D-FW activists travel to annual Fed summit in Jackson Hole, Wyo., to spread their message
Lemlem Berhe is one of a handful of activists from the Dallas-Fort Worth area visiting Jackson Hole, Wyo., in hopes of...
Lemlem Berhe is one of a handful of activists from the Dallas-Fort Worth area visiting Jackson Hole, Wyo., in hopes of getting their message heard. That message: Raising interest rates now would stunt wage growth and hurt working families and communities of color.
“Fed officials think the economy has recovered enough to raise interest rates, slowing down job and business growth, but working families like mine in Dallas know otherwise,” Berhe said. “That’s why we’re in Wyoming this week, to ask them to prioritize job growth and higher wages.”
As part of the national FedUp Coalition, local members of the Texas Organizing Project and the Workers Defense Project are in Wyoming for the Federal Reserve’s annual summit, where the world’s most powerful central bankers discuss economic policies that affect people everywhere. The top U.S. banker — Fed chairwoman Janet Yellen — is not attending the event, which began Thursday and ends Sunday.
This is the first time anyone from either group has traveled to the Fed’s annual summit in Jackson Hole.
This year’s Jackson Hole Economic Policy Symposium comes as the Fed faces a difficult decision on when to start raising interest rates, rising debates on income inequality and wages, and worries about slowing Asian economies, most notably in China.
With the U.S. unemployment rate at 5.3 percent in July, some say it’s time to raise interest rates, which have been near zero for nearly seven years. Recently, some economists and one Fed banker have called for a delay given concerns about slower global economies.
On Friday, the organizing groups in Jackson Hole held a public demonstration and teach-ins on topics such as full employment and the selection process for regional bank presidents, with renowned Columbia University economist Joseph Stiglitz. Today, he wrote an op-ed column in the Los Angeles Times about why the Fed should not raise interest rates.
In addition, the Texas Organizing Project also made a second request in a video posted to its Facebook page and in a tweet to meet with Robert Steven Kaplan, the newly named president of the Federal Reserve Bank of Dallas, soon after he starts his new job on Sept. 8. Kaplan is attending the summit.
Kaplan will replace Richard Fisher, who retired in March after a decade leading the Dallas Fed. Last week, immediately after the regional bank named Kaplan, the Texas Organizing Project suggested he meet with some of its members in Dallas once he arrives.
Earlier this year, the group and the FedUp Coalition asked to meet with Dallas Fed board members to seek more openness and participation in the search process for Fisher’s replacement. Their request was denied, but a meeting was arranged with two bank officials. I wrote about it.
FedUp claims that full employment is when the nation’s unemployment rate is 4 percent or lower. If that was the case this year, the Dallas economy would be $19.9 billion stronger at $476.8 billion, it would have 204,300 more workers employed, which would mean 162,500 fewer people would live in poverty.
In addition to Berhe, two other Texas Organizing Project representatives in Jackson Hole are from Dallas: member Nayeli Ruiz, 21, and community organizer Kenia Castro.
The Austin-based Workers Defense Project has two D-FW representatives in Jackson Hole: AdanArostegui andElliott Navarro.
“We believe that our members should be involved and learn what the Fed does,” said Diana Ramirez, a community organizer for the Workers Defense Project in Dallas. “No one really knows.”
Source: Dallas Morning News
What Does Black Lives Matter Want?
On August 1 the Movement for Black Lives (M4BL), a coalition of over sixty organizations, rolled out “A Vision for...
On August 1 the Movement for Black Lives (M4BL), a coalition of over sixty organizations, rolled out “A Vision for Black Lives: Policy Demands for Black Power, Freedom & Justice,” an ambitious document described by the press as the first signs of what young black activists “really want.” It lays out six demands aimed at ending all forms of violence and injustice endured by black people; redirecting resources from prisons and the military to education, health, and safety; creating a just, democratically controlled economy; and securing black political power within a genuinely inclusive democracy. Backing the demands are forty separate proposals and thirty-four policy briefs, replete with data, context, and legislative recommendations.
But the document quickly came under attack for its statement on Palestine, which calls Israel an apartheid state and characterizes the ongoing war in Gaza and the West Bank as genocide. Dozens of publications and media outlets devoted extensive coverage to the controversy around this single aspect of the platform, including The Guardian, the Washington Post, The Times of Israel, Haaretz, and the St. Louis Post-Dispatch. Of course, M4BL is not the first to argue that Israeli policies meet the UN definitions of apartheid. (The 1965 International Convention for the Elimination of All Forms of Racial Discrimination and the 1975 International Convention on the Suppression and Punishment of the Crime of Apartheid define it as “inhuman acts committed for the purpose of establishing and maintaining domination by one racial group of persons over any other racial group of persons and systematically oppressing them.”) Nor is M4BL the first group to use the term “genocide” to describe the plight of Palestinians under occupation and settlement. The renowned Israeli historian Ilan Pappe, for example, wrote of the war on Gaza in 2014 as “incremental genocide.” That Israel’s actions in Gaza correspond with the UN definition of genocide to “destroy, in whole or in part, a national, ethnical, racial or religious group” by causing “serious bodily or mental harm” to group members is a legitimate argument to make.
The few mainstream reporters and pundits who considered the full M4BL document either reduced it to a laundry list of demands or positioned it as an alternative to the platform of the Democratic Party—or else focused on their own benighted astonishment that the movement has an agenda beyond curbing police violence. But anyone following Black Lives Matter from its inception in the killingtrayvonsaftermath of the George Zimmerman verdict should not be surprised by the document’s broad scope. Black Lives Matter founders Alicia Garza, Patrisse Cullors, and Opal Tometi are veteran organizers with a distinguished record of fighting for economic justice, immigrant rights, gender equity, and ending mass incarceration. “A Vision for Black Lives” was not a response to the U.S. presidential election, nor to unfounded criticisms of the movement as “rudderless” or merely a hashtag. It was the product of a year of collective discussion, research, collaboration, and intense debate, beginning with the Movement for Black Lives Convening in Cleveland last July, which initially brought together thirty different organizations. It was the product of some of the country’s greatest minds representing organizations such as the Black Youth Project 100, Million Hoodies, Black Alliance for Just Immigration, Dream Defenders, the Organization for Black Struggle, and Southerners on New Ground (SONG). As Marbre Stahly-Butts, a leader of the M4BL policy table explained, “We formed working groups, facilitated multiple convenings, drew on a range of expertise, and sought guidance from grassroots organizations, organizers and elders. As of today, well over sixty organizations and hundreds of people have contributed to the platform.”
The result is actually more than a platform. It is a remarkable blueprint for social transformation that ought to be read and discussed by everyone. The demands are not intended as Band-Aids to patch up the existing system but achievable goals that will produce deep structural changes and improve the lives of all Americans and much of the world. Thenjiwe McHarris, an eminent human rights activist and a principle coordinator of the M4BL policy table, put it best: “We hope that what has been created carries forward the legacy of our elders and our ancestors while imagining a world and a country profoundly different than what currently exists. For us and for those that will come after us.” The document was not drafted with the expectation that it will become the basis of a mass movement, or that it will replace the Democratic Party’s platform. Rather it is a vision statement for long-term, transformative organizing. Indeed, “A Vision for Black Lives” is less a political platform than a plan for ending structural racism, saving the planet, and transforming the entire nation—not just black lives.
If heeded, the call to “end the war on Black people” would not only reduce our vulnerability to poverty, prison, and premature death but also generate what I would call a peace dividend of billions of dollars. Demilitarizing the police, abolishing bail, decriminalizing drugs and sex work, and ending the criminalization of youth, transfolk, and gender-nonconforming people would dramatically diminish jail and prison populations, reduce police budgets, and make us safer. “A Vision for Black Lives” explicitly calls for divesting from prisons, policing, a failed war on drugs, fossil fuels, fiscal and trade policies that benefit the rich and deepen inequality, and a military budget in which two-thirds of the Pentagon’s spending goes to private contractors. The savings are to be invested in education, universal healthcare, housing, living wage jobs, “community-based drug and mental health treatment,” restorative justice, food justice, and green energy.
But the point is not simply to reinvest the peace dividend into existing social and economic structures. It is to change those structures—which is why “A Vision for Black Lives” emphasizes community control, self-determination, and “collective ownership” of certain economic institutions. It calls for community control over police and schools, participatory budgeting, the right to organize, financial and institutional support for cooperatives, and “fair development” policies based on human needs and community participation rather than market principles. Democratizing the institutions that have governed black communities for decades without accountability will go a long way toward securing a more permanent peace since it will finally end a relationship based on subjugation, subordination, and surveillance. And by insisting that such institutions be more attentive to the needs of the most marginalized and vulnerable—working people and the poor, the homeless, the formerly incarcerated, the disabled, women, and the LGBTQ community—“A Vision for Black Lives” enriches our practice of democracy.
For example, “A Vision for Black Lives” advocates not only closing tax loopholes for the rich but revising a regressive tax policy in which the poorest 20 percent of the population pays on average twice as much in taxes as the richest 1 percent. M4BL supports a massive jobs program for black workers, but the organization’s proposal includes a living wage, protection and support for unions and worker centers, and anti-discrimination clauses that protect queer and trans employees, the disabled, and the formerly incarcerated. Unlike the Democratic Party, M4BL does not subscribe to the breadwinner model of jobs as the sole source of income. It instead supports a universal basic income (UBI) that “would meet basic human needs,” eliminate poverty, and ensure “economic security for all.” This is not a new idea; some kind of guaranteed annual income has been fundamental to other industrializing nations with strong social safety nets and vibrant economies, and the National Welfare Rights Organization proposed similar legislation nearly a half century ago. The American revolutionary Thomas Paine argued in the eighteenth century for the right of citizens to draw a basic income from the levying of property tax, as Elizabeth Anderson recently reminded. Ironically, the idea of a basic income or “negative income tax” also won support from neoliberal economists Milton Friedman and Friedrich Hayek—although for very different reasons. Because eligibility does not require means testing, a UBI would effectively reduce the size of government by eliminating the bureaucratic machine of social workers and investigators who police the dispensation of entitlements such as food stamps and welfare. And by divesting from an unwieldy and unjust prison-industrial complex, there would be more than enough revenue to create good-paying jobs and provide a basic income for all.
Reducing the military is not just about resources; it is about ending war, at home and abroad. “A Vision for Black Lives” includes a devastating critique of U.S. foreign policy, including the escalation of the war on terror in Africa, machinations in Haiti, the recent coup in Honduras, ongoing support for Israel’s occupation of Palestine, and the role of war and free-trade policies in fueling the global refugee crisis. M4BL’s critique of U.S. militarism is driven by Love—not the uncritical love of flag and nation we saw exhibited at both major party conventions, but a love of global humanity. “The movement for Black lives,” one policy brief explains, “must be tied to liberation movements around the world. The Black community is a global diaspora and our political demands must reflect this global reality. As it stands funds and resources needed to realize domestic demands are currently used for wars and violence destroying communities abroad.”
Finally, a peace dividend can fund M4BL’s most controversial demand: reparations. For M4BL, reparations would take the form of massive investment in black communities harmed by past and present policies of exploitation, theft, and disinvestment; free and open access to lifetime education and student debt forgiveness; and mandated changes in the school curriculum that acknowledge the impact of slavery, colonialism, and Jim Crow in producing wealth and racial inequality. The latter is essential, since perhaps the greatest obstacle to reparations is the common narrative that American wealth is the product of individual hard work and initiative, while poverty results from misfortune, culture, bad behavior, or inadequate education. We have for too long had ample evidence that this is a lie. From generations of unfree, unpaid labor, from taxing black communities to subsidize separate but unequal institutions, from land dispossession and federal housing policies and corporate practices that conspire to keep housing values in black and brown communities significantly lower, resulting in massive loss of potential wealth—the evidence is overwhelming and incontrovertible. Structural racism is to blame for generations of inequality. Restoring some of that wealth in the form of education, housing, infrastructure, and jobs with living wages would not only begin to repair the relationship between black residents and the rest of the country, but also strengthen the economy as a whole.
To see how “A Vision for Black Lives” is also a vision for the country as a whole requires imagination. But it also requires seeing black people as fully human, as producers of wealth, sources of intellect, and as victims of crimes—whether the theft of our bodies, our labor, our children, our income, our security, or our psychological well-being. If we had the capacity to see structural racism and its consequences not as a black problem but as an American problem we have faced since colonial times, we may finally begin to hear what the Black Lives Matter movement has been saying all along: when all black lives are valued and the structures and practices that do harm to black communities are eliminated, we will change our country and possibly the world.
By ROBIN D.G. KELLEY
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John Williams named to take over key New York Fed president post
John Williams named to take over key New York Fed president post
Fed Up, a group of economists and former Fed officials, and other organizations have been critical of the selection...
Fed Up, a group of economists and former Fed officials, and other organizations have been critical of the selection process as well as the approach the central bank has taken to policy-making. "The NY Fed should go back to the drawing board and draw from the deep, diverse, and highly qualified list of candidates provided to it by the Fed Up coalition (as well as surveying the views of other public interest groups)," the Economic Policy Institute's Josh Bivens said in a recent statement. "This is too important a decision to make on institutional autopilot."
Read the full article here.
Business Notes: Maryland Among Locations That Could Host 2026 World Cup Games
Business Notes: Maryland Among Locations That Could Host 2026 World Cup Games
“Elected officials across the country are paying close attention to how Amazon and other corporations have responded to...
“Elected officials across the country are paying close attention to how Amazon and other corporations have responded to Seattle’s efforts to confront their affordable housing and homelessness crisis,” Sarah Johnson, director of Local Progress, a national association of progressive elected municipal officials, told the Times.
Read the full article here.
Occupy the Minimum Wage: Will Young People Restore the Strength of Unions?
The Guardian - January 26, 2014, by Rose Hackman - Alicia White, 25, defied the odds of a poor background by attending...
The Guardian - January 26, 2014, by Rose Hackman - Alicia White, 25, defied the odds of a poor background by attending college on a partial scholarship and going to graduate school. While she spends her days applying for jobs, the only work she has found so far is face-painting at children’s birthday parties.
“By going to college and graduate school, I thought I was insulating myself from being broke and sleeping on friends’ couches and being hungry again. The big, scary part is that I am going to end up where I was, but now I am going to be in that awful situation with $50,000 of debt,” White says.
White’s story is no exception. One in two college graduates are now either unemployed or underemployed. Millennials – even those from the middle class – are experiencing income inequality and America’s failed dream of upward mobility first-hand. The mismatch of college-educated young workers with low-wage, unskilled, precarious jobs is creating a new face of the once-dwindling American labor movement: young, diverse, led by millennials in their twenties and thirties, and fighting what they see as an unfair labor market. Their modest cause? Pushing for a higher minimum wage.
Because of too many young people interested looking for work, these millennials reason that the labor movement is the only way to address large-scale poverty and income inequality – starting with their own.
The "Fight for 15" movement is the most visible of these. Designed by the SEIU to raise the minimum wage from $7.25 an hour to $15 an hour, the effort has been driven by young activists. Last fall, the movement claimed its first legislative victory with residents in SeaTac, Seattle’s airport carrying suburb, voting to raise its minimum wage to $15 an hour.
“There’s more enthusiasm than there has been probably in our lifetime for this,” says Ady Barkan, a 30-year-old Yale Law graduate and staff attorney at the Center for Popular Democracy in New York, indicating that the "Fight for 15" movement is picking up where Occupy Wall Street left off. He calls it “part of a similar cultural moment”.
It doesn't hurt the movement that the difference in pay between unionized and non-union jobs is pronounced. The median weekly earnings of union members in 2012 was $943, compared to $742 for those not in a union, the Bureau of Labor Statistics said in its recently released annual survey of labor.
“The dismal prospects for young workers are underscoring the fact that you can’t rebuild an economy on low-wage jobs and that inequality has reached a point where it really is an existential crisis for America,” says Annette Bernhardt, UC Berkeley's visiting sociology professor, whose work has focused on the low-wage economy and inequality.
Demographically, even the modest interest millennials have shown in the labor movement recently is a reversal of decades of disinterest. Unions have been ageing out of the economy along with their members, with nearly one in six union members aged 55-64, according to the BLS. Amid other trends – offshoring, automation, the growth of a service-centered economy – the share of national income that comes from labor unionshas been steadily falling since the 1970s. Union membership is at its lowest point in recent memory, with only 11.3% of Americans in unions. Critics, including the Center for American Progress blame those trends for the decline of the middle class.
Membership in unions is low for millennials – with only 11% of union members falling in the 25-34 age group, compared to 16% for workers between 55-64 – but their political views tend to align with the labor movement. A Pew poll this June showed 61% of Americans 18-24 in favor of unions, with strongest support coming from women and minority groups.
Diversity is more evident in the newer labor movement among millennials, reflecting the dominance of black and hispanic workers in unions nationally.
Jose Lopez, 27, is an organizer who works with Make the Road New York, mobilizing fast food and car wash workers. His previous work within the same organization involved pairing up young community members and artists with local businesses to paint storefronts, raising awareness about police brutality and stop-and-frisk. Lopez plans on bringing the same type of creativity to mobilize people around issues of inadequate income and wage theft, he said.
Protestor Janah Bailey, 21, of Chicago, currently works two fast food jobs: one full-time at Wendy’s, which she says pays $8.25 an hour, and one part-time at McDonald’s, which pays $8.40. On one day last year, Bailey walked out on both jobs for strikes against low pay. She says $15 an hour would change her life “tremendously”, expecting she would only have to work one job to make ends meet and help support her family, and spend her newly acquired spare time on studying to open up her own business.
The persistence of low wages is also mobilizing millennials who have never known a healthy job market. David Meni, 20, says he has held down a plethora of unpaid positions, internships and temporary jobs since his sophomore year of high school. His George Washington University chapter of the Roosevelt Institute’s Campus Network recently joined other local organizations in successfully pressuring the Washington DC city council to vote for an increase in the minimum wage to $11.50 an hour by 2016 from its current level of $8.50 an hour – despite the opposition of large corporations including Walmart.
That is not to say that young people will revolutionize the labor movement immediately. Millennials have an uphill battle in turning around the decline of labor. Studies show that while millennials support unions, until now, they have rarely joined them, perhaps in the belief that their low-paying jobs were temporary.
That perception may be changing as it becomes evident that lower wages are likely to be the norm for a long time.
Many economists predict that low wages are likely to continue into 2014, as pressure continues from corporate executives eager to return profits to their shareholders – namely by keeping a lid on expenses like pay. In a research report this week, influential economist Jan Hatzius of Goldman Sachs directly ties the 6.5% rise of corporate profits to the nearly inert 2% growth of US wages.
"The bottom line is that the favorable environment for corporate profits should persist for some time yet, and the case for an acceleration in the near term is strong," Hatzius wrote. "Eventually, the pendulum will swing back in the direction of lower profit margins and higher wages, but this still looks fairly distant."
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If Black Lives Really Matter, We Gotta Stop Hitting Repeat
If Black Lives Really Matter, We Gotta Stop Hitting Repeat
There’s a black man. Police confront him. Police kill him, and we watch the video. There’s an investigation, protests...
There’s a black man. Police confront him. Police kill him, and we watch the video. There’s an investigation, protests and calls for justice. A community grieves, and we all hit repeat.
Alton Sterling, repeat. Philando Castile, repeat. Michael Brown, Eric Garner, Walter Scott, Willie Tillman, David Joseph, repeat, repeat, repeat.
I’m tired, y’all. I’m effing tired. I’m tired of hearing about these families who have lost fathers and sons, listening to simple platitudes about thoughts and prayers, or the pretzel-like explanations for how it’s all the dead guy’s fault.
And then nothing changes.
I welled up watching Sterling’s 15-year-old son break down and wail “I want daddy” at a news conference. Sterling was killed Tuesday while selling CDs and DVDs outside a store in Baton Rouge, Louisiana. The police say they were responding to a report of an armed man.
The tears spilled down my cheeks as I watched the video of Castile’s girlfriend, Diamond “Lavish” Reynolds, begging, “Please officer don’t tell me that you just did this to him. You shot four bullets into him, sir.” Meanwhile, Castile is slumped over, bleeding and with his arm at a terrible angle. These killings have to stop.
After watching the video of Sterling, one of my black high school friends role-played with his sons, ages 8 and 12, on how to respond if they are ever confronted by a police officer. He even had them lie down and simulate being handcuffed. Another friend talked about how she hated that she was scared her husband, a hospital administrator, or her 16-year old son could someday be gunned down by a police officer.
This morning I told my husband, “I’m glad we now live in a country where I don’t have to worry about our sons getting killed by the police.” I love America, but damn, these killings and the muted effort to change is gut-wrenching.
It feels like the country that my ancestors helped to build with blood, sweat and tears, the place that I call home and miss terribly now that I live in Norway, just doesn’t care about me or those who look like me. Me and my brothers are all criminals, mere statistics or people waiting to become a statistic.
Fixing this epidemic feels like such an insidious behemoth, but we can’t keep going like this.
It’s easy to grow numb to the drumbeat of bodies piling in the streets from guns, drugs and other societal ills. Believe me, I get it. I’d rather scroll through the images of Paris’ fashion week than see Castile’s blood drench his plain white tee.
But I can’t. That would be just like hitting repeat.
What can I do?
First, I won’t pretend to have the answers, but through the magic of the interwebs you can find some very pertinent and well-researched information. One that I especially liked was a report from the Center for Popular Democracy and Policy Link. The two non-profit advocacy groups developed 15 possible solutions to curb police brutality. The ideas include increased police training and funding, treating drug addicts and the mentally ill instead of incarcerating them, and my personal favorite: Make the policy makers see their own racism.
Look, let’s be honest. We all have -isms, we’re not proud of them because we know it’s wrong to judge people based on looks, money or education, but it happens, and refusing to recognize the elephant in the room helps no one.
Check out the link to the report for how to push for such changes.
I care, but I don’t have any free time
We are all busy people. Work, school, kids, friends, life, and there are only 24 hours in a day. However, you make time for what you feel is important. Are you all caught up on what’s going on with Olivia Pope? Have you binge-watched “Orange Is The New Black” or something else on Netflix? How about my “Game of Thrones” people? Yeah, so it’s all a matter of priorities.
You gotta do what works for you, but please, don’t just sit there and hit repeat.
By MELANIE COFFEE
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By The People: Promoting Democratic Participation Through Comprehensive Voter Registration
America suffers from disturbingly low voter registration and turnout rates. Almost 50 million eligible people were not...
America suffers from disturbingly low voter registration and turnout rates. Almost 50 million eligible people were not even registered to vote in the 2012 election, and another 12 million had problems with their registration that kept them from voting. What’s more, many of these millions were low-income, youth, and people of color, all of whom are less likely to be registered. In order to strengthen our democracy, the United States must take dramatic and innovative steps to remedy our anemic voter turnout and registration.
“By the People: Promoting Democratic Participation through Comprehensive Voter Registration,” identifies Automatic Voter Registration (AVR) as the critical transformative policy that can result in the registration of millions of new voters. By shifting the responsibility of voter registration from the individual to the government, AVR ensures a more robust democracy. Automatic Voter Registration should be part of a suite of reforms including pre-registration of 16- and 17- year olds, portable registration, and other policies that make election administration more efficient.
Download the full report here
America's employment problem isn't in manufacturing
America's employment problem isn't in manufacturing
President Donald Trump has vowed to bring back manufacturing jobs to the U.S., but there's another major industry that'...
President Donald Trump has vowed to bring back manufacturing jobs to the U.S., but there's another major industry that's not only already larger but creating more economic problems for its workers: retail.
Read the full article here.
Schumer retira oferta sobre muro fronterizo de negociaciones sobre “DACA”
Schumer retira oferta sobre muro fronterizo de negociaciones sobre “DACA”
“Se sienten muy traicionados porque los demócratas habían hecho una promesa muy específica… no hay ninguna garantía, y...
“Se sienten muy traicionados porque los demócratas habían hecho una promesa muy específica… no hay ninguna garantía, y sabemos que la estrategia de votar por el Dream Act como una ley separada ha fracasado año tras año, no es una promesa que se traduce a un alivio para los Soñadores”, explicó Ana María Archila, del grupo Centro para una Democracia Popular.
Lea el artículo completo aquí.
The Actions of the Federal Reserve Bank Have Created an Economy That Hurts Workers And Has Devastated The Black Community
Atlanta Black Star - March 4, 2015, by Nick Chiles - The actions of the Federal Reserve have typically been undertaken...
Atlanta Black Star - March 4, 2015, by Nick Chiles - The actions of the Federal Reserve have typically been undertaken to benefit banks and the financial services sector collectively known as Wall Street, but a new report by the Center for Popular Democracy reveals that the Fed’s traditional policies substantially contribute to the dire economic conditions of African-Americans across the country.
While there have been many reports showing how badly African-Americans suffered from the Great Recession and how middle and low-income Americans have not benefitted from the so-called economic recovery, which was really just a recovery for Wall Street, this report is one of the first to link the fortunes of specific groups like African-Americans to the actions of the Federal Reserve.
The Federal Reserve, the nation’s central bank, remains a shadowy presence to most rank-and-file Americans, who would hardly think of the Federal Reserve when assigning blame for their financial struggles.
The intentions of the Center for Popular Democracy, with assistance from the Economic Policy Institute, are clear just by reading the name of its 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.”
In the explanation for the report’s rather trite title, the primary author, Connie M. Razza of the Center for Popular Democracy, said Martin Luther King Jr. Boulevard refers to African-American communities because “hundreds of U.S. cities have streets named for Martin Luther King Jr., often located in persistently lower-income Black neighborhoods.”
The report’s premise is that the Fed’s goal of keeping the national employment rate at about 5.2 percent—which the Fed considers “full employment” because it allows for movement in the job market—is actually devastating to the African-American community. The reason: When the national unemployment rate stays in the vicinity of 5.2 percent, the African-American unemployment rate is typically about 11 percent.
But because the Fed is dominated by the interests of Wall Street, the impact of its policies on Main Street or on African-Americans is not ever truly considered.
“Although the Great Recession officially ended nearly six years ago, the American economy is still far from healthy,” the report states. “Wall Street has had a robust recovery. Large corporations are making record profits. But the labor market remains weak.”
As Razza points out, the policy decisions of the Federal Reserve directly affect Main Street and MLK Blvd. The Fed’s primary job is keeping inflation stable, regulating the financial system, and ensuring full employment. But corporate and finance executives generally want to limit wage growth so that they maximize their future profits.
“But most people in America earn their living from wages, not capital income, and it is in their interest to see full employment whereby wages grow faster than prices in order to lift working and middle-class families’ living standards,” Razza writes.
Typically the Feds resolve this dilemma in favor of Wall Street, by intentionally limiting wage growth and keeping unemployment excessively high.
“The Fed’s policy choices over the past 35 years have led to increased inequality, stagnant or falling wages and an American Dream that is inaccessible to tens of millions of families—particularly Black families,” the report says.
As detailed in the report, the last eight years have been catastrophic for the nation’s African-American community in virtually every financial indicator studied by economists:
* In January 2015, the national African-American unemployment rate was 10.3 percent, more than twice the current white unemployment rate and higher than the 10.0 percent U.S. unemployment rate reached in October 2010, at the height of the recession.
* The contraction in public-sector jobs—which are disproportionately held by Black people and women—has meant that the African-American workforce has been disproportionately impacted by the recession. In 2011, the number of African-Americans who were unemployed and had most recently been employed in state or local government was higher than their share in the decline of state and local government job loss, suggesting that they were disproportionately laid off and faced more barriers to finding work after losing their public-sector jobs, according to the report. The loss of public-sector jobs also has potential implications for wage inequality since African-Americans and women who are employed in public service have historically suffered significantly less wage inequality than their peers in the private sector.
* Wages have been stagnant or falling for the vast majority of workers since 2000, the report states. While at the median, wages for white workers have risen only 2.5 percent in 14 years, African-American workers have seen a wage cut of 3.1 percent over the same period. In fact, in two-thirds of the states for which data are available, the median real wages of African-American workers declined between 2000 and 2014. The fastest declines were in Michigan (down 15.8 percent), Ohio (down 13.7 percent) and South Carolina (down 11.6 percent).
* Between 1989 and 2001—a period of comparatively robust job growth and a tight labor market during the late 1990s—the wealth gap between whites and African-Americans narrowed. In 2001, Black households had roughly 16 percent the wealth of white households, compared with 6 percent in 1989. By 2013, median African-American household wealth was only 8 percent that of whites.
The report states that the wealth disparity began growing during the housing boom, precisely because of the racist practices of American banks. Between 2004 and 2007, at the height of the boom, white household wealth increased 23 percent, while African-American household wealth actually declined by 24 percent.
“The convergence of wage stagnation and banks’ preying on African-American communities with risky mortgage products (which banks backed with overvaluations of collateral property), led to African-American borrowers being more likely to receive subprime loans than white borrowers,” the report says. “These loans were frequently made as second mortgages, drawing down equity that homeowners had built up. Discriminatory subprime lending practices drained wealth from African-American homeowners before the recession and certainly made Black wealth significantly more vulnerable during the housing crisis.”
One of the most telling statistics in the report is the detailing of the jobs that the economy has regained during the recovery. If the public needed a clear indication of why so many people are still struggling though Wall Street is back, here it is:
While lower-wage industries accounted for 22 percent of job losses during the recession, they account for 44 percent of employment growth over the past four years. That means lower-wage industries today employ 1.85 million more workers than at the start of the recession.
Mid-wage industries accounted for 37 percent of job losses, but 26 percent of recent employment growth. There are now 958,000 fewer jobs in mid-wage industries than at the start of the recession.
Higher-wage industries accounted for 41 percent of job losses, but 30 percent of recent employment growth. There are now 976,000 fewer jobs in higher-wage industries than at the start of the recession.
And here’s another startling fact showing how much America’s economy has been tilted in favor of corporate America and against workers for a generation. Between 1948 and 1973, the hourly compensation of a typical worker in America grew in tandem with productivity. But since 1973, productivity grew 74.4 percent while the hourly compensation of a typical worker grew just 9.2 percent.
“This divergence between pay and productivity growth has meant that workers are not fully benefiting from productivity improvements,” the report says. “The economy—specifically, employers—can afford much higher pay, but is not providing it.”
So what should the Fed do to help Main Street and MLK Blvd. begin to enjoy the economic “recovery?” The report suggests a change in the structure of the Federal Reserve System so that fewer representatives from the financial industry and corporate America are appointed to the Fed’s governing board and more regular people are added. This would make the Fed more sensitive to the needs of Main Street and MLK Blvd., so that “the voices of consumers and working families can be heard.”
The Center for Popular Democracy suggests that the Fed keep interest rates low “so that the numbers of job openings and job seekers are balanced and everybody who wants to can find a good job.”
In addition, it wants the Feds to provide low- and zero-interest loans so that cities and states can invest in public works projects like renewable energy generation, public transit and affordable housing that will create good new jobs.
The Fed should study the harmful effects of inequality, according to the Center, and examine how policies like raising the minimum wage and guaranteeing a fair work week can strengthen the economy and expand the middle class.
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2 months ago
2 months ago