Latinos, African Americans and the coalitional case for a federal jobs program.
Aja, Alan A. ; Darity, William, Jr. ; Hamilton, Darrick 等
In the late 1970s, amidst growing unemployment in black and Latino
communities, the newly-formed Congressional Hispanic Caucus (CHC)
supported the Congressional Black Caucus (CBC) in its call for full
employment in the run up to the passage of the Humphrey-Hawkins Act of
1978. Never fully implemented, the act has been defacto an unfunded
mandate for close to 40 years. Only recently has it been resurrected by
a handful of lawmakers, while both discussion and support for a national
jobs program has begun to gain steam in the media and the general
public. With support from labor market research and other empirical
evidence, we propose and outline for a bold policy: a National
Investment Employment Corps to provide a permanent job guarantee for all
citizens with the purpose of maintaining and expanding the nation's
physical and human infrastructure. Given the disproportionate effect of
the recent economic downturn and labor market bias on African Americans
and Latinos, we argue that a National Investment Employment Corps
program would address the employment needs for blacks and Latinos by
assuring full-employment and simultaneously ensuring long-term benefits
for the nation's well-being.
**********
In May 1978, amidst a period marked by high inflation and economic
decline, the United States Commission on Civil Rights released a report
evaluating the adequacy of the Department of Labor's unemployment
data on the Hispanic population. Previously, statistical data on the
11.3 million United States Hispanics had been scarce, making it
difficult for advocacy groups and policymakers to understand the social
and economic reality of the nation's fastest growing ethnic group.
Thus, pursuant to Public Law 94-311--which demanded improved collection
and analysis of Hispanic unemployment data--the commission began to more
fully document the sobering economic reality Latino leaders and
organizations were arguing required an adequate policy prescription. (1)
Specifically, the agency estimated that for most of the 1970s, the
average Latino unemployment rate hovered around 10 percent, having
reached a high of 12.2 percent in 1975. (2) Among Hispanic sub-groups,
Puerto Ricans and Mexicans on average had higher unemployment rates
throughout the decade than Cubans, the third largest Latino group. But
by 1977, the differences generally were of marginal significance; at
that point all three groups had rates that hovered around 10 percent.
Other related indicators, the Commission noted, showed that only 40
percent of Latinos twenty-five years old or older had completed high
school, median income stood at $10,200 (two-thirds of the median income
of non-Latino whites at the time), and one quarter of Latino families
lived below the poverty level. (3)
Meanwhile, the decade-old Congressional Black Caucus (CBC),
concerned over consistently high unemployment rates in the African
American community, already had been leading the way in addressing the
spiraling economy's disproportionate impact on historically
marginalized groups. Inspired by an earlier (1972) report by members of
the National Economic Association (NEA) (then the Caucus of Black
Economists) which called for sustained full employment as a fundamental
human right (Darity, Jr. 2010), one of the CBC's founding members
(and representative of a predominantly low-income, black and Latino
California district), Congressman Augustus F. Hawkins, joined long-time
ally of organized labor Senator Hubert Humphrey (MN) to write the Full
Employment and Balanced Growth Act, popularly known as the
Humphrey-Hawkins Act of 1978. (4) After months of negotiations, a
coalition of labor unions, clergy, advocacy groups, along with support
from the CBC and the newly formed Congressional Hispanic Caucus (CHC),
helped to better position the act on the legislative agenda.
Subsequently, it was passed by Congress and signed into law by President
Carter on October 27, 1978.
Based on the tradition of Keynesian economics, the act empowered
the government to spend proactively in the private sector to increase
consumer demand, with the primary goal of achieving full employment. The
act required all federal programs and policies to work toward achieving
a 3 percent adult and 4 percent overall jobless rate within five years
and inflation rates of 3 percent by 1983 and eliminating unemployment in
its entirety by 1988 (Schantz, 1979). But over time, the overriding
political concern with inflation became the primary bi-partisan focus,
while the struggle against unemployment evaporated as a priority
(Ginsburg, 2011). This evaporation rendered invisible a lesser-known and
most crucial provision of the act: that if the private sector failed to
respond adequately in reducing unemployment, the public sector (read:
federal government) would be responsible for the direct creation of
those missing jobs.
Today, more than thirty-five years later, the United States
supposedly lies at the edge of the "Great Recession,"
triggered largely by the post-2006 mortgage-lending crisis. Despite
claims of a modest economic recovery, mass long-term unemployment
remains high for the skilled and unskilled alike, with a
disproportionate impact on African Americans and Latinos. According to
the Bureau of Labor Statistics (November, 2014), while the overall
United States unemployment rate stood most recently at 5.8 percent, the
black and Latino unemployment remained significantly higher, estimated
at 11.9 percent and 6.6 percent respectively (compared to the relatively
lower 4.9 percent figure for whites). But this does not provide the
entire picture. The labor force participation rate (the percent of both
employed and unemployed sixteen and older in the labor force) has
declined dramatically since the "Great Recession," especially
for people of working ages 25-54 years old. In November of 2014, the
labor force participation rate was calculated at 62.8 percent, a marked
decline from the general average of 66 percent during 2007 and a figure
only marginally higher than the previous low of 62.7 percent during
February of 1978, economic realities that served as impetus for the
passing of the Humphrey-Hawkins Act in the first place. (5)
To underscore our point further, these figures should also be
viewed alongside the before-and-after impact of the Great Recession on
specific metropolitan areas, which display dramatically higher
unemployment rates for blacks and Latinos compared against their
groups' respective national averages. According to two separate
studies published by the Economic Policy Institute (2010), thirty-one
metro areas recorded unemployment rates reaching 20 percent for blacks
in cities like Detroit, Milwaukee, Las Vegas and Minneapolis, while a
study of thirty-eight cities yielded similarly high rates for Hispanics
in cities including Providence, Hartford and Fresno. These figures, the
EPI aptly notes, rival the peak national unemployment rate during the
Great Depression of the 1930s (Austin, 2011).
However, we must note that these disparities are not simply the
effect of the "Great Recession," nor are they recent
statistical patterns. Indeed, the overall unemployment rate for
African-Americans historically has been roughly double that of whites
and for Latinos roughly 1.5 times greater than the white rate (Bureau of
Labor Statistics 2010). Despite these disparities, and the irony that
black and Latino unemployment rates are nearly at the same levels when
the Humphrey-Hawkins Act of 1978 was passed, only recently has
discussion resumed over a basic right to employment in Washington, D.C.
For close to forty years, the Full Employment and Balanced Growth
Act of 1978 has existed, de facto, as an unfunded mandate. In 2011,
United States Representative John Conyers, Jr. (D-MI) introduced a bill
(HR-1000) entitled the Humphrey-Hawkins 21st Century Full Employment and
Training Act to provide the financing and structure to fulfill the full
employment goal of the original legislation. Calling it a "21st
century New Deal," in which the federal government "plays a
major role in getting Americans back to work," Conyers' bill
invokes the spirit and intent of the 1978 legislation by creating two
complementary trust funds, one that funds states and localities for
specific job-creating activities, the other directed toward job training
programs for unskilled workers (Conyers, Jr., 2011).
While there has been no mention of a federal jobs program by
President Obama or his administration, the central premises behind
Conyers' act only recently have begun to gain traction amongst
media and policymakers. In his widely read article recently published in
Rolling Stone (January 3, 2014), Jesse Myerson argued that given the
adverse impact of the Great Recession on "new millennials,"
young people should support a set of five economic reforms; the first he
listed is a federal job guarantee.
After Myerson's article drew criticism from political pundits
and social media users, the Hujfington Post commissioned a scientific
poll to measure public opinion about a federal job guarantee. The poll
found that 47 percent of 1,000 Americans sampled supported a law
allowing the government to provide jobs for Americans who could not find
work in the private sector, while 41 percent disagreed and 12 percent
were unsure. Overall, this suggests modest but general support for a
federal jobs guarantee. When broken down by ethnic group, the numbers
are more telling. Black support for such a measure polled the highest at
67 percent (14 percent against, 19 percent unsure), Latino support stood
at 52 percent (35 percent against, 13 percent unsure) while non-Hispanic
white support was slightly weaker with 43 percent in support (45 percent
against, 12 percent unsure).
To date, Conyers, a long-time prominent member of the Congressional
Black Caucus (CBC), has received some support for the legislation from
members of the Congressional Hispanic Caucus (CHC), several of whom are
co-sponsors of his bill. Meanwhile, according to his office, the
legislation is beginning to yield interest from Latino civil rights and
advocacy groups like the National Council of La Raza (NCLR). This is an
important development considering the concerted energies and focus by
Hispanic groups on passing comprehensive immigration reform while
countering the dangerous culture of austerity economics (spending cuts)
in Washington.
Given the aforementioned support by African Americans and Latinos
alike, we believe that a permanent, full-employment policy consistent
with the ideals of the Humphrey-Hawkins Act of 1978 not only would serve
as a direct alternative to austerity economics (see Aja, Bustillo,
Darity, Jr. and Hamilton, 2013), but also address longstanding patterns
of racial and inter-group inequality. In short, a federal job guarantee
would remove the threat of unemployment and ensure that the opportunity
to work for a livable wage and decent pay is a basic right of
citizenship for all Americans (Darity, 2010). (6)
If the National Investment Employment Corps were implemented, pay
would range from a minimum of $23,000 to a maximum of $80,000, each job
also providing benefits (including medical coverage and retirement
support), opportunities for advancement, on-the-job training, and
professional development. (7) Much like Franklin Delano Roosevelt's
Workers Progress Administration (WPA), a national program of job
assurance will provide meaningful employment in a variety of
"public works" projects. It could potentially serve as the
stimulus for the types of innovative, green technologies the president
has touted frequently, necessary "green jobs" considering the
adverse effects of climate change. States and municipalities could
develop inventories of needed jobs for all who are able to work,
matching skilled and unskilled laborers alike with full employment
opportunities. (8)
In a recent March 2013 report, the American Society of Civil
Engineers (ASCE) gave the country a grade of D+ on its physical
infrastructure, only a slight improvement from a grade of a D in 2009.
(9) The report indicated that a total investment of $3.6 trillion is
required by 2020, streams of funding necessary in order to deal with the
backlog of overdue maintenance across our infrastructure systems. Thus a
federal job program would address physical and human infrastructure
needs including the building, repair, and maintenance of bridges, damns,
roads, parks, museums, mass transit systems, school facilities, health
clinics, and child care centers, giving priority to the most urgent
projects to aid the most distressed communities.
Under Representative Conyers' bill, a federal jobs program
would be funded through a slight tax increase on the top percentile of
earners, a type of revenue transfer that citizens increasingly support.
In New York City, for example, Mayor Bill DeBlasio was elected in late
2013 on an anti-austerity, populist agenda that called for the expansion
of universal child care programs through a modest, minimal tax increase
on the wealthiest residents of the state. Similarly--given the
Obama-Romney 2012 presidential campaign position difference on allowing
the George W. Bush presidential administration tax cuts to expire for
those earning above $250,000--Obama's election victory may serve as
evidence of a national voter sentiment of this type of revenue,
transfer. But a permanent, nation-wide NEIC would essentially pay for
itself, given that the income paid to the employees of the NIEC would
not only restore tax bases at the state and municipal levels,
alleviating current budget crises.
Furthermore, we calculate that the cost of a National Investment
Employment Corps (NIEC) would be less than the first stimulus package
enacted by Congress and vastly less than the $10-30 trillion awarded by
the Federal Reserve to the very same investment banking community that
caused the economic crisis in the first place (see Aja, Bustillo,
Darity, Jr. and Hamilton, 2013). A back of the envelope calculation
indicates that if 15 million persons--the total unemployed at the trough
of the Great Recession--were employed at average cost of $50,000 per
annum per person (salaries, benefits, training, materials and
equipment), a high estimate of the total expense of the program would be
$750 billion (Darity, Jr. and Hamilton, 2012). (10)
Consider that in 2011 alone, federal antipoverty programs
(Medicaid, unemployment insurance, etc.) cost approximately $746 billion
(Wasson 2012). A federal job guarantee would make it possible to reduce
drastically current antipoverty expenditures and is, by comparison, far
more productive in its deployment of both physical and human capital
development. Hence, the net expense of a job guarantee program could
also be minimal given the potential of cost savings from other social
programs. With the federal government serving as employer of last
resort, unemployment compensation along with antipoverty program funding
for free and reduced lunch subsidies and food stamps could be reduced
since a job guarantee works to eliminate both working and jobless
poverty simultaneously.
The NEIC also would be a better source of job creation than the
Keynesian-based indirect incentive effects of stimulus measures and tax
incentive strategies aimed at encouraging the private sector to provide
jobs. After all, a federal job guarantee serves as a direct mechanism
for job creation while also triggering a multiplier stimulus effect
across a wide panoply of activities that take place in the economy. The
private sector would benefit in a myriad of ways, not just by
stabilizing consumption demand, but also through vertical linkages of
sales of supplies and materials to the NIEC for public projects. This
also could create advantages for black and Latino-owned businesses,
while leverage for unions also would be created, since the jobs offered
by the NIEC would set an effective minimum floor on the quality of
employment.
Furthermore, one might expect that the existence of an NIEC would
incentivize profit-seeking employers to demand less costly undocumented
workers who would not qualify for a federal job guarantee. While it is
likely that employers would tend to pay them less than the floor on
wages provided by the job guarantee, over time, we would expect the
economy-wide rise in wages associated with the federal job guarantee
workers would even bid up wages--at least marginally--for group whose
labor market status is more vulnerable, such as undocumented immigrants.
Furthermore, since permanent residents are governed under the same labor
laws as United States citizens, the same protections of a federal right
to work for decent pay granted by a federal job guarantee would be
extended to this group as well. This would have additional positive
impacts on the economic livelihoods of "mixed-status" Latino
households (those who live in arrangements where one household member
may hold a legalized status while others are undocumented), given that
permanent residents could apply for work under the federal job
guarantee."
Other benefits include the potential reduction or elimination of a
number of market interventions like minimum wage laws, financial
regulation, and associated enforcement expenses. Minimum wage laws no
longer would be needed since the minimum salary offered by the NIEC
would set the floor on the wage standard. Concerns around strengthening
and constantly updating financial regulation to keep up with constantly
evolving economically and environmentally harmful private sector
products and practices aimed at eluding regulation would be reduced. The
presence of a job guarantee would mitigate the adverse effects of
fluctuations in speculative investment markets on personal employment
and income for the public at large.
To be clear, a federal job guarantee is not meant to act as a
temporary program contingent upon emergency conditions. Instead, it will
function as a permanent, automatic stabilizer. The number of persons put
to work in the NIEC will rise during downturns and fall during upswings.
Thus, like the cost of the program, it will expand and contract
counter-cyclically. In addition, it would produce the structural change
in the United States economy away from the generation of low wage jobs
and toward more moderate and high wage jobs.
The program would guarantee employment for members of stigmatized
populations subject to discriminatory employment exclusion. Devah
Pager's audit study in Milwaukee, Wisconsin and in New York City,
for example, revealed that among males of comparable age and employment
qualification, white applicants received more employment callbacks than
their black counterparts. Even more alarming, the study also found that
whites with criminal records were slightly more likely to get call backs
than black males with no criminal record (Pager 2003). Indeed, even
among white males alone, having a criminal record reduced the odds of
receiving an employment call back by half. It is notable that one set of
these audits took place in Wisconsin, a state that outlaws employer use
of criminal records as a criterion for employment in most jobs.
In another example, using personnel data from a large United States
retail firm, Guiliano, Levine, and Leonard (2008) undertook an
examination of whether the race of the hiring manager affects the racial
composition of new hires, finding significant differences between the
hiring patterns of non-black managers and black managers, with non-black
managers hiring more whites and fewer blacks than black managers. Also,
Bureau of Labor Statistics (BLS) indicates that among 18-25 year olds,
white high school dropouts had an unemployment rate lower than blacks
that have completed some college. The evidence suggests that even when
blacks are able to avoid incarceration and acquire education they are
employed at lower rates than their white formerly incarcerated and lower
educated counterparts.
Globally, programs similar to a federal jobs guarantee have proven
to be effective. Argentina's Plan Jefe/as de Hogar Desocupados
program, initiated in 2002, provides a payment of 150 pesos per month to
a head of household for a minimum of 4 hours of daily work in community
services, small construction, or maintenance services. The program
provided jobs to 2 million workers, with indigence rates among
participating households falling by nearly 25 percent and the
unemployment rate dropping from 21.5 percent in May 2002 to 15.6 percent
in May 2003 (Tcherneva and Wray 2005), while the program's
multiplier effect conservatively was estimated at 2.57 (Harvey 2007).
In another example, India's National Rural Employment
Guarantee Scheme, which was implemented in 2006, guarantees rural
households the legal right to be employed up to 100 days a year. For
individuals, the program entitles them to receive wages if no work is
made available to them within two weeks of an application. Liu and
Deiniger (2010) estimate that the short-term effects of the Indian
program on participating households were positive and greater than
program costs.
At present, non-white racial and ethnic groups, who chronically are
subjected to higher unemployment rates, suffer the most from austerity
policies and federal indifference toward full employment policy. To
reverse this, we need a renewed inter-group coalition, organized in the
spirit of the late 1970s, reminding the President and Democratic members
of Congress of the overwhelming support they received from African
Americans and Latinos during the two previous elections. A federal job
guarantee not only would address long-standing unjust and discriminatory
barriers that keep large segments of stigmatized populations out of the
labor force, but also would reverse the rising tide of inequality for
workers in general by strengthening their labor market bargaining power
and eliminating the threat of unemployment for all Americans. Finally,
the program would create productive physical and human capital
investment jobs that would reverse the trend of a crumbling and
depreciating public infrastructure, which would have a long-standing
stimulus effect similar to the benefits of the massive public investment
undertaken during the Great Depression.
Alan A. Aja
Brooklyn College, CUNY
William Darity, Jr.
Duke University
Darrick Hamilton
The New School
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(1) See US Commission report, 1978. p. 1.
(2) "Improving Hispanic Unemployment Data: The Department of
Labor's Continuing Obligation," May 1978, US Commission on
Civil Rights.
(3) US Commission on Civil Rights, 1978, also see Bureau of Census
data (1977).
(4) For instance, while the unemployment rate hovered between 12
and 14 percent during the mid 1970s, by 1978 rates widened between
blacks and whites dramatically, with a "black and other race"
unemployment rate 2.4 times higher than the rate for whites. (Bureau of
the Census 1979)
(5) See Tables and excel documents provided by the Bureau of Labor
Statistics, Department of Labor, available at:
http://data.bls.gov/timeseries/LNS11300000 (December 10, 2014).
(6) For previous examples of federal job guarantee programs, see
Harvey (2000) and Wray (2008).
(7) This is an updated analysis of the policy proposal as outlined
in William Darity, Jr. and Darrick Hamilton (2012). Also see for
reference the following news article: http://busi
ness.nbcnews.com/_news/2011/1
l/28/9067808-fed-lent-banks-nearly-8-trillion-during-crisis-report-shows?chromedomain=investigations
(8) Initial outline of the federal jobs guarantee, framed in the
context of growing wealth inequality and labor market discrimination, is
described in Darity, Jr. (2010) and Darity, Jr. and Hamilton (2012),
also see Aja, Bustillo, Darity, Jr. and Hamilton (2013) for discussion
of the program as a necessary alternative to austerity politics.
(9) In fact, the report maintains that bridges in urban areas are
decaying more rapidly than those in rural areas, while funding streams
are not sufficient enough to maintain and improve them. It also
expressed concern for the aviation sectors and the country's dams.
See 2013: Report for America's Infrastructure, ASCE, March 2013.
Available at: http://www.infrastruc
turereportcard.org/a/documents/2013-Report-Card.pdf
(10) This is less than the first $787 billion stimulus package and
also much less than the first round of investment bank bailouts ($1.3
trillion). See Aja, Bustillo, Darity, Jr. and Hamilton (2014) and Aja,
Bustillo, Darity, Jr. and Hamilton (2013).
(11) We understand that the coalitional effort to pass
comprehensive immigration reform is of utmost urgency and importance,
especially for the Latino community, but we believe that there are no
substantive policy specific reasons why such efforts and focus are not
largely independent of those needed to pass a federal job guarantee. We
support a comprehensive immigration reform package that includes
pathways to citizenship for undocumented workers currently residing in
the United States. Clearly, such reform would disproportionately benefit
both Latino and black, albeit to a lesser extent than Latino, workers.