What do FDR's New Deal and Obama's Economic Stimulus Plan have in common?
Unfortunately, a lot.
A recent report by the Kirwan Institute on Race and Ethnicity at Ohio State University projects that the relief purposed to come from the Economic Stimulus Plan will not benefit all groups to the same degree. Because of the racial stratification of occupations and employment opportunities, the jobs created in the stimulus package are designed for industries where blacks, in particular, are underrepresented (e.g., the construction industry).
In parallel fashion, the handouts of the New Deal disproportionately fell in the hands of white middle class America, as it funded the seeds of suburbanization and the post-World War II White Flight phenomenon through the National Housing Act of 1934 implemented by the Federal Housing Administration. These government handouts are largely responsible for the large black-white gap in wealth we still see today.
Fortunately, unlike the 20s, we currently have laws that criminalize racial discrimination in hiring and wage allotment. However, sociological studies show that the racial wage gap is largest in the private sector, particularly in occupations where earnings are decided by the capital of one's client-base. In a society, where both interracial friendships and interracial employment contracts are rare, it is not difficult to see where inequalities in earnings can be built into a client-driven pay scale.
What we essentially have is a prime example of institutional discrimination--the range of policies and practices of an institution that lead to the systematic disadvantage of members of certain racial groups (disparate impact). Not coincidentally, the mechanisms of structural racism operates among us invisibly and create an inertive force once activated.
We are only now seeing one of the many unintended consequences of the disproportionate subsidy of white suburbanization -- twenty-first century black foreclosure.
Analysts have noted that since 2004 black homeownership gains have been reversed and that even before this time rates of foreclosure were on a steady rise in areas with large minority populations. While the media likes to place the onus on blacks -- citing poor investment practices and bad credit, they forget that, unlike their white counterparts, black homeowners financed much of their American Dream through their own means. They also did not catch on to urban flight until the 80s and 90s, once housing prices in urban areas were prohibitively expensive and the rise in housing values (and therefore, escrow capital) had already begun to stagnate. Furthermore, predatory lending practices, redlining, and urban decline have largely eroded the capital out of their most valuable asset.
Thus, in times where the median black family income is dropping for the first time since World War II, there is little to bail people of color out of the depression they have entered into with the current economic crisis. According to United for a Fair Economy, black unemployment is equal to or exceeds that of the Great Depression of 1929 and has been indicative of an economic recession for the past five years.
Could the new millennium Economic Stimulus Plan be the 1930s New Deal all over again? In "Silent Depression: The State of the Dream 2009," United for a Fair Economy draws more parallels between these two periods than one would like. Lax lending standards, a housing and construction boom, and later foreclosure were all features of the 20s and 30s, much as they are features of our current economic situation.
How do we stop this cycle of structural racism? If the Economic Stimulus Plan goes into effect without oversight into how and to whom jobs are distributed, it seems unlikely that we will be able to do so. The time to be assertive, deliberate, and informed is now. Time is repeating itself: this time there are no excuses.
A recent report by the Kirwan Institute on Race and Ethnicity at Ohio State University projects that the relief purposed to come from the Economic Stimulus Plan will not benefit all groups to the same degree. Because of the racial stratification of occupations and employment opportunities, the jobs created in the stimulus package are designed for industries where blacks, in particular, are underrepresented (e.g., the construction industry).
In parallel fashion, the handouts of the New Deal disproportionately fell in the hands of white middle class America, as it funded the seeds of suburbanization and the post-World War II White Flight phenomenon through the National Housing Act of 1934 implemented by the Federal Housing Administration. These government handouts are largely responsible for the large black-white gap in wealth we still see today.
Fortunately, unlike the 20s, we currently have laws that criminalize racial discrimination in hiring and wage allotment. However, sociological studies show that the racial wage gap is largest in the private sector, particularly in occupations where earnings are decided by the capital of one's client-base. In a society, where both interracial friendships and interracial employment contracts are rare, it is not difficult to see where inequalities in earnings can be built into a client-driven pay scale.
What we essentially have is a prime example of institutional discrimination--the range of policies and practices of an institution that lead to the systematic disadvantage of members of certain racial groups (disparate impact). Not coincidentally, the mechanisms of structural racism operates among us invisibly and create an inertive force once activated.
We are only now seeing one of the many unintended consequences of the disproportionate subsidy of white suburbanization -- twenty-first century black foreclosure.
Analysts have noted that since 2004 black homeownership gains have been reversed and that even before this time rates of foreclosure were on a steady rise in areas with large minority populations. While the media likes to place the onus on blacks -- citing poor investment practices and bad credit, they forget that, unlike their white counterparts, black homeowners financed much of their American Dream through their own means. They also did not catch on to urban flight until the 80s and 90s, once housing prices in urban areas were prohibitively expensive and the rise in housing values (and therefore, escrow capital) had already begun to stagnate. Furthermore, predatory lending practices, redlining, and urban decline have largely eroded the capital out of their most valuable asset.
Thus, in times where the median black family income is dropping for the first time since World War II, there is little to bail people of color out of the depression they have entered into with the current economic crisis. According to United for a Fair Economy, black unemployment is equal to or exceeds that of the Great Depression of 1929 and has been indicative of an economic recession for the past five years.
Could the new millennium Economic Stimulus Plan be the 1930s New Deal all over again? In "Silent Depression: The State of the Dream 2009," United for a Fair Economy draws more parallels between these two periods than one would like. Lax lending standards, a housing and construction boom, and later foreclosure were all features of the 20s and 30s, much as they are features of our current economic situation.
How do we stop this cycle of structural racism? If the Economic Stimulus Plan goes into effect without oversight into how and to whom jobs are distributed, it seems unlikely that we will be able to do so. The time to be assertive, deliberate, and informed is now. Time is repeating itself: this time there are no excuses.
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