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The thing about systemic racism is it’s systemic: This week in the war on workers

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According to government statistics, the wage gap between white men and Black men has shrunk dramatically since the 1950s. But that’s only true, The New York Times’ David Leonhardt points out, if you compare workers—and the problem is, a lot of Black men have been pushed out of the workforce, in significant part by mass incarceration. When comparing Black men and white men, regardless of if they work, the wage gap is about the same as it was in 1950. “An end to mass incarceration would help,” Leonhardt writes. “So would policies that attempt to reverse decades of government-encouraged racism—especially in housing. But it’s possible that nothing would have a bigger impact than policies that lifted the pay of all working-class families, across races.” 

It’s the combination of racism and inequality we can see in this pattern that set the stage for the disproportionate impact of the coronavirus on Black people. Black people have been more likely to lose their jobs during the pandemic than white people, but they also disproportionately work at essential jobs that require them to expose themselves to possible infection. They’re less likely to have paid sick leave, the ability to work from home, and health insurance. Racism and inequality produce chronic health problems that make Black people more vulnerable to COVID-19. The list goes on and on and on.

This blog originally appeared at Daily Kos on June 27, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006. Full-time staff since 2011, currently assistant managing editor.


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Unemployment situation is improving for some groups and not others, and you’ll never guess who

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Unemployment is still terrible, but with some signs of improvementWhat signs of improvement is an interesting question, and The New York Times’ Upshot jobless tracker suggests the answer is all too predictable, because what’s more predictable in the U.S. economy than inequality?

The tracker finds the unemployment situation improving slightly for white people … while layoffs of Black people grow. And unemployment hasn’t dropped for women, but men’s employment has risen. So that’s what the start of reopening looks like: things are getting better for white people and men, not improving for women, and getting worse for Black people.

Where have we heard that story before? Oh, right, everywhere, all the time. The data doesn’t allow a detailed explanation for why this is—“One possibility is that the pandemic is disproportionately hitting industries and regions that are more heavily African-American,” and the industry explanation almost certainly applies to the gender gap—but while it will be good to be able to pick it apart more fully as more data emerges, we don’t want to lose the bigger story about U.S. racial and gender inequality.

The Upshot notes that its tracker isn’t official government data, but is “an analysis of daily surveys by Civis Analytics, a data science firm that works with businesses and Democratic campaigns.” While it’s not official data, it has been “roughly consistent” with that data when it comes out, having shown some improvement ahead of the May jobs report.

This blog originally appeared at Daily Kos on June 17, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006. Full-time staff since 2011, currently assistant managing editor.


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Mounting unemployment crisis fuels racial wealth gap

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Black workers are more likely to be out of a job, to have lost income or to have left the labor market altogether, economic data and surveys show.

The economic meltdown that has devastated the country amid the coronavirus pandemic has proven uniquely damaging for black Americans, threatening to exacerbate an already staggering racial wealth gap and fueling nationwide protests focused on racial justice.

Black workers are more likely to be out of a job, to have lost income or to have left the labor market altogether, economic data and surveys show — and less than half of black adults are now employed. More than 1 in 6 black workers was out of a job in May, the Labor Department reported Friday, and the black unemployment rate continued to rise even as the overall rate ticked downward.

Black workers are also more heavily represented in frontline industries that leave them more likely to be exposed to the coronavirus — which has been killing disproportionate numbers of black Americans — and less likely to be able to work from home.

At the same time, black Americans have also historically earned lower wages, owned fewer homes and accumulated less wealth than their white counterparts, leaving them less able to weather an extended period of time with little or no income. And economists warn that long-term economic effects are likely to be more damaging for workers of color.

“Every corner of inequality has been exposed,” said Lisa Cook, an economics and international relations professor at Michigan State University who served on the Council of Economic Advisers during the Obama administration. “From the health care system, to wealth data, to income data, to occupational discrimination — all of it seems to be laid bare right now.”

The 16.8 percent jobless rate for black workers in May compares to 12.4 percent for white workers — a sizable gap but not a dramatic one for a statistic that is typically twice as high for black workers, even in strong economies. Still, it marks a stunning reversal for African Americans, who were finally starting to reap the benefits from a decade of economic expansion and hit their lowest-ever unemployment rate of 5.4 percent late last summer.

While it took 10 years for the employment rate for black workers of prime working age to climb 10 points, for example, those gains are likely to be wiped out in a matter of months, said Janelle Jones, managing director for policy and research at Groundwork Collaborative, an advocacy group promoting progressive economic causes.

“When the economy bounces back,” she said, “we know that it’s not going to bounce back as quickly for black workers.”

The composition of the labor market also leaves black workers at heightened risk of long-term unemployment compared to white workers. Workers of color are more heavily represented in jobs with higher risk of coronavirus exposure — customer service, food service and security, for example — which were hit first and hardest and are likely to be among the last to come back, according to a new analysis led by PolicyLink and funded by JPMorgan Chase.

Some of those concerns may have already begun to play out. The May jobs report showed an unexpected drop in the overall unemployment rate as the economy gained jobs in industries like hospitality and construction. But jobs in local government, where black workers are heavily employed, continued to drop sharply.

As a result, the white unemployment rate dropped nearly 2 percentage points — while the black unemployment rate rose 0.1 percentage point.

In other areas, too, black workers and families are bearing the brunt of the deep recession being felt across the country. More than 55 percent of black households report having lost employment income since mid-March, according to a Census survey released this week, as compared to 43 percent of white households.

And any signs of recovery could be just as uneven: More than 2 in 5 black households expect to continue losing income over the next month, the survey showed, while just over a quarter of white households reported the same.

“So you can imagine the financial strain that a lot of these families are under,” said Connor Maxwell, a senior policy analyst at the left-leaning Center for American Progress. “Even if they’re able to get jobs after this recovery, are they going to be able to bounce back economically the same way as a lawyer who has been working remotely for the past three months?”

Economists and analysts are increasingly calling on Congress to step in to boost recovery efforts, allocate more aid and ensure the funding that is available is being distributed evenly.

The Paycheck Protection Program, in its initial iteration, offered an early warning sign of how hundreds of billions in government-backed loans allocated to support small businesses could be less accessible for those with black owners, in part because they are less likely to have had relationships with major banks.

As a result, a Goldman Sachs survey from late April found only 79 percent of black business owners had applied for a PPP loan versus 91 percent overall. And those who did apply had more trouble earning approval: Only 2 in 5 black applicants were approved, Goldman found, compared to 52 percent of business owners overall.

In the same way that black Americans lost their homes at far higher rates than their white counterparts during the Great Recession — a factor that contributed to the uneven recovery — there’s concern that black business owners could now be more at risk of losing their livelihoods.

“This is a traditional entry point to the middle class,” Cook said. And if businesses are forced to close, “there will be another major setback to wealth accumulation in this country.”

That could worsen the already stark racial wealth gap: In 2016, the net worth of an average white family was 10 times that of an average black family — $171,000 versus $17,150.

Labor advocates and the AFL-CIO are also calling on lawmakers to extend the boosted unemployment insurance benefits that are currently set to expire at the end of July, noting that doing so would help all jobless workers but particularly minorities being hit the hardest. Democratic leaders in both chambers are also supportive of a push to automatically tie unemployment aid to the condition of the economy.

Jones of the Groundwork Collaborative noted lawmakers could go further and link benefits to regional unemployment rates, adding: “I don’t want to stop giving people help because New York and California have recovered but the South hasn’t.”

Others say Congress could take additional steps to provide rental assistance, given that people of color are less likely to own their homes, and provide hazard pay for essential workers, who are disproportionately workers of color.

“Congress knows that recessions hit black households harder, and it also knows that it has the power to take action that will weaken the recession and strengthen the recovery,” Heidi Shierholz, a senior economist at the Economic Policy Institute, wrote on Thursday. “If it doesn’t act, it will be yet another assault on black people.”

This blog originally appeared at Politico on June 5, 2020. Reprinted with permission.

About the Author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign. It was in that role that she first began covering trade, including Donald Trump’s rise as the populist candidate vowing to renegotiate NAFTA and Hillary Clinton’s careful sidestep of the Trans-Pacific Partnership.


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401(k) Retirement Plans Amplify Income Inequality and Racial Disparities

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Isaiah J. Poole

It’s bad enough that the move toward individual retirement plans has been a massive failure when it comes to providing average working Americans retirement security. But now there’s research that shows that our dependence on individual retirement plans adds fuel to the fire of racial and class inequities in ways that the pension plans that used to be common did not.

The Economic Policy Institute presented that research Thursday in its “State of American Retirement” report. The report underscores the need to keep up the fight for strengthening Social Security and increasing its benefits, rather than cutting them.

“We’re moving toward a retirement system that magnifies inequality,” said Monique Morrissey, the EPI economist who wrote the report. That happened, she said, as the percentage of workers who received a pension (a “defined benefit plan”) declined from 35 percent of private-sector workers in the early 1990s to less than 20 percent today. (In the early 1980s, the percentage of private-sector workers in large companies that had a pension exceeded 80 percent.)

Pension plans were surprisingly egalitarian, Morrissey said, in the sense that once you got a job with a pension, what you received in retirement was affected only by your wages and years with the company. With “defined contribution plans” – like 401(k)s and individual retirement accounts (IRAs) – differences widen by race and class.

According to the report, among the people in the top 20 percent of income, nine out of 10 have retirement account savings; among those in the bottom 20 percent, it’s worse than totally flipped; fewer than one in 10 have any retirement account at all. The workers at the top fifth of the income scale accounted for 63 percent of total income, but have 74 percent of the total stashed in personal retirement accounts.

Only 41 percent of black families and 26 percent of Hispanic families had retirement account savings in 2013; 61 percent of white households do. The average retirement account among African-American and Hispanic workers contains about $22,000; for whites, the average account contains $73,000. On top of that, research shows that African Americans are disproportionately in jobs where retirement plans are simply not offered. “401(k)s have really been a disaster for African Americans,” Morrissey said.

In fact, for all ordinary workers, “401(k)s were never designed to be a primary retirement plan,” Morrissey said. Yet they filled that role at the same time President Ronald Reagan and Congress cut a deal to improve the solvency of Social Security that pushed back the retirement age over time from 65 to 67 – and at the same time worker wages stopped keeping pace with productivity and with income gains for corporate executives.

The result is that today fewer Americans than ever will have a financially secure retirement. The Government Accountability Office in 2014 found that half of all households age 55 and older have no retirement savings at all; close to 30 percent also do not have a pension to rely on, either. Of those who do have a 401(k) or IRA-type plan who were between the ages of 55 and 64, their retirement savings would yield a monthly check upon retirement of about $310 a month.

Morrissey said these realities reinforce the case for expanding Social Security benefits. “That’s the number one thing we need to be doing,” she said. (To support the call for strengthening Social Security benefits, add your name to this petition.)

She added that while waiting for action at the federal level, states can play a role. For example, the California Secure Choice Retirement Plan would opt workers into making regular contributions to a state-managed plan if they did not have a retirement plan available in their job. The state plan would invest in a balanced portfolio of assets that would not be driven by the kinds of management fee incentives that often drive retirement plan investments.

This blog originally appeared at OurFuture.org on March 3, 2016. Reprinted with permission.

Isaiah J. Poole worked at Campaign for America’s Future. He attended Pennsylvania State University and lives in Washington, DC.


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