AphroChic Magazine: Issue No. 5

HOT TOPIC
at higher risk of contracting COVID-19 and
offer little promise of protecting workers
who put themselves on the line for compensation,
including hazard pay and workplace
protections, including PPEs.
In April, in a report by the Economic
Policy Institute, it was estimated that less
than half of all Black adults were employed.
Underemployment is also on the rise — the
practice of underusing workers’ skills and
abilities, typically in reducing their hours
or hiring overly skilled workers for lower
skilled jobs.
As local economies cycle in and out
of shutdowns, workers are grappling with
decreased hours, income, and — as full-time
workers get placed on part-time work
schedules — eliminated benefits, including
healthcare, paid leave, and retirement, all of
which are crucial safety nets during times
of emergency like we are currently experiencing.
Again, underemployment hits Black
workers harder: it is estimated that two in
five Black workers will be underemployed in
the coming months.
The Impact on Black Entrepreneurs
The pandemic has also been devastating
for Black entrepreneurship. Blackowned
small businesses are twice as likely
to permanently shut down due to weaker
financial cushions, weaker bank relationships,
and the poor distribution of the government’s
Paycheck Protection Program,
which did not reach many Black-owned
businesses. Black unemployment is
expected to continue increasing this year,
reaching an astonishing potential peak of
30%.
Conservatives in Congress have falsely
contended that too many people have been
receiving more from their unemployment
insurance payments rather than from their
jobs. But this false idea has been debunked
by a number of recent studies, including
one study that shows the majority of unemployment
insurance claimants are receiving
less from these payments than from their
previous jobs, when taking into account
non-wage compensation — including paid
leave, healthcare, and retirement.
The truth is, as economic policy expert
Lindsay Owens wrote in a recent piece,
“conservatives, and even some liberals, hate
the idea that unemployed Americans — and
particularly Black and brown unemployed
Americans — aren't being punished for not
working.”
And even as lifesaving as unemployment
benefits are, it’s little coincidence that
only 13% of Black people who are out of work
actually received unemployment benefits
between April and June. When Black people
do receive unemployment payments, they
tend to receive less aid than white workers
and tend to live in states with programs that
dispense lower unemployment payments
and have higher barriers to receiving them.
The extra $600 weekly unemployment
payments that could be authorized via the
CARES Act part 2 would be instrumental in
fixing some of the inequalities among state
programs.
We Can’t Return To a “Normal” That Doesn’t
Consider Black Americans
In August, President Trump signed a
series of executive actions, which included a
$300 supplemental unemployment benefit.
However, his plans have been widely and
rightfully panned as unworkable. Reduced
aid has strained millions of households financially,
especially those who were already
struggling. By the end of July, 29 million
adults lived in households that did not have
enough to eat in a week, and 15 million
renters were behind on rent. And for Black
households without wealth - nearly one in
five - will suffer disproportionately from
reduced aid.
As some look for a new normal, for
Black people, we can look at 2008’s Great
Recession to show that “normal” doesn’t
work for us. Black workers were slow to
return to pre-recession income levels due
to stagnant wage growth with wages rising
slower than the cost of living.
Even when Black workers returned
to pre-recession income levels, the racial
income gap persisted no matter the occupation,
industry, level of education or
geography. In 2017, the median net worth
for non-immigrant Black households in a
large American city like Boston was just $8,
whereas the median net worth for white
households in Boston was $247,500.
Economist Jared Bernstein, the former
chief economist to Vice President Joe
Biden (now President Elect), and I recently
proposed that the Federal Reserve track
and target the Black unemployment rate.
Racially disaggregated data would show how
racial groups are experiencing the economy
differently and would better inform the
Federal Reserve to account for race.
Federal Reserve Chair Jerome Powell
has noted that there are no rules to “mind
the [racial] gap” economically. While The
Federal Reserve is responsible for making
sure the unemployment rate is not too high
while at the same time the cost of living
is not increasingly too rapidly and it has
the power to adjust interest rates, which
impacts how businesses spend money and
purchases for consumers, like the interest
on home loans, race is not a factor.
To get a real picture of how America is
doing economically, we need legal language
barring Powell’s successors from targeting
too-high “natural rates” without considering
racial outcomes. This idea has
gained traction over the past few months
among policymakers and leaders including
President of the Atlanta Federal Reserve,
Raphael Bostic, Representatives Ayanna
Pressley and Maxine Waters, and Senators
Elizabeth Warren and Kirsten Gillibrand.
Today, millions are out of work with no
steady source of income; the income they
had in the form of federal aid has been significantly
cut by the Trump administration
and congressional Republicans; consumer
spending and GDP is down (even though the
wealthy keep getting wealthier); coronavirus
cases are on the rise, in part because
schools, colleges, and businesses across
the country have reopened; climate change
and other forms of environmental pollution
are devastating millions, particularly in the
South and the West; and people are under
threat by the government and emboldened
militia groups at protests across the
country.
As we face interlocking social, political,
and economic crises, now is exactly the right
time to push for bold, progressive change
that closes inequitable gaps and forecloses
racist outcomes.
This economy hasn’t been working for
most, but especially not for Black people.
We must build a stronger economy that can
withstand a multitude of crises especially
for Black workers who have historically
been left behind. We can course correct
one of the worst economic downturns in
U.S. history for all by deliberately improving
the economic outcomes of Black people and
ensure that we don’t resort back to business
as usual.
Janelle Jones is the Managing Director for Policy and
Research at Groundwork Collaborative (groundworkcollaborative.org).
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