Improving Obama's stimulus plan

Current economic conditions call for massive federal investment in the economy. Thankfully, President Obama is aware of this fact. But there is some debate as to whether his plan will make a big enough dent in the expected job losses.

What else could Obama do to stimulate the economy? What projects could he add to increase the size of the plan? See some ideas here.


Back to the 1980s? Let’s Hope Not.

The December unemployment rate for the nation as a whole was 7.2 percent. This rate is a 16-year high. Rightly, many people view this level of unemployment as a national emergency. In December the black unemployment rate was 11.9 percent. If 7.2 percent is an emergency, what should we call 11.9 percent?

Since 1972, when the Bureau of Labor Statistics began tracking the black unemployment rate, only once has the black unemployment rate been lower than 7.2 percent—only once in almost 40 years. In March of 2000 the black unemployment rate was 7 percent, the lowest level on record, and still in emergency territory by my measure. In the great economic year of 2000, the economic condition of black America was still critical by national standards.

The good economy days of 2000 are long gone. Without an effective federal stimulus, the Economic Policy Institute, an organization I work for, forecasts that by next year the national unemployment rate will reach 10.2 percent and the black unemployment rate 18.2 percent. For black teens, the projected unemployment rate is 55.7 percent.

The last time blacks faced such a dire jobs crisis was in the early 1980s when the country experienced back-to-back recessions in 1980 and 1981. The black poverty rate spiked upwards. The crack cocaine economy and its attendant deaths and disorder spread through black communities. By the end of the 1980s, teen pregnancies increased. Black educational progress stalled.

Will an 18.2 percent black unemployment rate produce similar results in the 2010s? Let’s not try to find out.

President-elect Obama’s economic recovery plan so far looks good, and it just might keep us from returning to the unemployment rates of the early 1980s. Even if we were not in the middle of a deep recession, we would need many of the investments he is calling for to strengthen the U.S. economy. In a sense, it is great that the recession might force us to make many of the infrastructure and other investments that we have been putting off.

Although some people are shocked at the price tag of the economic recovery plan, the real worry from my standpoint is whether the plan is big enough. According to the projections [PDF] from Obama’s economic advisors, with the stimulus, the national unemployment rate will be about 8 percent in 2009. That level of unemployment would translate to about a 14 percent black unemployment rate. That rate of unemployment still paints an ugly economic picture for black America.

Further, the projections from Obama’s advisors might be too optimistic. Without the stimulus, they see the national unemployment rate peaking at 9 percent. My organization and others expect the peak without stimulus to be higher. If the Obama estimate is too low, even with the stimulus we could experience a black unemployment rate above 14 percent.

In the best economic times, black America needs a recovery and reinvestment plan. Faced with one of the worst economic downturns since the Great Depression, blacks desperately need it.


How Successful Are Black Immigrants?

Algernon Austin presents an excellent, concise, and wonderfully read scholarly examination of the complicated landscape of race, class and popular perception. Besides the prison industrial complex, black strides in education, poverty rates, crime and other indices contradict claims that blacks are “moving backward.”
--Jeffrey O. G. Ogbar, Director, Institute for African American Studies, University of Connecticut and author of Black Power: Radical Politics and African American Identity (The Johns Hopkins University Press), 2004 and Hip-Hop Revolution: The Culture and Politics of Rap (University Press of Kansas), 2007.

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Proponents of "model minority" stories about black immigrants always fail to compare black immigrants to white immigrants and to U.S.-born whites. When this comparison is done the picture changes dramatically. Two recent reports allow us to make these comparisons.

In the Fiscal Policy Institute's report Working for a Better Life, the researchers provide the wages of U.S.-born and foreign-born workers in New York City by race (p. 32). The figure below shows that among workers with a high school degree foreign-born whites earn significantly more an hour ($14.28) than foreign-born blacks ($12.39). Among workers with a college degree, both groups earn about the same amount. Whether high-school or college educated, U.S.-born whites earn significantly more than white and black foreign-born workers.

The Integration of Immigrants and Their Families in Maryland by the Urban Institute allows us to compare the occupational success of immigrants from Europe and Africa in Maryland (p. 36). Immigrants from both Europe and Africa can be of any race, but African immigrants will likely be disproportionately black and European immigrants likely disproportionately white.

The figure below shows that European immigrants with non-U.S. college degrees are much more successful than similarly educated African immigrants at finding skilled work. Among immigrants in the United States for 10 years of less, 41 percent of Africans with non-U.S. college degrees were doing unskilled work. Only 12 percent of similar Europeans were in these occupations.

These analyses are fairly simple. More complex multivariate analyses could change the picture. The story one gets from looking at employment rates, family income and other economic indicators also could be quite different.

Nonetheless, in the comparisons discussed above, black immigrants seem far from a "model minority." In New York City, white immigrants appear to earn slightly more than black immigrants among similarly educated immigrants. In Maryland, it seems that college-educated white immigrants obtain better jobs than college-educated black immigrants. Once again it looks like American society might not be race-blind after all.

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--Algernon Austin, Ph.D.

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