Report shows while economy recovers, people of color suffer financial ills
A new economic report points out that even if the U.S. economy is now recovering, it has not reached the Black community, especially locally. The Center for Popular Democracy and Economic Policy Institute last month released a 80-page report, “Wall Street, Main Street, and Martin Luther King, Jr. Boulevard: Why African Americans Must Not Be Left Out of the Federal Reserve’s Full-Employment Mandate.”
It pointed out “some glaring statistics,” says Neighborhoods Organizing for Change (NOC) Executive Director Anthony Newby. Black unemployment in the Twin Cities metro area is at least four times higher (10.9 percent) than for Whites (2.8 percent), and the state jobless rate for Blacks is nearly 12 percent, compared to three percent for Whites, says the report.
“That’s a real indication that race is a factor… There is a significant impact on the Black community,” says Newby.
Joe Elliott worked for five years (2008-12) as an usher at Target Center, making around $9 an hour at games and “as many events as I could from Timberwolves and Lynx basketball to ice shows, concerts, high school basketball tournaments — as many hours I could get,” he says. “I had multiple jobs but my main one” was at the arena. “I assisted guests and showed them their seats. I cleaned the area after events.”
Elliott also worked second and third jobs to help pay his regular living expenses, including taking care of his mom and his three young children. He estimated he might bring home after taxes under $1,000 a month.
“I work as hard as I can,” Elliott points out. “I tried to work 40 hours if I could. But it wasn’t guaranteed.”
Elliott estimates that he was among four Blacks out of around 25 ushers before he was laid off over three years ago. “One person told me they couldn’t afford to pay me. Another person came and said something about scheduling.”
“The real unemployment rate [for Blacks] is probably well above 20 percent” if you count those who stop looking for work or their unemployment benefits have ran out, says Newby.
Black workers’ wages also have dropped 44 cents while White and Latino wages have risen 45 and 48 cents respectively since 2000, and Black wealth “was a mere 16 percent of Whites in 2001” but now only eight percent, states Newby, who adds that Black median household income between 2007-13 dropped 23 percent.
Elliott, a 27-year-old Black man, says he wants to work “a good job.” He tries to stay positive, but it’s hard to find steady work with only a high school diploma and a couple of years of college.
The Federal Reserve regulates “ideal” unemployment levels and raises interest rates when it calculates that the employment rate has reached its target. Now, Wall Street is suggesting that the economy is now recovering; it’s time for the reserve to raise interest rates. Newby, however, argues against this.
“If you look at the average person in this state — White or Black — [they are] still struggling to make ends meet. Wages still have not increased, [and they’re not] able to buy a house. There is no evidence in the Black community that the economy is picking up.
“Communities of color have been locked out of economic opportunities, and the Fed has played a role in that,” he says. “I can’t speak for the entire community, but I know I didn’t know all that much about the Federal Reserve until very recently. My guess is that the community has been kept in the dark about what the reserve really does mostly because it is largely a group of academic folk and political actors that work together to really set the tone for our general economy.
“When we look at unemployment rates in North Minneapolis that are four times higher…it helped me to understand the problem and how the Federal Reserve plays a role in that,” says Newby.
He suggest four things that the Federal Reserve could implement:
- Keep interest rates low.
- Listen to “actual working and unemployed people.”
- The Federal Reserve should “actually represent the public.”
- Since Federal Reserve Minneapolis President Narayana Kocherlakota is stepping down in a year, “an open transparent selection process” for his successor is needed.
“We want the community to have more input to make sure that the new [Federal Reserve] president is connected to the issues of Black unemployment, the plight of working families and the unemployed,” explains Newby.
The Federal Reserve could issue 90-day, “short-term, interest-free bonds” to such cities as Minneapolis to help fund new jobs programs that could put “millions and millions of dollars into the local economy at zero percent interest, and could create real jobs,” suggests Newby. “They do this for big banks and for Wall Street.
“Minnesota is a great place to live [but] we are the worse in the nation on creating jobs for people of color as a city and a region,” concludes Newby.
Charles Hallman welcomes reader responses to email@example.com.