It's been nearly two years since 23-year-old Keisha Smith last worked a full-time job.
As the northeast Washington, D.C. woman plodded away from the One-Stop job training center on Franklin Street, where the lobby was crammed mostly with African Americans applying for unemployment benefits and searching for jobs, Smith, who has her sights set on a secretarial career, said her hopes remain high.
“I have no choice but to remain optimistic,” she told the AFRO. “The economy is a mess, but I’ve got to keep looking.”
For people like Smith, the stimulus and investment package signed by President Obama this week could be particularly beneficial, economists and other experts say.
“This is the largest amount of money that will pass through our community in a long time,” said Ron Walters, a professor of government and politics at the University of Maryland, College Park, who specializes in Black issues.
Marc Morial, president and CEO of the National Urban League, an organization dedicated to the economic empowerment of Blacks, agreed.
“This is a big, complex package with many opportunities for urban and African American communities,” he said.
The $787 billion measure is part of the administration’s remedy for an ailing economy though, it’s no cure, Obama said Tuesday.
“Today does not mark the end of our economic troubles. Nor does it constitute all of what we must do to turn our economy around,” he said during the bill signing ceremony in Denver. “But it does mark the beginning of the end – the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs; to provide relief for families worried they won’t be able to pay next month’s bills; and to set our economy on a firmer foundation, paving the way to long-term growth and prosperity.”
The administration said the plan will save or create about 3.5 million jobs. Still, the months ahead will be grim, economists predict. Millions more jobs could be lost in addition to the 3.6 million lost in the past 13 months, driving the national unemployment rate past its already 14-year high of 7.6 percent.
“In April we will be back exactly where we were in 2000…no new jobs—zero; no new income—zero,” predicted economist William E. Spriggs, chairman of the Economics Department at Howard University. He added, “Unemployment will still be high two years from now—the damage has already been done. This is just to stop the hemorrhaging.”
For the Black community the forecast is even direr.
“African-Americans are going to be clobbered,” said Dedrick Muhammad, a research associate with Washington think tank, Institute for Policy Studies.
Already, Blacks top other groups in the number of unemployed persons at 12.6 percent, and the rate is actually higher when those who are underemployed or who have stopped job searching are factored in.
Disproportionate rates of imprisonment, especially among males, also weigh on the economic well-being of Black communities.
According to the Bureau of Justice Statistics, Black men account for 36.3 percent of the overall sentenced population and they lead in the imprisonment rate at 3,138 prisoners per 100,000 U.S. residents, which is 6.5 times that of White males and 2.5 times that of Hispanic males.
“Massive incarceration rates for Blacks hide how bad unemployment is,” said Muhammad. “It factors out thousands of African Americans, who, when they do come out of prison are marginalized into least-paying and first-cut jobs.”
Black jobless rates could reach as high as 20-30 percent, some economists predict, but then the African American community has long suffered under stifling and disproportionate rates of unemployment.
“The biggest problem we have is that policy makers consider double-digits of unemployment rates among Blacks to be normal,” Walters said. “It’s only when the majority has unemployment in the double digits that everything goes into a twitter.” He added, “We’ve been suffering all along. We needed these resources all along but we needed them to be targeted.”
Several provisions of the American Recovery and Reinvestment Act seem targeted to the unemployed and working poor in urban and lower-income communities, several experts said.
Provisions that could likely create jobs or aid the unemployed include:
- $4 billion for retrofitting HUD properties
- $7 billion to extend the broadband grid to undeserved rural and urban communities
- 65 percent subsidy on health care premiums for laid-off workers for nine months
- $200 million for college work study
- $27.5 billion for modernizing roads and bridges
- $16.4 billion for investments in public transit and high-speed rail
- $25 per week increase in unemployment benefits for 20 million jobless workers and an extension of the relief program through December
- Suspension of taxes on unemployment benefits
- $350 million of community organizations that aid the needy
- $19.9 billion for food stamps
- $3.95 billion for job training, including $1.2 billion for 1 million youth summer jobs
- Spriggs, the Howard economist, said the portfolio of tax cuts — a $400 tax cut for individuals, $2,500 college tuition credit, $8,000 first time homebuyer credit, expansion of the child tax credit and more — will be particularly effective.
“It’s a fair tax cut,” he said. “When Bush tried to stimulate the economy by passing his tax cuts, he didn’t make it balanced and fair. Now, we (African Americans) actually will see the tax relief this time.”
The $53.6 billion outlay to states will also prove beneficial to Blacks, who tend to gain managerial positions and employment in general in health, education and the public sector, Spriggs added. “That goes a long way to maintaining the Black middle class.”
That segment of the community would need a bolster said, Muhammad, co-author of a report, “State of the Dream 2009,” which predicted a 33 percent decrease in the Black middle class.
“The African American community never really emerged from the 2001 recession,” Muhammad said, adding that the length and severity of this Black economic malaise qualified it as a “depression.” “During the supposed ‘good years’ African Americans were not doing well and now that we’ve shifted to the ‘bad years,’ they’re declining in employment and income rates.”
Blacks make $0.60 of every $1 of White in income. And, more devastatingly, compared to Whites they hold a mere 15 percent of wealth—savings, investments, assets—most of which has been decimated by the foreclosure crisis.
“Wealth is what gets you through the tough times,” and this bill didn’t sufficiently address the racial wealth divide, said Muhammad.
Morial said many Congressional Black Caucus members fought for more investment in education and health care with an eye to bridging that wealth divide but were forced to accept cuts in those programs as part of the Senate-House compromise.
“Those types of programs, we really wanted to fight for,” said CBC member Rep. Maxine Waters, D-Calif., on an ABC News talk show Sunday about investments in school construction. “We thought not only does that create jobs, it’s an investment in our future.”
“We lost on some of it,” she added, “but it’s a big win for American families.”
Waters and others said the $87 billion in federal matching funds for Medicaid and state monies for school upgrades, $13 billion for Title I grants and $2.1 billion for Early Head Start and Head Start is a start in terms of investment in the lower-income, inner-city communities.
To really capitalize on the potential of this stimulus bill, though, local leaders in the Black community ought to be readying people through information, preparation and organization, Walters said, something he hasn’t yet seen.
“This is not one of those positions where you can wait on the mayor to hand you a job,” he said. “As those shovel-ready projects begin you have to be already in line to pick up the shovel, already in the union hall and wherever else. “If people are not prepared to take advantage of this, this whole train can pass us by.”
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