looking in the newspapers or want ads. This is a 21st Century bad jobs situation, so people need to use a 21st Century strategy to reverse the situation,” Horne said.

This report was made possible by a fellowship funded by the Open Society Institute. It originally appeared in The Final Call.

Related Articles:

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Stimulus Saves English Literacy Classes in Massachusetts

Black Businesses Shorted on Stimulus Contracts


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