Expanding wealth gap ‘a clear and present danger’—By Charles Hallman, Staff Writer

john a. powell -Photo by Onika Nicole Craven
Robert Reich   -Photo by Charles Hallman
Photo by Onika Nicole Craven

Could President Barack Obama’s jobs plan help reduce the Black jobless rate, which at almost 17 percent is nearly twice the nation’s overall unemployment rate of 9.1 percent? A recent conference on economic injustice brought in speakers Robert Reich and john a. powell to address this question and others concerning the acute economic crisis currently facing Blacks and other communities of color.

Administration officials have said that the president’s American Jobs Act, if enacted, would provide:

• support for 1.4 million Blacks who have been unemployed for six months or longer;

• summer and subsided jobs for youth (Black teen jobless rate is at 46.5 percent);

• an infrastructure investment plan;

• tax breaks for small businesses, cutting payroll taxes in half to 3.1 percent for employers on the first $5 million in wages; and

• broad tax relief to all businesses, but targeting it to the 98 percent of firms with wages below this level.

The Act would help “every part of our country, but particularly those who are the most vulnerable, who have been struggling the hardest,” said White House adviser Valerie Jarrett on the Steve Harvey radio show.

“I wished he’d gone further,” said former U.S. Labor Secretary Robert Reich of Obama’s $450 billion job plan. “Infrastructure spending, aid to the states, school construction, all of that is useful. But $450 billion relative to something in the order of an $800 billion shortfall between where we could be — producing at near or full employment — and where we are, it’s actually rather small.”

Reich, the former Labor secretary under President Bill Clinton and longtime economist, recently was in the Twin Cities. He met with the MSR and other reporters Sept. 9 at the Service Employees International Union’s (SEIU) Minneapolis office.

“I thought he told a very convincing and powerful story of us being in a jobs recession, and the job crisis being a worse crisis than the deficit crisis,” said Reich of Obama’s Sept. 8 speech to Congress.

“I would have rather the president comes up with a plan that was proportional to the size of the problem, even if that meant Republicans would not go along with it, and then campaign on it.”

However, he predicted that the overall unemployment rate might go down at least a percentage point between now and the 2012 presidential elections.  “[The president’s jobs bill] might be a tiny effect on unemployment, and a tiny positive effect on [economic] growth,” he says, “but it is not nearly up to the challenge.”

That challenge, he strongly believes, is to seriously address the current wealth gap in which the haves group is small while the larger group of have-nots, which disproportionately includes Blacks and other people of color, continues to grow.

“This is a deeper problem,” he points out. “The pain right now is very widespread. It’s not just the minority communities, or just poor communities — it’s the working class [and] much of the middle class.

“The total [U.S.] income is going to the top one percent. The vast middle class, working class and the poor do not have enough purchasing power to keep the economy going.”

We should be fighting for a new economy in this country that’s fair and equitable, argues Ohio State Law Professor john a. powell, the director of the Kirwan Institute for the Study of Race & Ethnicity. He spoke Sept. 10 at the Summit for a Fair Economy conference at Minneapolis Southwest High School.
The event organizers, which included Minnesotans for a Fair Economy, ISAIAH, Neighborhoods Organizing for Change, and the SEIU, reported that an estimated 500 community, labor and social justice activists attended the all-day workshops, which featured powell and Reich as keynote speakers.

“We have to think about a global strategy,” powell told the audience. “Today we need a middle class — it doesn’t have to be in America, because there has been a global [economic] shift. Even before the current crisis, the obligation for paying [taxes] to our government has shifted from the wealthy to the workers.
We watch those who have [wealth] try to take it away from [the rest of] us.”

Powell said it seems that the federal government “is in love with business and not with the people,” using as an example the Wall Street and bank bailouts. “That $13 trillion dollars…every person’s mortgage in the United States could have been paid off. Instead it went to the banks, hoping that they would make loans” to consumers.

Hit especially hard, he said, are Blacks and Latinos whose communities “are being devastated by the banks refusing to loan.  They are sitting on the money.” The current racial and economic inequities mainly exist because Blacks and other people who “are not White are seen as non-human,” powell believes.

Although the U.S. middle class is “under increasing stress” and the working class is “under extraordinary stress,” Reich noted that “a great disproportion of minorities” make up the country’s poor.

However, he explained, “The disparity right now is, on the one hand, the middle class and the poor, and on the other hand, the very rich. What unites us is that everybody is getting a terribly bad deal, and has been getting a bad deal for many years. What worries me is that the right wing is using the economic stress that everybody is feeling right now to divide us.

“The huge forces of wealth, money, and right-wing dogma are now posing a clear and present danger in this country,” warned Reich. “This is the worst economy for average working-class people and the poor that we’ve had since the Great Depression.”

“I don’t think I heard anything that we could apply here to create jobs and slow down the racial disparities,” said Marcus Harcus of Minneapolis, who attended the conference and heard Reich’s speech.

“We have to stop our people from dropping out of school and from being trapped in failing schools,” said Harcus. “Another real issue why we have such huge unemployment is because of criminal record[s]. A lot of our people are arrested but are not convicted, but it haunts them forever.”

Harcus also agreed with Reich that President Obama’s jobs bill could have been more. “Tax cuts aren’t going to solve the unemployment problem in the Black community,” he said. “I was hoping that there would be something like a Work Projects Administration. We have to come up with solutions.”

The current income gap that exists in this country must be fully acknowledged by all, powell concluded, and not just by those who are most affected by it. “The country is changing, and we need to speak to that.” His fear is that groups like the Tea Party want “to take back America to when it was all White.”

Charles Hallman welcomes reader responses to challman@spokes man-recorder.com.