CPD IN THE NEWS

International Business Times - March 8, 2014, by Aaron Morrison - Cyril Darensbourg has been unemployed for 10 years. As shocking as he knows that sounds to those who don’t know him personally, the 48-year-old native of New Orleans had enjoyed a 15-year career managing restaurants in Chicago and New York, after taking a chance on a dream and ending his third year of studying electrical engineering in Louisiana. Years of job-application submissions and temporary work here and there has persisted for far too long. Darensbourg is one of close to 2 million African-Americans in the U.S. who are currently unemployed and looking for work.

Across the American economy, the dominant story during the past several months has been a sustained recovery that resuscitated a dormant job market and the accompanying unemployment rate that has plunged below pre-Great Recession levels. But if better days are here for many workers, this feeling is shared to a lesser degree by African-Americans, whose unemployment rate is still considered high and has long been double the rate for whites. Among black working-age people, however, the unemployment rate since February 2014 has dropped more quickly than among nonblack workers.

On the surface, that improvement should signal a triumph, but it is accompanied by an asterisk, given the fact that nonblack workers’ unemployment rates fell much earlier and faster during the recovery. Government data indicates recent job creation has been less beneficial to African-American workers when compared with whites, Asians and Hispanics: Basically, blacks had more ground to make up and their labor-force representation is skewed toward lower-wage industries in which there are higher turnover rates, one study found.

These clear-cut differences mean that for people such as Darensbourg, who have been out of work for periods of several months or several years, other factors exaggerate the length of their unemployment. Many African-Americans find it hard to dismiss completely the role that race plays in their difficulty finding work, even with federal laws making discrimination illegal. Studies have found that even when black applicants possess qualifications that are on par with white applicants, variables as simple as their names or as complex as the breadth of their professional networks can many times hold them back.

“I’ve never felt secure, in my entire adult life working,” said Darensbourg, who is now married with two kids and living with his family in a New York apartment. After the 9/11 terrorist attacks in 2001 eliminated his management-level job at a restaurant located within the no-traffic zone, he was forced to look for work in other restaurants, which he said wouldn’t pay him at his previous annual salary of nearly six figures.

“I’ve been in disbelief,” said Darensbourg, a 6-foot-5-inch, 220-pound man who is often told his presence is at worst intimidating and at best unforgettable. During an interview for a job he was certain he would get, he recalled feeling his younger, white, female interviewer was put off by his size and confidence. “Over time, I didn’t know what to do,” he said of the experience.

“People in my situation are giving up. They are just adapting their lives to where they are. I’m not thinking about trying to buy a home or going on vacation. I don’t know how retirement is going to work,” Darensbourg said.

Unemployment Among Blacks Still High

In February, the unemployment rate for African-Americans was 10.4 percent, while the comparable rates for whites, Hispanics and Asians were 4.7 percent, 6.6 percent and 4.0 percent, in that order, according to data released by the U.S. Bureau of Labor Statistics Friday. The national unemployment rate was 5.5 percent last month. Last year, 23.7 percent of those who are black and unemployed had attended some college, 15.4 percent had bachelor’s degrees and 4.5 percent had advanced degrees.

A 2014 study by the Young Invincibles, a nonpartisan education and economic opportunity advocacy group, found an African-American college graduate has the same job prospects as a white high-school dropout or a white person with a prison record. The study attributed the gap to racial discrimination.

The experience of joblessness for African-Americans can have a lasting effect on their economic mobility, according to the Center for Popular Democracy, a liberal think tank in New York that released a report on black unemployment this week. It was prepared with the technical assistance of the nonpartisan Economic Policy Institute in Washington. On an hourly basis during the past 15 years, black workers’ wages have fallen by 44 cents, while Hispanic and white workers’ wages have risen by 48 cents and 45 cents, respectively, according to the report. Black wealth has also shrunk, while Hispanic and white wealth has stabilized.

Since March 2010, black employment climbed by about 2.3 million jobs, a 15.0 percent increase, and the black employment-population ratio rose to 54.8 percent from 52.0 percent, according to government data. Over the same period, white employment climbed by about 3.8 million jobs, a 3.4 percent increase, and the employment-population ratio rose to 60.1 percent from 59.5 percent. Because whites had less ground to make up, the increase for blacks, while statistically significant, still wasn’t large enough to suggest that they reaped more than a modest share of the gains in the economic recovery.

Most jobs that came back during the recovery, close to 45 percent, were lower-wage jobs, such as those in the retail and service industries, according to the Center for Popular Democracy’s report. Those industries employ 1.85 million more workers today than they did at the beginning of the recession. The data indicate African-American representation is skewed toward the lower-wage end, rather than toward either the mid-wage range or higher-wage end, where fewer jobs came back.

The center said the U.S. Federal Reserve’s recovery initiative to stimulate job creation through its monetary policies has been most beneficial to workers in higher-wage industries and to workers in regions of the U.S. where those jobs exist, such as on Wall Street. Even with the apparently gloomy outlook, economists say things are improving for black job seekers. “The economic recovery is finally beginning to take hold,” said Valerie Wilson, the director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy. “The rate of growth that we’re seeing now, this has only been happening for a year.”

Economists have stressed the Fed’s focus should be on genuine full employment. That’s been President Barack Obama’s argument for addressing joblessness among all Americans. But critics have said this approach ignores structural reasons -- lower educational attainment and higher rates of criminal convictions -- for African-American joblessness that is more prone to fluctuation than whites. “Assuming that monetary policy continues to function in a way that allows the recovery to proceed, the prospects for finding a job should improve for African-Americans,” Wilson said.

Education Can Make A Difference (Usually)

African-Americans who have achieved higher-education degrees -- a key investment leading to the middle class -- still find themselves more likely to face long-term unemployment than their white, Hispanic and Asian counterparts. According to the Center for Popular Democracy’s study, the only proven solution to this problem are those Fed programs that ideally stimulate job creation for workers of all experience and skill levels. But that still has not been robust enough to help the broadest swath of African-American workers.

Tamica Thompson said she could use preferential hiring consideration, although she didn’t believe she needed it before her long-term unemployment set in. Thompson’s difficulty in finding a job puzzles her. A 30-year-old born to Jamaican immigrants in New York, Thompson joined the U.S. Army in 2002, right after she graduated from high school. She was stationed in South Korea, and left active duty four years later to earn a bachelor’s degree in health-service management from Berkeley College in New York. She later obtained a master’s degree in public administration from Pace University in New York.

But even with those credentials and her military experience, Thompson has struggled to find a job that values her skill set. When she did interview for a promising job at a nonprofit development corporation -- for which the hiring manager told her she was the sole applicant -- she later discovered the position was given to someone else. She also worried that the formatting of her paper resume, which received a harsh critique from a job-placement counselor, was a factor in the length of her unemployment.

“I was unemployed for a good eight months until I found myself here,” Thompson said, referring to a stipend-supported internship for Operation: GoodJobs, a work-placement program run by the Goodwill Industries for Greater New York and Northern New Jersey, an initiative that helps military veterans and their families find jobs and training opportunities. The irony of her current situation is not lost on Thompson, who works to help other veterans find jobs while she scrapes by on the stipend. “Because I was not working, I was getting behind on my rent. I couldn’t do even the simple things anymore. Money was so limited for me. That caused me to be depressed, sad and angry. It’s a little better now, but I’m still struggling,” she said.

Race And Class Are Factors In Unemployment

Despite federal laws protecting women and racial minorities from discrimination by employers, several studies point to racial prejudices and favoritism as big contributors to how blacks fare in the job market. A 2004 study by the American Economic Review found job seekers with resumes that had so-called white-sounding names received 50 percent more callbacks for interviews. Names such as Jamal or Lakisha or others that are perceived as black-sounding names, received fewer callbacks. That racial gap is uniform across occupation, industry and employer size, researchers found.

Another study, conducted by the business school at Rutgers University in New Jersey, found that favoritism, or the race of the hiring manager, was a contributing factor to racial disparity in the workplace as well. The prevalence of a mind-set in the U.S. that the rich worked hard for everything they have and poor haven’t toiled enough certainly doesn’t help matters, said Sam Brooke, an attorney with the Southern Poverty Law Center, a nonprofit organization based in Montgomery, Alabama, that tracks racial disparity and hatred. “There’s a deep, fierce resistance to setting aside that idea,” Brooke said. “That’s an incredibly valuable part of the story that we tell about America. If you view it just through that lens, it’s hard to see how we’ll overcome” the disparities, he said.

The Civil Rights Act of 1991 made changes to a law passed in the 1960s that protected workers from intentional employment discrimination based on race, sex, religion and national origin. It also provided monetary damages in cases of proved discrimination. But few cases are won in U.S. courts, and a comparatively small proportion are resolved by settlements, according to federal data.

Darensbourg, the unemployed former restaurant manager, hasn’t considered a lawsuit against a prospective employer, even when he suspected that there was something more to its rejection of him than his qualifications. “I’m pushing my kids to do way better than I did in school,” he said. “I can’t pay for them to go to school. I don’t know how that would happen unless they got a scholarship. I tell my daughter that she is not just competing with the kids at her school; she’s competing with the whole world. I try to have them see stuff that my parents didn’t show me.”

Source

It can have a chilling impact on the introduction of policies that have the potential to be pre-empted,”  said Sarah Johnson, director of Local Progress, which was involved in advocating for the legislation. But Austin decided to take a different approach. The city “realiz[ed] their power and [fought] back and [went] on offense despite that.

Read the full article here.

This is where Fed Up played an incredible role. They were a crucial voice on the other side, constantly reminding the Fed of its legal mandate to promote full employment. Fed Up had important allies in this effort, most importantly former Fed chair Janet Yellen, but it is likely that Yellen and her allies on the FOMC would have been forced to raise rates sooner and faster if not for pressure from Fed Up.

Read the full article here.

Around this time last year, as another white male took the reins at the Federal Reserve Bank of Philadelphia, the Fed’s archaic and opaque system of choosing its regional presidents started to come under fire. At first the criticism was over the way the system appeared to favor insiders. Patrick Harker, at the time the new Philadelphia Fed President, had sat on the regional Fed board that was tasked with filling that position. Later that summer the Dallas Fed would name Robert Kaplan, who is also white, as its president despite the fact that he was a director at the executive search firm that that regional Fed board hired to find candidates. When the Minneapolis Fed named Neel Kashkari its president later in 2015, groups like the Fed Up Coalition pointed out that while he was the only non-white regional president, he, like Harker and Kaplan, had former ties to Goldman Sachs.

Since these presidents have rotating votes on U.S. interest rate policy, many saw the selections as a critical failure to reflect the country’s diversity of gender, race and background. As it stands, 11 of the 12 regional Fed presidents are white, 10 of them are male, and none are black or Latino. Fed Up, a network of community organizations and labor unions calling for changes to the central bank, also points out that there has never been a black regional president in the Fed’s 102-year history.

To be sure, the central bank was set up in 1913 in this decentralized way to check the power of the Washington-based Fed Board, whose seven governors are nominated by the U.S. President and confirmed by the Senate in public hearings and votes. The Fed presidents scattered around the country, meanwhile, are quietly chosen by their regional directors (usually corporate, industry and civic heads) and then, again with little or no public input or transparency, approved by the Fed governors after a series of private interviews with them in Washington. All 12 presidents had their terms extended earlier this year.

So the stage was set on Tuesday for Senator Elizabeth Warren, the Massachusetts Democrat who some see as a potential running mate for U.S. presidential candidate Hillary Clinton, to make a point about diversity at the Fed while making things rather uncomfortable for Fed Chair Janet Yellen, who was testifying before the Senate Banking Committee – and who, it may be noted, is the first woman to lead the central bank:

Warren: “Does the lack of diversity among the regional Fed Presidents concern you?”

Yellen: “Yes, and I believe it is important to have a diverse group of policymakers who can bring different perspectives to bear. As you know, it’s the responsibility of the regional banks’ Class B and C directors to conduct a search and to identify candidates. The (Fed) Board reviews those candidates and we insist that the search be national and that every attempt be made to identify a diverse pool of candidates…”

Warren: “The Fed Board recently re-appointed each and every one of these presidents without any public debate or any public discussion about it. So the question I have is, if you’re concerned about this diversity issue, why didn’t you take (any) of these opportunities to say, ‘Enough is enough, let’s go back and see if we can find qualified regional Fed presidents who also contribute to the overall diversity of the Fed’s leadership’?”

Yellen: “We did undertake a thorough review of the re-appointments of the performances of the presidents. The Board of Governors has oversight of the reserve banks, there are annual meetings between the Board’s bank affairs committee and the leadership of those banks to review the performance of the presidents, and there were thorough reviews of…”

Warren: “But you’re telling me diversity is important and yet you signed off on all these folks without any public discussion about it. I appreciate your commitment to diversity and I have no doubt about it. I don’t question it. It just shows me that the selection process for regional Fed presidents is broken because the current process has not allowed you and the rest of the Board to address the persistent lack of diversity among the regional Fed presidents. I think that Congress should take a hard look at reforming the regional Fed selection process so that we can all benefit from a Fed leadership that reflects a broader array of both backgrounds and interests.”

As it happens, Clinton said last month that she, too, supports an ongoing push by Warren and other liberal members of Congress to exclude bankers from the regional Fed boards and to make the central bank more diverse.

By Jonathan Spicer

Source