From enslavement through Jim Crow segregation to today – when substantial economic barriers still exist – black people’s labor has been central to building America. While we continue to fight for a more equitable work environment that removes barriers for black workers, Asha Banerjee and Cameron Johnson of CLASP also remind us to celebrate how black workers have been vital to American’s economic success for centuries:
Black workers’ high labor force participation has propelled American economic growth, often at extremely low pay. As the 1619 Project documents, Black slaves enduring brutal conditions for two centuries in Southern plantation and Northern industries to build the booming American economy. In the early 1900s, over one million African Americans joined the “Great Migration” to fill jobs in the steel, automobile, shipbuilding, and other heavy industries. W.E.B. DuBois described this pivotal moment of American capitalism: “The giant forces of water and of steam were harnessed to do the world’s work, and the black workers of America bent at the bottom of a growing pyramid of commerce and industry.”
The growing urban vs. rural chasm
America’s economic recovery from the Great Recession has been terribly uneven, with growth concentrated mainly in large urban areas while many rural communities hemorrhage jobs and population. A new study by Olugbenga Ajilore, of the Center for American Progress puts numbers to this phenomenon. The takeaway: Business growth has been positive in “graying” communities and areas with large concentrations of Latinx or Latter-Day Saints residents, but tepid in “working class” communities, rural Middle America and the “African American South.”
While some rural communities are experiencing firm growth, there may be a role for the federal government to support local governments through expanding the capacity of community development corporations. The establishment and growth of new firms is critical to productivity growth, and productivity growth is at the heart of broader economic growth. Until policymakers consider business dynamism a critical issue in any effort to revitalize left-behind communities, these rural areas will continue to struggle in their recovery.
In Louisiana, as The Advocate’s Mark Ballard reports, the governor has tapped former state Sen. Ben Nevers to lead a state task force that will recommend ways to end this downward spiral. The group will look at issues such as infrastructure spending, crumbling schools and underpaid teachers that have long been a drag on rural opportunity, and is tasked with developing a series of short-term solutions and a five-year plan.
They’ll also look at the budgets for the Department of Agriculture & Forestry, which have been slashed annually for more than a decade. It’s the unaddressed consolidation of farms and new technology since the 1970s that has thrown tens of thousands of people out of work and started the decline in rural areas.
Homeownership and business won’t close the racial wealth gap
For decades, many proposals to narrow America’s racial wealth gap have focused on increasing homeownership and entrepreneurship among black Americans. But new research suggests that structural challenges, such as racial segregation in the housing and capital-finance markets, place significant limits on wealth building that entrepreneurship and homeownership alone cannot accomplish. Instead, as City Lab’s Brentin Mock explains, these structural problems need structural solutions:
Several new studies cast doubt on the idea that simply owning homes or businesses can help dissolve racial economic inequities. The first, from a group of University of Georgia geography scholars, concludes that a “racial appreciation gap” exists in the housing market that hinders African Americans’ ability to generate wealth through owning a home. The research team analyzed home sale values throughout the city of Atlanta and its immediate suburbs — areas that have some of the highest rates of black homeownership and some of the most economically diverse populations of black homeowners in the U.S. — and found that houses in predominantly black neighborhoods have failed to appreciate in value since the mortgage crash recovery began. Meanwhile, houses in predominantly white neighborhoods have appreciated considerably.
The problem with “junk” insurance plans
One of the ways President Donald Trump’s administration has undermined the Affordable Care Act is by allowing insurers to sell “junk” health insurance plans. These policies are cheap because they provide very little actual coverage, as one Florida man learned recently when he returned from a work trip to China with flu symptoms and decided to get checked out for the deadly coronavirus. The Miami Herald’s Ben Conarck reports:
He had the flu, not the deadly virus that has infected tens of thousands of people, mostly in China, and killed at least 2,239 as of Friday’s update by the World Health Organization. But two weeks later, (Osmel Martinez) Azcue got unwelcome news in the form of a notice from his insurance company about a claim for $3,270. … While Azcue’s experience shows the potential cost of testing for a disease that epidemiologists fear may develop into a public health crisis in the U.S., one insurance expert sees the episode as a cautionary tale about the potential risks associated with deregulation in the insurance market.
Number of the Day
29.3% – The percent less per hour worked that part-time workers are paid, compared to full time workers with similar demographic characteristics and education levels. (Source: Economic Policy Institute)