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We Need More Than Talk at Jobs Summit
The situation is horrendous and getting worse. The official rate is 10.2 percent. But factor in those who have given up and those who are forced to work part-time, and the real rate is closer to 18 percent.
The official rate among African Americans is 15.7 percent. Add in those who have given up and those forced to work part-time, and it nears one in four African Americans. For teenagers of all races, the official rate is 27.6 percent. For African-American teens, that number is closer to 50 percent. Unemployment is the worst since 1983.
This catastrophe decimates the middle class--particularly the emerging middle class among Blacks and Latinos. At the center of this are the collapse of housing prices and the loss of homes. In 2006, before the fall, Blacks were three times more likely--at all income levels--to end up with a subprime mortgage. Companies that had redlined Black neighborhoods now targeted them, peddling costly and complicated loans. Nearly 20 percent of White borrowers got a subprime loan, but 45 percent of Latinos did, and more than half (53 percent) of African Americans.
One in 25 White borrowers will face foreclosure. In the Black community, that is more like one in 10. United for Fair Economy estimates losses of $164 billion in equity in the Black community. Given the legacy of slavery and segregation, family wealth has always been lower among Blacks than Whites. In 2002, Black families had about 7 cents in wealth compared to every $1 of a White median income family. By 2007, with the spread of homeownership and rise of housing values, Blacks were up to 10 cents; Latinos up to 12 cents for every dollar. Now those advances and more will be erased.
One final statistic: About one-fourth of African Americans live in poverty. That number is now rising, as those who had clawed their way into the middle class are falling back down.
So we face a national catastrophe in the continued loss of jobs--and one with sharply disproportionate effects.
It isn't just time for a summit to talk about this. It is time for action to do something about it.
Sadly, partisan politics and ideological divides are making progress more difficult. Republicans, having voted in large numbers to bail out Wall Street under Bush, then voted against Obama's Main Street recovery plan. Conservative Democrats made that plan weaker and smaller. The downturn was far worse than the administration--or most economists--predicted.
So while everyone is worried about the large federal deficits, the reality is that Obama's recovery plan was too small, not too big. With Americans losing some $13 trillion in wealth, and the downturn global, only government spending can keep the economy from sinking.
Now we need to do more. States and local governments are facing crippling deficits, gearing up for massive layoffs to meet what is estimated to be a $470 billion deficit over three years. Laying off 900,000 teachers, police, firefighters and public service employees will only make things much worse. The federal government should provide more aid to states and local governments.
We need targeted direct public service jobs, particularly for young people in our cities and rural areas. The president should demand funds for an urban corps to clean up our cities and a green corps to repair parks and plant trees, and target these organizations to young people.
We need sustained investment--financed over time--to build a 21st century infrastructure: a modern electric grid, fast trains, federal wind farms to supplement the New Deal's federal dams, and much more. Some of these efforts--like repairing schools--will generate jobs immediately next summer. Others will take longer to gear up, but must be driven with a long-term commitment and a new urgency.
It is time to push and push hard to put America back to work.