Do Black Lives Matter to the Federal Reserve?
O’Neal is one of dozens of activists and policy experts traveling to Jackson Hole this week to urge the Fed against raising rates. The campaign, called Fed Up, includes some two-dozen unions,...
O’Neal is one of dozens of activists and policy experts traveling to Jackson Hole this week to urge the Fed against raising rates. The campaign, called Fed Up, includes some two-dozen unions, community groups, and think tanks, from the AFL-CIO to the Working Families Party. In Jackson Hole, organizers will deliver a petitiondemanding that the Fed rethink its plan to raise interest rates until the recovery can reach more Americans. Fed Up also plans to hold a series of teach-ins exploring questions like “How Do We Build a Fed that Works for Us?” and “Do Black Lives Matter to the Federal Reserve?”
While there’s only so much the Fed can do when spending on public investments and social programs is well below where it should be, the absence of fiscal support makes monetary policy that much more critical to promote a broadly shared recovery. At its core, the Fed Up campaign is about answering two questions, said Ady Barkan of the Center for Popular Democracy during a press call previewing the upcoming meeting: “Whose recovery is this?” and “Whose Federal Reserve is this?”
“I don’t think that those at the Fed know how life is here in south DeKalb County when they say that the economy is recovering,” O’Neal said during the call. O’Neal makes $8.50 an hour at the daycare center she works at in Atlanta. That’s not enough, she says, to cover rent, food, and utilities for her household, let alone the medication she needs to treat asthma and high blood pressure. “Our life is a constant struggle,” she says. “We have to decide whether, you know, are we going to buy meat, or are we going to buy medicine, or are we going to pinch off the electric bill this month?”
But, she emphasized, she’s hardly alone. “It’s also my neighbor. It’s also the person down the hall, my neighbor next door, around the corner. The whole community is suffering.”
The Atlanta area has been particularly hard hit by the financial crisis and weak economic recovery. In 2009, the Pew Hispanic Center named Metro Atlanta one of a handful of “distinct epicenters” of the nationwide foreclosure crisis. According to their report, less than 300 U.S. counties had foreclosure rates of more than 1.8 percent, and 19 of those counties, including DeKalb, are in Metro Atlanta. As elsewhere, the crisis had a particularly severe impact on black communities: All of the 19 counties Pew singled out as centers of the crisis are majority-black.
Since then, the weak recovery has in some ways only worsened inequities like this. In 2011, the unemployment rate for blacks in the Atlanta area stood at 14.4 percent, or twice the rate of their white neighbors. Three years later, black unemployment had dropped to 13.7 percent, but because joblessness among whites in Atlanta had fallen much faster, blacks were now nearly three times as likely to be jobless as whites. Today, DeKalb County has a poverty rate of 19 percent, well above the average for Georgia and the nation as a whole. And most of that poverty has been concentrated on the county’s majority-black south side.
But among black communities nationwide, DeKalb has actually fared relatively well. The area was hit hard by the downturn, but it remains the second-most affluent black-majority county in the country. By contrast, in Washington, D.C., a majority-minority city, black unemployment is a staggering 15.8 percent, more than five times the rate for whites, according to the Economic Policy Institute. Nationwide, after hitting its highest levels since the 1980s, black unemployment remains about double the rate for whites. The mortgage crisis and subsequent downturn destroyed a full 47 percent of black families’ wealth, and that wealth is far from recovered.
Despite that, the Federal Reserve seems perilously close to raising interest rates, possibly as soon as next month—a change that could have a disastrous effect on the already-weak recovery.
“We shouldn’t mince words,” said Barkan. “When the Federal Reserve raises interest rates, it is doing so in order to slow the economy down in order to prevent the economy from creating more jobs.” A slowdown like that would not only make it harder for the labor market to recover, but it also has a good chance of widening the gap in unemployment between blacks and whites. Historically, the joblessness gap between black and white workers tends to grow when the economy slows down.
But Fed officials remain stubbornly committed to a rate hike, even as instability grips the stock market this week. In a speech on Monday, following another day of market volatility, Atlanta Fed President Dennis Lockhart sought to allay suspicionthat the Fed’s plans to raise rates this year had changed. In June, 15 out of 17 senior Fed officials indicated that they’d like to see a rate hike this year, echoing a similar statement from March. As Lockhart put it in another speech on August 10, “The economy has made great gains and is approaching an acceptable normal.” Nowhere in his speech did Lockhart mention the poverty and racial inequality gripping communities just a few miles from the Atlanta Federal Reserve Bank he chairs.
For O’Neal, places like south DeKalb are very far from an acceptable normal. “When the Fed says that the economy is recovering and they want to raise the interest rates,” she said, “I look around and I don’t see recovery in my community.”
Unfortunately, plenty of Fed leaders don’t seem to think an unequal recovery is their responsibility to address. In testimony before Congress last month, Fed Chair Janet Yellen said that while black unemployment remains very high, “there really isn’t anything directly the Federal Reserve can do to affect the structure of unemployment across groups.”
But Barkan begs to differ. “We think that’s really a mistake,” he said. “A strong economy—more job growth and more wage growth—has a disproportionately positive effect on African Americans because of the racial disparities that exist in our labor market.” Keeping interest rates low is far from the only solution to racial inequality in the job market (and not even the only thing the Fed can do by itself), but it’s a good start.
Josh Bivens of the Economic Policy Institute, another Fed Up signatory, agrees.Because low-wage workers and workers of color tend to feel changes in unemployment much more dramatically, he said, keeping unemployment low should be the Fed’s first priority. “A policy that lets the unemployment rate get as low as it can possibly go without sparking inflation is one that’s going to have disproportionate benefits to workers of color,” he added.
Unfortunately, Barkan said, Fed officials have a long history of overlooking issues like racial gaps in unemployment and wealth. A big part of the problem is the central bank’s leadership, which is heavily skewed toward the banking sector. By law, 72 out of 108 directors of the Fed’s 12 regional banks must represent workers. But currently, just two officially do, compared with 91 who come directly from banks and financial institutions. “Of course when you have leadership like that you get policies that don’t advance the needs of American working families,” Barkan said.
Which is exactly why Fed Up plans to confront the central bank’s leadership today in Jackson Hole. In doing so, the coalition will help connect monetary policy and policymakers to the people and communities it most impacts.
And demanding that interest rates stay low is just a first step. During the conference, Fed Up will also present a report from PolicyLink on what a more equitable recovery would look like. The report explores how genuinely full employment—which has long been a core policy mandate for the Federal Reserve—would reshape our economy. The report defines full employment as no more than 4 percent unemployment for all groups and a labor-force participation rate no lower than 75 percent for men and 60 percent for women. (Currently, labor-force participation remains stuck at 69 percent for men and 56.7 percent for women, the lowest levels in decades.)
As Barkan and Bivens emphasized, a change like that would have a particularly dramatic impact on communities of color. In Atlanta, black unemployment would drop 10 percent while average household income would increase by 11 percent for black families. A full 175,000 people would be lifted out of poverty and the local economy would grow by $24 billion. Nationwide, the change would be just as dramatic. Genuine full employment would cut black unemployment by two-thirds and lift more than nine million people out of poverty.
It’s this kind of recovery that the Fed needs to begin thinking seriously about, said Barkan. The first step, he added, is to rethink how monetary policy is formulated and who gets a seat at the table.
Correction: In a previous version of this article, Dawn O'Neal's name was mispelled as O'Neil.
Source: The American Prospect
Workers Rising - The Report
Workers Rising: Organizing Service Jobs for Shared Prosperity in New York City
Something unique has happened in New York: a wave of low-wage worker activity. As is clear...
Something unique has happened in New York: a wave of low-wage worker activity. As is clear from this report, New York City is at a critical turning point: will the City be one where all working families can find stable, living-wage employment? Or will the entrenched inequality of the City worsen still further? This report captures the inspiring stories of low-wage workers who have put these issues in the spotlight, organizing for improved conditions in industries ranging from car wash to fast food to retail and beyond.
It is our hope that this report will help elevate the issues raised by these workers as New York prepares to elect a new City Council, a new Mayor, a new Public Advocate, and a new Comptroller to take office in 2014.
Download the report here
Executive SummaryAlthough New York’s economy has begun to recover from the Great Recession, working New Yorkers continue to face serious challenges.
Despite the significant rise in workers’ productivity over the past forty years, their wages have remained stagnant while those at the top of the economic pyramid have reaped nearly all of the benefits of our growing economy. When the recession hit in 2007, it exacerbated an already dire situation for working class and impoverished New Yorkers.
The City’s unemployment rate nearly doubled, from 5.3 percent in 2007 to 9.7 percent today. Real median income in the City fell nearly 8 percent, from $35,000 in 2008 to $32,200 in 2011. The percentage of New Yorkers who are poor rose from 18 percent to a staggering 21 percent. And twice as many people now are homeless in the City as were in 1992. Most striking of all, this widespread economic misery takes place amid unheralded wealth: according to formal measures,
Manhattan’s inequality is higher than all but one other county in the nation and approximately equivalent to that of Bolivia.
As troubling, the growing sectors of the New York City economy, such as the growing service sector, feature low-wage, no-benefit jobs, with little hope for upward mobility.
This is a familiar narrative. But the next act is inspiring and a cause for hope: 2012 was a year of unprecedented activity by low-wage workers in the service industry, including strikes, rallies, marches, and union organizing. New York’s service workers are rising and fighting back – as their predecessors did in the 1930s – against poor working conditions and poverty-level wages. Despite the real risk that speaking out may cost them their jobs, thousands of workers in New York City’s lowest wage industries are joining together to demand dignity on the job.
At car washes from Elmhurst to So-Ho and Jamaica to Mott Haven, immigrant car washers have voted to unionize. At fast food restaurants from Times Square to Fulton Street in downtown Brooklyn, protesting workers have made national news by taking on and striking some of the biggest employers in America. At flagship Fifth Avenue retail stores, cashiers are calling for an end to the part-time poverty that plagues the industry. And at JFK Airport, the men and women who keep millions of travelers safe have united to demand better training, higher pay, and health insurance so their families can be healthy and safe as well. These workers’ bold actions, sparked, we believe, by the energy and anger and hope of the Occupy movement, have amplified the call for change – and broadened it to make clear that this is a fight for all New Yorkers.
In this report, we take a closer look at the growing worker movements that are throwing a spotlight on abuse on the job and at the need to build an economy typified by stable, living-wage, dignified jobs. We also highlight critical policy changes that elected officials could implement that would address the plight of low-wage workers in the City, helping to turn low-wage, dead-end jobs into stable middle class employment opportunities. Raising the minimum wage is perhaps the most important reform that legislators can enact this year to improve standards of living for working-class New Yorkers. That power—and that duty—lies with the New York State Legislature. Raising the minimum wage would result in higher pay for more than one million New York workers. Indexing the minimum wage to inflation will raise consumer spending, help strengthen the economy, and create thousands of new jobs. Although a good first step, the reforms currently under consideration are insufficient. An increase in the minimum wage to $10 per hour would give full-time workers a salary of $20,000 per year and help to reduce poverty in New York City. At the very least, the Legislature should expand New York
City’s home rule power so that it can create a City minimum wage that reflects the higher cost of living here, as compared to upstate.
The New York City Council also has the power to reshape our economy in meaningful ways. Improving the jobs and lives of low-wage workers is not only an issue of justice, but also an issue of good economics. If low-wage jobs were to be transformed into middle class jobs, workers’ higher wages would allow them to spend more on local goods and services, giving a boost to the economy that our city’s neighborhoods could desperately use.
In 2013, New York City voters will elect a new mayor and fill every seat on the New York City Council. Over the coming four years, these elected officials will make critical decisions impacting the lives of millions of people. But our future is not in their hands. It is the politicians’ future that is in ours. Will our next mayor continue programs that deliver tax breaks and subsidies to large corporations that do not deliver on promised job creation? Will our next City Council finally pass key reforms – such as legislation to provide paid sick leave to the City’s workforce – that can improve the lives of low-wage workers and their children? Will New Yorkers and our elected officials build a City in which all working families can thrive? In large part, the answers will depend on the choices that elected officials and voters make over the coming year.
These are four sets of actions that the New York City government could take to improve life for low-wage workers:
First, the City should raise standards for low wage work by passing legislation to guarantee at least five days of paid sick leave for workers – such as the Earned Sick Leave Act – and to protect workers from erratic and unpredictable scheduling that keeps them in poverty – such as the Predictable Scheduling Act. Second, New York should regulate high-violation industries where wages are low and labor abuses are rampant by passing laws like the Car Wash Accountability Act and establishing an enhanced privilege permitting system at Port Authority airports. Such policies should impose new licensing or permitting requirements, tighten environmental and safety standards, and implement other tailored policies that increase oversight of the lowest-wage, highest-violation industries. Third, in order to ensure that these new rights make a meaningful difference in workers’ lives, the City should establish a Mayor’s Office of Labor Standards to educate employers about their obligations, investigate complaints by workers that employers are violating the law, and bring enforcement actions in particularly egregious cases. Fourth, New York City should pass a resolution urging the State to modify the City’s home rule authority so that the City can set a minimum wage that is higher than the state minimum, reflecting the high cost of living here.Minimum standards in the workplace have always been resisted by much of the business community. One hundred years ago, opponents said that prohibitions on child labor and basic workplace safety laws would harm consumers. In the 1930s, they said that minimum wage and hour laws would cost jobs. And throughout the civil rights era, they said that anti-discrimination laws would destroy free enterprise and the autonomy of business owners. But today these laws are indelible and uncontroversial features of our economy. The same can be true of paid sick leave, predictable and fair scheduling, and a living wage for everybody. When standards are raised and all businesses are required to take a higher road, New Yorkers will enjoy more broadly shared prosperity and a more just society.
We sit at a pivotal moment in New York City’s history. And as low-wage workers across the City have made clear with their growing movement for change, we must take this unique opportunity to build a City that provides opportunity and economic security for all New Yorkers.
Fed Rate Hike Threatens Jobs and Wages
12/16/2015
Statement & Booking Opportunity : Connie Razza, Director of Strategic Research for the Center for Popular Democracy (CPD) released...
12/16/2015
Statement & Booking Opportunity : Connie Razza, Director of Strategic Research for the Center for Popular Democracy (CPD) released the following statement in advance of the likely interest rate hike this afternoon:
“The presumption underlying the Fed’s decision today is that the economic recovery is nearing completion, a determination wholly at odds with the data on which the Fed is committed to depending. Inflation is well below the Fed’s own target and wages remain stagnant, yet Fed officials voted today to intentionally slow down the economy. Today’s announcement lays the foundation for unnecessary economic obstacles in the way of the tens of millions of working people across the country who deserve higher wages and better jobs, and particularly the Black and Latino communities still mired in a Great Recession. We urge the Federal Reserve to deliberate carefully in considering future increases.” The Fed Up campaign is bringing the voices of working families and communities of color into the national debate about Federal Reserve policy. In the past year, our members have met with 9 of the 12 regional presidents and 4 of the 5 sitting Governors, sharing with them the human realities that underlie the economic numbers. We are urging the Fed to fulfill both sides of its dual mandate and build an economy with genuine full employment, where everybody who wants a good job can find one. In the event that the Federal Reserve does not raise interest rates, you will receive another statement following the Fed’s announcement on Wednesday afternoon.
To schedule interviews with Connie Razza, send an email to ajain@populardemocracy.org
###
www.populardemocracy.org
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
Media Contact:
Anita Jain, press@populardemocracy.org, 347-636-9761
Sofie Tholl, stholl@populardemocracy.org, 646-509-5558
Yellen and Draghi Speeches to Highlight Jackson Hole Conference
Yellen and Draghi Speeches to Highlight Jackson Hole Conference
Central bankers and economists from around the world will gather in the mountain resort of Jackson Hole, Wyo., beginning Thursday for the Federal Reserve Bank of Kansas City's annual economic...
Central bankers and economists from around the world will gather in the mountain resort of Jackson Hole, Wyo., beginning Thursday for the Federal Reserve Bank of Kansas City's annual economic symposium.
The theme of this year's conference, "Fostering a Dynamic Global Economy, " highlights the challenges of boosting economic growth during an expansion that has been marked by poor productivity gains, rising protectionism and demands for greater fiscal austerity.
Read the full article here.
Protest Calls for Fed to Focus on Employment
St. Louis Public Radio - March 5, 2015, by Maria Altman - What recovery? That was the question being asked Thursday by a small group of activists outside the Federal Reserve Bank of St. Louis....
St. Louis Public Radio - March 5, 2015, by Maria Altman - What recovery? That was the question being asked Thursday by a small group of activists outside the Federal Reserve Bank of St. Louis.
About a dozen protesters called on the Fed to focus on unemployment, especially among minorities, rather than on keeping inflation rates low. They said if the Federal Open Market Committee raises the interest rate this year, as anticipated, it would likely mean fewer jobs.
"We’re calling on the Fed to do the right thing by most people, because the people they’re helping by changing the policy is a very small minority people and a very influential and affluent group of people," said Derek Laney of Missourians for Reform and Empowerment.
The protest was one of several held at Federal Reserve Banks around the country to highlight a new report by the Center for Popular Democracy and the Economic Policy Institute. The report calls on the Fed to focus on “full unemployment,” and highlights disparities between white and minority unemployment levels.
In Missouri last year the unemployment rate for African-Americans was 14.4 percent, while the rate for whites was just 5.1 percent, according to the Bureau of Labor Statistics. Several of the protesters, who represented a variety of local groups, including MORE, the Organization for Black Struggle, Veterans for Peace, Pro-Vote and Young activists United STL, had personal stories of being out of work and struggling.
Reginald Rounds with MORE said he had recently gotten a bachelor’s degree but still couldn’t find work.
"There is no recovery in the community in which I live," said Rounds. "I talked to many people in different organizations and churches throughout the city as we worked on the Don’t Shoot Coalition. It’s my personal belief that a lot of things that happened in Ferguson just boiled over from all the tensions of unemployment, job creation, housing and our educational system."
The Federal Reserve Bank of St. Louis said in an emailed statement that officials reached out to protesters on Wednesday and asked them to meet to discuss the report.
"The Fed has a dual mandate to keep inflation low and stable and to foster maximum sustainable employment. It takes these responsibilities very seriously," said Karen Branding, senior vice president of public affairs, in the statement.
Washington University economist Jennifer Dlugosz said the Fed has good reason not to focus too tightly on lowering unemployment levels.
"We know from macroeconomics that if the Fed tries to push the rate of unemployment below the natural rate, which people think is 5.5 percent, that it wouldn’t work and that it would just accelerate inflation," she said.
Dlugosz, who previously worked for the Fed’s Board of Governors in Washington, D.C., said monetary policy is not the right tool to address unemployment disparity. Instead, she said, targeting labor market and education policies to create more equality would likely have better results.
The report also took aim at the Fed’s transparency, especially in choosing the board of directors for each of the 12 Federal Reserve Banks. The protesters argued too many corporate and bank executives take those positions, including in the Federal Reserve Bank of St. Louis’ board of directors.
"It’s basically bankers, and that’s in the charter, and there’s whole bunch of other folks who could be from labor and working people, but are instead from big corporations," said Jeff Ordower of MORE.
The board of directors in each of the Federal Reserve districts is responsible for choosing the president of the Reserve Banks. Those presidents rotate onto the Federal Open Market Committee, which meets eight times a year and decides the nation’s monetary policy. (Learn more about how it all works here on the Federal Reserve Bank of St. Louis' website.)
In her statement, Branding said the Fed was designed by Congress to “represent the voice of Main St."
"At the St. Louis Fed we have significant dialogue with business leaders, community development organizations, educators and the public,” she wrote. “We have a diverse board of directors who are familiar with economic and credit conditions in the district.”
Professor Dlugosz said the make-up of the boards is somewhat limited by statute. Each district’s community bank members choose three bankers to sit on the board and three non-bankers. The other three directors are chosen by the Fed’s Board of Governors in Washington, D.C, and are supposed to represent a mix of labor, agriculture, industry, and consumers.
Dlugosz said the last group, known as “Class C,” is the most likely group to represent the interests of the public, since they’re appointed by the Board of Governors.
"That’s really, I’m guessing, the main place where you’re going to see heads of labor unions or consumer advocates. If they’re getting on there, I imagine it’s the Board that’s electing them," she said. "I don’t know if that’s changed over time, but one would hope that they’re keeping an eye on it."
Source
City-issued IDs give immigrants access as Trump tightens rules
New Haven, Conn., was the first city to issue a municipal ID in 2007 following the fatal stabbing of a 36-year-old undocumented immigrant while he cashed a check, according to a 2013 report by the...
New Haven, Conn., was the first city to issue a municipal ID in 2007 following the fatal stabbing of a 36-year-old undocumented immigrant while he cashed a check, according to a 2013 report by the Center for Popular Democracy on municipal ID programs.
Read the full story here.
It’s Time to Reimagine Safety and Security in Our Communities
It’s Time to Reimagine Safety and Security in Our Communities
The over-policing and mass criminalization of Black and brown people is the moral crisis of our time.
The United States has the world’s largest incarcerated population with approximately 2....
The over-policing and mass criminalization of Black and brown people is the moral crisis of our time.
The United States has the world’s largest incarcerated population with approximately 2.2 million people currently behind prisons and jails (21 percent of the world’s prisoners) while several police departments across the country are under investigation for charges of police brutality, gross misconduct and civil rights violations.
Read the full article here.
Facebook Founder Gives $20mm Donation On Hillary To Defeat Trump's "Fear And Hostility" Campaign
Facebook Founder Gives $20mm Donation On Hillary To Defeat Trump's "Fear And Hostility" Campaign
A few weeks back we noted how Bullard had questioned the intentions of ex-Facebook founder Dustin Moskovitz in funding the Center for Popular Democracy's Fed Up campaign (see "Why Is Facebook...
A few weeks back we noted how Bullard had questioned the intentions of ex-Facebook founder Dustin Moskovitz in funding the Center for Popular Democracy's Fed Up campaign (see "Why Is Facebook Funding "Anti-Fed" Activists"). The "Fed Up" group has mounted an aggressive effort to convince the Fed to keep rates ultra low noting they favor central banking policies that "are aimed at making sure lower income households and minorities share in the recovery to the same degree as the well off."
Ironically, Moskovitz, and his inflated FaceBook shares, are among the key beneficiaries of "ultra low rates" and not so much the poor and struggling people of this country. A fact that was not lost on St. Louis Fed president James Bullard. Per our previous post:
When it comes to Fed Up, "it's Facebook money," Bullard said. "I think it's kind of a funny thing for them to fund because they want low interest rates in an era where we are awash in low interest rates, so it's kind of crazy, isn't it?"
"I think that Dustin Moskovitz should be here, maybe he can helicopter in from Sun Valley or something instead of sending all these people, if he wants low interest rates. He could just come and argue about it," Mr. Bullard said.
Just a few short weeks later we now learn that the billionaire techie, and former college roommate of Mark Zuckerberg, is set to become one of the largest donors to the Democratic Party. According to CNN, Moskovitz will donate a total of $20 million to various Democratic organizations making him the 3rd most generous donor of this election cycle. But Moskovitz, at least if taken at his word, isn't really donating to elect Hillary as much as to defeat Trump saying that he wants to teach Republicans a lesson that by "supporting this kind of candidate, they compel people to act in response."
"This decision was not easy, particularly because we have reservations about anyone using large amounts of money to influence elections," Moskovitz and his wife, Cari Tuna, wrote in a post on Medium. "We hope these efforts make it a little more likely that Secretary Clinton is able to pursue the agenda she's outlined, and serve as a signal to the Republican Party that by running this kind of campaign - one built on fear and hostility?—?and supporting this kind of candidate, they compel people to act in response."
"Cari and I have dedicated our lives to figuring out how to do the most good we can with the resources we've been given. Until now, those efforts have not included making endorsements or contributions in presidential elections," Moskovitz wrote. "The Republican Party, and Donald Trump in particular, is running on a zero-sum vision, stressing a false contest between their constituency and the rest of the world."
But perhaps Moskovitz is less concerned about Trump spreading "fear and hostility" and more concerned about his recent comments suggesting that the only thing the Fed has created with "ultra low rates" is a "strong artificial stock market." Per CNN,
"They're keeping rates down because they don't want everything else to go down," the Republican presidential nominee told Reuters on Monday.
Trump said the "only thing that is strong is the artificial stock market."
"We have a very false economy," Trump told Reuters. "At some point the rates are going to have to change."
Sounds like someone is a little worried about bubbly tech markets?
By Tyler Durden
Source
This Small City Has a Plan to Fight the Silicon Valley Housing Crisis
This Small City Has a Plan to Fight the Silicon Valley Housing Crisis
For more than three months, Gabriela Mercado has crisscrossed Richmond, California, a working-class and immigrant city that sits on the eastern edge of the San Francisco Bay. She hits the streets...
For more than three months, Gabriela Mercado has crisscrossed Richmond, California, a working-class and immigrant city that sits on the eastern edge of the San Francisco Bay. She hits the streets, talks to strangers, and knocks on doors in support of an old-school solution to towering rents across the region. She is part of a coalition of workers, tenants, and progressive politicians pushing an initiative on the November 8 ballot that would create the first new rent-control law in California in nearly 30 years. Mercado says her commitment to the cause comes from personal crisis.
This article was produced in partnership with Local Progress, a network of progressive local elected officials, to highlight some of the bold efforts unfolding in cities across the country.
In early 2015, the owner of Mercado’s apartment complex increased tenants’ rent by as much as $200. It was frightening, she says. Many of the resident families made only minimum wage and couldn’t absorb the new costs. After an organizing drive and a partial rent strike, the increase was rolled back, but not completely. Mercado, who has worked at Chuck E. Cheese’s and as an office janitor, says she was forced to find additional income. Doing so meant she spent less time with her daughter.
“I am involved because of what we went through,” she says. “Because it is unjust what they did to us.” She wants rent control so her family “won’t have to worry about the rent suddenly going up again.”
At a time when the real-estate market is aflame with speculation, Richmond residents like Mercado are revitalizing tenants’-rights activism in the Bay Area. And they are no anomaly. On November 8, the small cities of Alameda, Mountain View, Burlingame, and San Mateo will also vote on ballot initiatives that could establish rent and eviction controls of varying stringency. Landlords, led by the powerful California Apartment Association (CAA), are determined to snuff out these efforts, and they have spent serious money on a counter-campaign. The initiatives, after all, could be the beginning of something significant. The state’s once-vibrant tenants’ movement, dormant for decades, finally seems ready to return to California politics and put its power on display.
Richmond’s rent-control drive comes in the midst of one of the most crushing affordable-housing crises in Bay Area history—a disaster comprised of cratering post-recession home-ownership rates and rocket-fueled rent increases, suspicious arsons and mass evictions, breakneck gentrification, and sprawling tent encampments huddled under highway overpasses. It started in Silicon Valley and San Francisco, where the tech boom first exploded, and soon seeped into surrounding cities like Oakland, Alameda, and others.
The dry data too suggest major social disruption. Since 2010, according to the San Francisco Chronicle, the average asking price of Bay Area rental units has increased by 66 percent, or approximately $1,000, to more than $2,500. San Francisco and San Jose are the two most expensive rental markets in the country, according to Zillow. Rent in Oakland, meanwhile, has spiked 71 percent in little more than three years.
People in Richmond also see the housing crisis coming their way, says Gayle McLaughlin, city councilwoman, former mayor, and Local Progress member. And they are determined to do something about it.
“Our residents are largely working-class, and our community cannot thrive and maintain itself with these kinds of rent increases,” says McLaughlin. “What I have seen happen and what will happen further is that people will be forced out—forced out of our city. They will be homeless, their kids will have to be taken out of schools, families will have to double up.”
McLaughlin’s political party, the Richmond Progressive Alliance (RPA), is well-known in the Bay for its bold policies and unlikely victories. It has waged high-profile electoral battles against Chevron, which owns a massive refinery in the city and is deeply involved in local politics. It has pushed for minimum-wage hikes and taxes on sugary drinks. It has vociferously resisted oil-by-rail shipments to regional ports. Now, as part of a broader community coalition, the RPA is fighting for rent control.
The RPA first pressed—and passed—a rent- and eviction-control ordinance in Richmond’s City Council in 2015, but it didn’t live long. The California Apartment Association torpedoed the law after rallying its troops, gathering signatures and using a petitioning procedure to block the ordinance’s implementation. RPA, and its partners, countered: They collected their own batch of signatures and got a rent-control initiative on this year’s ballot.
Because of state law, the initiative is constrained in scope. It will peg annual rent increases on units built before 1995 to the percentage increase of the Consumer Price Index, thus linking rent hikes to inflation. Any units built after that year will not be affected. The initiative also seeks to protect tenants from unjust eviction. If it passes, landlords will no longer be able to give tenants an eviction notice without cause. A rent board will be established to oversee enforcement.
Powerful people are opposed to the proposal, of course. Richmond Mayor Tom Butt has come out against it, calling it “poorly drafted.” The California Apartment Association meanwhile, is vigorously resisting the regional initiatives. According to Joshua Howard, a CAA senior vice president, the organization has spent at least $1 million on TV spots, radio ads, and the like to block rent control in the Bay Area.
“We want the voters to understand that we do face a crisis in Northern California and we do need to protect the diversity and character of our communities,” he says. “But these ballot measures do not address the underlying problem.” To truly fix the problem, he adds, more affordable housing must be built.
Gayle McLaughlin agrees with that last sentiment. New housing for “low-income and very low-income people” is desperately needed, she says. In the meantime, she argues that rent control will help clot the hemorrhaging of working-class residents. She also notes that rent regulation would be much more effective if California officials repealed the Costa-Hawkins Act of 1995, a landlord-backed state law that severely limits municipal authority over rent policy. The law bans rent control on buildings built after 1995, and also prohibits vacancy-control measures across the state, among other provisions.
In other words, if activists really want to make change it will have to take place at the state level. That, says Peter Dreier, an urban- and environmental-policy professor at Occidental College, will require a powerful tenants’-rights movement, like the one that thrived across the state in the 1970s.
“There’s a lot of anger and outrage about rising rents all over the state at the grassroots level, and there are a growing number of local groups trying to organize around it,” he says. “I would say the tenants’ movement is the sleeping giant of California politics.”
Thanks to relentless organizing in small cities like Richmond, the giant is starting to stir.
By Jimmy Tobias
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The Tragedy of Janet Yellen
In December 2012, a new Federal Reserve governor and unseasoned monetary policymaker, Jerome Powell, told his colleagues that the risks of continued stimulus likely outweighed the benefits. Vice...
In December 2012, a new Federal Reserve governor and unseasoned monetary policymaker, Jerome Powell, told his colleagues that the risks of continued stimulus likely outweighed the benefits. Vice Chair Janet Yellen, even then one of the most experienced policymakers in the Fed’s 104-year history, acknowledged the concerns but pushed back forcefully. She argued that “slow progress in moving the economy back toward full employment will not only impose immense costs on American families and the economy at large, but may also do permanent damage to the labor market.” In other words, if we don’t take risks now to get more Americans employed, the country might lose the opportunity to ever fully recover from the Great Recession. She reminded her colleagues of the promise they had made: “We communicated that we will at least keep refilling the punch bowl until the guests have all arrived, and will not remove it prematurely before the party is well under way.”
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