arra and the economic crisis
TRANSCRIPT
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Photo Credits:Miami Workers Center
Flickr; users South Carolina State Library,
readerwalker, Steve Rhodes
Contributors
Dennis Parker,ACLU
Dominique Apollon,Applied Research Center
Jacob Faber, Center for Social Inclusion
Anita Sinha,Advancement Project
Juhu Thukral, The Opportunity Agenda
Philip Tegeler, Poverty & Race Research Action Council
Deidre Swesnik, National Fair Housing Alliance
Amy Hanauer, Policy Matters Ohio
Gihan Perera, Miami Workers Center
Laura Barret, Transportation Equity Network
Sondra Youdelman, Community Voices Heard
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ARRA&theEconomicCrisisOneYearLater:HasStimulusHelpedCommunitiesinCrisis?
JasonReece,MattMartin,ChristyRogers&StephenMenendian
February2010
ExecutiveSummary
Facinganescalatingeconomiccrisis,newly inauguratedPresidentObamasignedthehistoricAmerican
RecoveryandReinvestmentAct(commonlyreferredtoasthestimulus)onFebruary17th2009.1 The
$787 billion stimulus bill was designed to create and preservejobs, spur economic growth, and be
administeredwithaparticularfocusontransparencyandaccountability.Thestimulusbillmadeexplicit
referenceto
assist
those
most
impacted
by
the
recession.
Has
ARRA
provided
relief
to
our
hardest
hit
communities?HasARRAworkedtopromotegreaterracialandsocioeconomicequityinournation?One
yearintotheimplementationofARRAwefindmixedresults,andoffercriticallessonslearnedfromthe
ARRA experience. In addition, we provide specific recommendations for achieving the goals of the
RecoveryAct,generatingjobsandbroadeningprosperity,andreducingourracialandeconomicdivide.
AnUnevenEconomicCrisis
The brunt of unemployment, layoffs, social service and education budget cuts, foreclosures, and
bankruptcieshasbeenbornebygroupsalreadymarginalizedbythemainstreameconomy.Inparticular,
theracialimpactsoftherecessionandhousingcrisishavebeenextreme.Oneinfivechildrenwereliving
inpovertyin2008,andpovertyratesforchildrenofcolorareclimbingabove40%insomestates.2While
onein
ten
workers
are
unemployed
nationally,
one
in
six
Black
workers
and
one
in
eight
Latino
workers
are unemployed.3 Nearly half of all subprime loans went to African American and Latino borrowers,
eventhoughmanyqualifiedforprimeloans.AfricanAmericanandLatinohomeownersareexpectedto
lose$164$213billioninassetsduetothehousingcrisis.4Whilemuchofouranalysisfocusesonrace,it
is importanttonotethatotherfactors,suchasgeographyandgender, impactedtheway inwhichthe
recession burdened already vulnerable communities. The impact of the recession on children has
alreadybeensevereandwillpotentiallybelonglasting.Thepercentageofchildreninpovertyislikelyto
peak at 21% in 2010. Neighborhoods and communities are also being reshaped by the detrimental
impactsofthehousingcrisisandrecession.
ARRAOneYearLater:ProtectingVulnerablePopulationsfromDevastatingStateBudgetCuts
AsignificantportionofARRAwasdedicatedtooffsettingstatebudgetshortfalls,manyofwhichcould
have
resulted
in
drastic
cuts
to
critical
services
for
marginalized
populations.
In
this
regard,
ARRA
prevented massive budget cuts to critical services that would have further harmed vulnerable
populations.AnalysisoftheimpactofARRAsuggeststhatseveralARRAprogramswillhelpalleviatethe
growingpovertyacrossthenationbyexpandingexistingtaxcreditsandfinancialassistanceprograms.
However,more fiscalperilandpotentialbudgetcutscouldbeonthehorizon.WhiletheRecoveryAct
will provide more than $100 billion to offset state budget deficits in 2010 and 2011, even with this
fundingStatesareexpectinganother$267billioninadditionalbudgetdeficitsfor2010and2011.5Asa
result,thedraconianbudgetcutspredictedfor2009mayloomagainin2010.
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ARRAOneYearLater:FailingtoAddressJoblessnessforMarginalizedRacialPopulations
JobproductionwasaprimarygoalofARRA,andtheabilityofARRAtooffsetrisingunemploymentisa
critical measuring stick to assess ARRAs impact. Despitejob production claims and growth in the US
domestic product, national unemployment has increased during 2009. Between February 2009 and
December 2009, the national unemployment rate increased from 8.2% to 10% and the number of
unemployedincreased
from
12.7
million
to
15.2
million
people.
As
recently
reported
by
the
Associated
Press,therewere6.1unemployedworkersforeveryavailablejobinDecemberof2009,afigurewhichis
nearlydoubletherateof3.1unemployedworkersforeveryavailablejobopeningattheendof2008.6
Workers of all races experienced increasing unemployment during 2009, with the number of
unemployedBlackandLatinoworkers increasingbynearly1.5million.Latinosexperiencedthefastest
rateofunemploymentgrowthduring2009,withunemployedLatinoworkersincreasingby38%.7
RecentlyreleasedJanuary2010unemploymentfiguresindicatesomechangingtrends,withadeclinein
nationalunemployment figures,butcontinuinggrowth inunemployment forsomepopulations.While
the national unemployment rate declined from 10% to 9.7% (indicating a decrease of 430,000
unemployed workers), unemployment increased for some racial groups.8 White unemployment has
started to decrease (from a peak of 9.4% in October 2009 to 8.7% in January 2010), while Black
unemployment
rates
continues
to
rise
(from
15.5%
to
16.5%
during
the
same
time
period).9
Latino
unemployment rates have also decreased slightly but remain very high, decreasing from 13.1% in
October 2009 to 12.6% in January 2010.10 The new divergence in unemployment rates is particularly
troublesome, suggesting our economys modest economic gains from late 2009 are not reaching our
most economically vulnerable populations. While overall unemployment has started to decline (and
declineforWhiteworkers),Blackworkersmaysoonreachthe2010unemploymentratewhichwasonce
projected to occur if a stimulus or recovery bill was not enacted. This suggests that many of the
employmentgainsfromARRAarenotreachingworkersofcolor.
ARRAOneYearLater:UnderperforminginProducingMinorityProcurement&Contracting
Contracting and procurement are the primary ways ARRA can directly benefit private businesses and
employers. Minority and disadvantaged business contracting is a critical source ofjob and wealth
creationformarginalizedgroupsandcommunities.Manyconcernshavebeenraisedabouttheabilityof
minority firms to successfully compete for contracts.11 Although consistent state level data on ARRA
contractingtominorityfirmsisnotwidelyavailable,figuresfromfederalprocurementindicatetroubling
and disparate contracting patterns. While Black, Latino, and Women owned businesses represent
5.2%,6.8%,and28.2%ofallbusinesses respectively,12asofFebruary1,2010,theyhadonlyreceived
1.1%, 1.6%, and 2.4% of all federally contracted ARRA funds.13 Of the $45 billion in direct federal
contractsallocatedbyFebruary1st2010,lessthan$2.4billion(5%ofthetotal)wereallocatedtoBlack,
Latino,andWomenownedbusinesses.
TheHousingCrisisOneYearLater:InadequateFederalResponse
Thesubprimelendingandforeclosurefiasco,akeydriverofthecurrenteconomicrecession,continues
todestabilize
families
and
neighborhoods
across
the
country.
The
Neighborhood
Stabilization
Program
(NSP),whichallocatesfundstocommunitiestobuyandrehabilitatevacanthomes,hasbeencriticizedas
toolittle,toolate.Inmanycommunities,thenumberofvacanthomesisseveralthousandtimesthatof
thenumberofhomespotentiallysalvagedbyNSP.Second,becausetheprogramdirectsthefundstobe
usedinhardesthitneighborhoods(aprinciplethatseemssoundonitsface),itmaybeputtingitsdrops
in the wrong bucket: rather than trying to salvage a few homes in an overwhelmed neighborhood, it
maybebettertomoveforeclosedfamiliesintorehabilitatedhomesinmorestableneighborhoods.
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Infact,thefederalgovernmenthasaddressedtheforeclosurecrisisprimarilyoutsideofthestimulusbill,
throughtheDepartmentofTreasuryprograms.Byallaccounts,evenTreasurystheprogramshavenot
performedwellenough. Withmillionsoffamiliesfacing foreclosure,comparativelyfewhavereceived
permanent loan modifications under Making Home Affordable, which includes both HARP and
HAMP. HARP was designed forborrowerswho are underwater,or owemore than their home is
worth. Unfortunately,manyhomeownersareso farunderwatertheycannotqualify forarefinance;
nordotheyhavetheabilitytopayclosingcosts,giventhattheyhaveexhaustedthemselvesfinanciallytrying to keep current on the mortgage. As of October 2009, about 130,000 of the five million
potentiallyeligibleloansweremodifiedunderHARP.14WithregardstoHAMP,outofthethreetofour
millionhouseholdstargetedbytheprogram,110,000havebeenapprovedforpermanentmodifications
asof lateDecember,withagreatmanymore intemporarymodifications(theAdministrationreported
in January that a total of 850,000 homeowners have received temporary or permanent HAMP
modifications15). Two macroscale forces are weakening the programs, including continually falling
home prices and increasingjoblessness. The voluntary nature of the programs, and the fact that
mortgagecompaniescancollect lucrative fees from longterm delinquency,16has slowedservicerand
lenderaction.
Inshort,thescaleandscopeofthecrisishasoverwhelmedthe federalresponse. TheAdministration
should now consider more significant actions, such as requiring equity writedowns and giving
bankruptcyjudgestherighttoamendmortgages. Inbroaderterms,thesubprimecrisisandresultant
economic tsunami requires nothing short of a systemic reconfiguration of federal priorities, including
effectivebankregulationandconsumerprotections.
MovingForward:RespondingtoChallenges&PromotingOpportunitiesforEquity
DespiteARRAsinabilitytofullycountertheeconomiccrisisfacingmarginalizedcommunities,theneed
for continued federal action, investment and leadership is critical. As documented in this report,
indicatorsforsocioeconomichealthinmanycommunitiesareindicatingwidespreadhardshipformany
marginalizedcommunities,especiallycommunitiesofcolor.Atthestate level,ARRA funds (andfuture
policy efforts to reverse the economic crisis facing marginalized communities) must be refocused in
severalways.
ImproveTrackingofARRAResourcesandOutcomes.Ratherthanscalingbackjobtrackingefforts,thereshouldbeadditionalmeasureswhichconsiderthequalityanddurationof
employment,aswellastherace,gender,andzipcodeofjobrecipients.
IncreaseSmallandMinorityBusinessParticipation.Unbundlelargecontractsforsmallbusinesses.Breakinguplargeprojectswillallowformoresmallbusinessparticipationinthe
recovery.Setandmandatespecific,MBEandDBEGoalsforeverydepartment.
EnsureThatHardHitCommunitiesExperienceJobImpact.Usetargetedreinvestmentinhardhitareas,firstsourcehiring,apprenticeshipandjobtraining.Increaseemployment
opportunitiesforexoffenders.
Inaddition,federalreformsareneededtoassurethatfederalagencyplansareconsistentwithallofthe
goalsofARRA, including itsemphasisonthosemost impactedbytheeconomiccrisis.Areviewofthe
AgencyPlansraises twobroad,systemicconcernsthatrequire immediateattention. First, itappears
thatAgencyprograms fundedbyARRAmay insufficientlyreflectARRAspriorities. There isagreater
needtomorecarefullyalignAgencyprogrammaticactivitieswithARRAsgoals,particularlyitsemphasis
onjobcreationandassistancetothosemostaffectedbythecrisis. Secondly,themandatetoexpend
ARRA funds as quickly as possible, with special priority given to shovelready projects and projects
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receiving private investment, may be giving shortshrift to civil rights compliance, particularly Title VI
andTitleVIIIoftheCivilRightsActof1964.
Finally, an equitable jobs bill is still required to stem the economic crisis facing marginalized
communities.A futurejobsbillwould ideallysupportcommunitydevelopment inurbanandminority
majority areas, which have been damaged most severely by the recession and credit crises. The bill
shouldexplicitly
protect
and
provide
for
those
who
are
especially
vulnerable
to
joblessness
and
lack
of
accesstojobmarkets. Anynewfederaljobcreationstrategythatinvestsinournationsinfrastructure
should invest inothercriticalcommunity infrastructure (outsideof road investments)aswell,suchas
transit, schools and parks. It should develop new recruitment and training standards that help new
workersget intojobs,andhelpminorityandwomenownedbusinessesgeta fairopportunity towin
contracts.Finally,measuresmustbetakentoensure thatmarginalizedcommunitiesarebrought fully
intothegreeneconomy,asgreenjobinitiativesbegintotakeshapeinbothfederalandstatepolicy.
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ARRA&theEconomicCrisisOneYearLater:HasStimulusHelpedCommunitiesinCrisis?
JasonReece,MattMartin,ChristyRogers&StephenMenendian
February2010
TheKirwanInstitutefortheStudyofRace&Ethnicity1www.fairrecovery.organdwww.kirwaninstitute.org
TableofContents:
Page
1. Introduction
6
2. TheUnevenEconomicCrisis 7
3. HasARRAHelpedCommunitiesinGreatestNeed 10
4. ReflectionsfromtheField:ARRAOneYearLater 19
a. NationalReflections:Social,RacialEquity&ARRA DominiqueApollon,AppliedResearchCenter
LauraBarret,TransportationEquityNetwork
JacobFaber,CenterforSocialInclusion
Dennis
Parker,
ACLU
AnitaSinha,AdvancementProject
JuhuThukral,TheOpportunityAgenda
PhilipTegeler,Poverty&RaceResearchActionCouncil
DeidreSwesnik,NationalFairHousingAlliance
20
b. ReportsfromtheStates:Organizing,Advocacy,Equity&ARRA AmyHanauer,PolicyMattersOhio
GihanPerera,MiamiWorkersCenter
SondraYoudelman,CommunityVoicesHeard
28
5. MovingForward:RespondingtoChallenges&PromotingOpportunitiesforEquity
32
1TheKirwanInstitutewouldliketothankallguestcontributorsfeaturedinourreflectionsfromthefieldforsharingtheir
valuableexpertiseandexperiencesforthisreport.ForbiographicalinformationonKirwanstaffwhoauthoredthisreport,
pleasevisit:http://www.kirwaninstitute.org/aboutus/leadershipstaff/
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1. IFacingan
Recovery
$787 billi
administcuts,gra
the econ
Another
recession
theecon
economic
HasARR
communi
year
into
ARRA ex
crisis, sp
communi
social jus
equitable
The repo
crisis in t
guidance
crisiswhi
impactso
potentiall
reformto
Figure1:A
troduction
escalatinge
andReinves
on stimulus
redwith
ap
ts, loansan
my while g
spect of th
.The followi
miccrisis.T
crisisisresp
worked to
ties?HasAR
the
implemeerience. Th
ecifically rev
ties.Therep
tice field, o
outcomesin
tcloseswit
hosecommu
and insight
chhasdevas
ftherecessi
y long term;
assureafair
ericanRecove
StateandL
18
:TheAmeri
conomiccris
tmentAct (c
bill was des
articularfoc
directproc
nerating e
stimulus bi
ngreportex
herecession
onsibleforw
offset thisgr
Aworkedto
ntation
of
Ae following
iewing the
rtalsopulls
fering refle
ourrespons
acritique
nitiesmost
in future pol
tatedmany
nandtheh
the severit
recoveryfor
ryandReinvest
ocalRelief
%
anRecove
is,newly ina
ommonlyre
igned to cre
son
transp
rementfor
ployment t
ll was an ex
loresthe i
hasnot imp
ideninggeog
owingecon
promotegr
RA
we
find
eport exami
impact of
fromtheexp
tions from
totheecon
fwhyARRA
evastatedb
icy design a
fournation
usingcrisis
of this chal
allAmerican
mentActDolla
yandRein
guratedPre
erredtoas
ate and pre
rencyand
a
new investm
offset the
licit referen
pactofARR
ctedourna
raphic,racial
micdivide i
aterraciala
ixed
resultnes the disp
RRA on rel
ertiseande
the field by
omiccrisis.
hasexperie
the recessi
d public se
smostmar
nournation
lenge requir
s,andaneco
Allocation(Pe
TaxRelief
37%
Infrastructure&Sc
14%
estmentA
sidentObam
hestimulus)
servejobs,
ccountabilityents,ARRA
ations gro
ce to assist
onthosec
tionscomm
andsocioec
ournation
dsocioecon
,
and
offer
carate impac
ieving this
perienceof
those work
ncedchallen
on.Thesep
tor respons
inalizedand
smarginaliz
es continue
nomicallyhe
centageAlloca
ience
Other
1%
tOneYea
asignedthe
onFebruar
pur econom
.Utilizing
ac
asdesigned
ingjob loss
those most
ommunities
nitiesevenl
nomicdivid
andoffered
omicequityi
ritical
lesson of the rece
nfolding cri
quityadvoc
ing directly
ges instem
ignant lesso
s to the co
vulnerable
edcommuni
public inve
althynation
ion)
ProtectingtheVu
10%
H
Educati
Energy
5%
Pa
rLater
historicAm
17th2009.17
ic growth a
ombination
tobothsti
es (See Figu
impacted b
most impact
,andthisu
sinournati
relief toha
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learned
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sis in hard
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olicy
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2. TheUnevenEconomicCrisis
WhenHurricaneKatrinadevastatedNewOrleansnearlyfiveyearsago,itquicklybecameclearthatthe
stormhadanundeniablysignificant impactonmarginalizedcommunities. WolfBlitzersSeptember1,
2005quoteintheCNNSituationRoomhassincebecomefamous:Yousimplygetchillseverytimeyou
seethese
poor
individuals.
Almost
all
of
them
that
we
see
are
so
poor,
and
they
are
so
black.
This
is
going to raise lots of questions for people who are watching the story unfold.18 Now, in 2010, a
tremendous economic downturn has impacted all Americans. However, like Katrina, the most
vulnerable populations and communities tended to be the ones hardest hit by the financial disaster.
This is not a coincidence. The reality is that all members of our society do not have equal access to
socialandphysicalinfrastructuresthathelppeopleweatherthestorm.
a. Unevenimpacts
The brunt of unemployment, layoffs, social service and education budget cuts, foreclosures, and
bankruptcies has been borne by groups already marginalized or undervalued by the mainstream
economy.
In
short,
the
economic
recession
has
had
an
uneven
impact
across
various
layers
of
marginalization.Inparticular,theracialimpactsoftherecessionandhousingcrisishavebeenextreme.
One infivechildrenwere living inpoverty in2008,andpovertyratesforchildrenofcolorareclimbing
above40%insomestates.19WhiletheU.S.hasbeeninarecessionformorethantwoyears,peopleof
colorhavebeen inarecession fornearlysixyears,andhaveenteredadepressionduring thecurrent
economiccrisis.20 Whileone in tenworkersseekingemployment isunemployednationally,one insix
BlackworkersandoneineightLatinoworkersareunemployed.21Nearlyhalfofallsubprimeloanswent
to African American and Latino borrowers, even though many qualified for prime loans. African
AmericanandLatinohomeownersareexpectedtolose$164$213billioninassetsduetothehousing
crisis.22Whilemuchoftheanalysisabovefocusesonrace,itisimportanttonotethatotherfactors,such
asgeographyandgender,alsohaveshownunevenimpactsduringtherecession. Forexample,arapid
loss of manufacturing jobs has created devastating economic impacts in traditional rust belt
communitiesintheMidwest(SeeFigures2and3).
b. Longtermconsequences
Theeconomiccrisisisexacerbatinglongstandingchallengesfacingmanymarginalizedcommunities.As
one pediatrician has warned, We are seeing the emergence of what amounts to a recession
generation. Increases in child poverty, homelessness, and temporary relief indicate that children
acrosstheU.S.areexperiencingaquietdisaster.23 Between2007and2008,744,000morechildren
becamepoor,andthenumbersareexpectedtoriseastheimpactsoftherecessioncontinue.24AsNew
YorkTimescolumnistBobHerbertrecentlystated:
there is little doubt thatpoverty andfamily homelessness are rising, that the quality ofpublic
education in many communities is deteriorating and that legions of children are losing access to
healthcareastheirparentsjointhevastlyexpandingranksoftheunemployed.Thisisatoxicmixfor
children,ademoralizingconvergenceoffactorsthathavelongbeenknowntoimpedetheabilityof
youngpeopletoflourish.25
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Theimpactoftherecessiononchildrenhasalreadybeensevereandwillpotentiallybelonglasting.The
percentageofchildreninpovertyislikelytopeakat21%in2010.Twentysevenpercentofchildren8
million will likelyhaveat leastoneparentnotworkingfulltimeyearround in2010. Median family
income is expected to drop for all families, but especially for single femaleheaded households.
Childhoodobesitymayrisefromparents'relianceoncheapmeals,behavioralproblemscouldincreaseif
adolescents
who
are
not
in
school
cannot
findjobs,
and
state
and
local
budget
cuts
could
limit
the
availabilityofprekindergartenprograms.
Neighborhoods and communities are also being reshaped by the detrimental impacts of the housing
crisisandrecession.Thisimpactismagnifiedinmanycommunitiesofcolorwhichhavebeendevastated
by the foreclosure crisis. Communities which had faced a number of challenges already,such as high
poverty,disinvestmentorvacantpropertiespriortotheforeclosureepidemic,arenowfacingextreme
conditions.Theforeclosurecrisisisproducingwidespreadvacantproperties,whichactlikeatoxininthe
urbanenvironment,poisoningthehealthoftheentirecommunity.26Thegrowthinvacantpropertiesis
further dragging down property values, creating extensive blight and safety risks and in some cases
spiraling
stable
neighborhoods
into
a
permanent
state
of
distress,
as
well
as
undermining
entire
cities.
27
For people of color and others isolated in these neighborhoods, the crisis is creating widespread
burdens,ensnaringallresidents,eventhosewhoarenotfacingforeclosure.
Figure2:TheUnevenGeographicFootprintoftheRecession:UnemploymentRatebyCountyDecember09
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Figure3:TheUnevenGeographicFootprintoftheRecession:ChangeinUnemploymentDecember08toDecember09
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3. HasARRAHelpedCommunitiesinGreatestNeed?
ToreviewtheimpactofARRAonhardhitandmarginalizedpopulations,weassessafewkeyareas:state
budgetimpacts,jobsproduction(alsoaccountability&transparency),procurementandtheresponseto
the housing crisis. Our evaluation finds mixed results, with ARRA contributing significantly to
communities
in
great
need
in
some
areas
(stabilizing
state
budgets
and
programs
for
those
in
need)
while coming up short in other domains (job production, procurement and housing). Meanwhile,
accountability challenges in data collection make it impossible tojudge thejob benefits produced by
ARRAforhardhitcommunities.
a. AvoidingDisastrousStateBudgetShortfalls
AsignificantportionofARRAwasdedicatedtooffsettingstatebudgetshortfalls,manyofwhichcould
haveresulted indrasticcutstocriticalservices formarginalizedpopulations. Inthisregard,ARRAwas
crucialtoavoidingmassivebudgetcutstocriticalservicesthatwouldhave further isolatedvulnerable
populations. In themonthsprecedingARRAspassage,statebudgetsacross thenationweresuffering
unprecedentedrevenue
shortfalls.
Besieged
by
both
the
housing
crisis
and
the
recession,
nearly
half
of
allstatesfacedbudgetdeficitsattheendof2008.28Inresponse,muchofthereliefprovidedinthefirst
year of ARRA was directed to state budget relief, most notably in supporting health and education
programs.TheGAOreportsthat85%of the$69billion in federaloutlays toStatesbetweenFebruary
andNovemberof2009weredirected tohealth,educationandtraining.29This reliefhasproventobe
criticaltoprotectingstateservices,asnotedbytherecentstatefinancialreportreleasedbytheNational
GovernorsAssociation.
Byprovidingnearly$135billioninflexibleemergencyfundingthroughtheAmericanRecovery
and Reinvestment Act of 2009 (ARRA), the federal government has helped states avoid
draconiancuts
to
state
services.
30
Analysis of the impact of ARRA suggests that several ARRA programs will help soften the growing
povertyacrossthenationbyexpandingexistingtaxcreditsandfinancialassistanceprograms.According
to research produced by the Center for Budget & Policy Priorities, several components of ARRA
(emergencyunemploymentprovision,earned incometaxcredit,makingworkpay taxcredit,childtax
credit,foodstampsanddisabilityassistance)willstemthegrowthofpovertyoverthenextfiveyears.
TheCBPPreportestimatestheseprovisionshelped6.2millionfamiliesavoid fallingbelowthepoverty
linein2009,ofwhichtheyestimatemorethan50%ofthoseassistedwereBlackorLatino(3.3million).31
While these reports show positive results for ARRAs impact on vulnerable populations, concerns are
risinginregardstocontinuallyincreasingpovertyandimpendingstatebudgetdeficits.TheU.S.poverty
rate of 13.2% in 2008 (the most recent national poverty figure), was the highest rate recorded in 11
years.32ThenumberofAmericansinpovertyincreasedby2.5millionbetween2007and2008,ofwhich
more than 60% of new people in poverty were nonWhite or Latino.33 While the recent CBPP report
estimatesARRAwillstemthegrowthofpovertyin2009,without2009povertydata,thisestimateisnot
provable at this time. In contrast, some hard hit states show continued growth in economic distress,
despitethe implementationofARRA.Forexample,Ohiohasnoupdatedpovertyfigures for2009,but
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between theendofDecember2008and December 2009, foodstampparticipation grew by14% and
unemployment increased by 46%, while the number of children on free and reduced lunch grew by
morethan100,000between2007and2009.34
Lookingpast thereliefprovided in2009 forstatebudgets,more fiscalperilandpotentialbudgetcuts
could
be
on
the
horizon.
While
the
recovery
act
will
provide
more
than
$100
billion
to
offset
state
budget deficits in 2010and 2011, even with this funding States are expecting another$267 billion in
additionalbudgetdeficitsfor2010and2011.35Asaresult,thedraconianbudgetcutspredictedfor2009
may be impending without additional federal assistance. The Center for Budget and Policy Priorities
estimates that in response, 43 states have enacted budget cuts which harm our most vulnerable
residents,andifcontinued,suchcutscouldeliminateanother900,000jobs.36
b. Jobs,Accountability&Transparency
JobproductionwasaprimarygoalofARRAandtheabilityofARRAtooffsetrisingunemployment isa
criticalmeasuringsticktoassessARRAsimpact.Themostrecentreportedfiguresforjobsproducedor
supportedby
ARRA
claim
599,108
jobs
supported
or
created
with
ARRA
funds
between
October
1st
and
December 31st 2009.37 Despite the job production claims, national unemployment has continued
unabatedduring2009.BetweenFebruary2009andDecember2009,thenationalunemploymentrate
increased from 8.2% to 10%; the number of unemployed increased from 12.7 million to 15.2 million
during this time frame (See Figures 4 to 8). Despite growth in US gross domestic product (which
increasedby5.7% inthe furtherquarterof2009),joblessnesscontinued togrow in2009.As recently
reported by the Associated Press, there were 6.1 unemployed workers for every available job in
December of 2009, a figure which is nearly double the rate of 3.1 unemployed workers for every
availablejob opening, recorded at the end of 2008.38 Workers of all races experienced increasing
unemployment during 2009, with the number of unemployed Black and Latino workers increasing by
nearly
1.5
million.
Latinos
experienced
the
fastest
rate
of
unemployment
growth
during
2009,
with
unemployedLatinoworkersincreasingby38%duringthistime(SeeFigure4to8).39
AGrowingRacialDivideinUnemployment
RecentlyreleasedJanuary2010unemploymentfiguresindicatesomechangingtrends,withadeclinein
national unemployment figures, but continuing growth in unemployment for some populations (See
Figure9).Whilethenationalunemploymentratedeclinedfrom10%to9.7%(indicatingadecreaseof
430,000unemployedworkers)unemploymentincreasedforsomeracialgroups.40Whiteunemployment
has started to decrease (from a peak of 9.4% in October 2009 to 8.7% in January 2010), while Black
unemployment
rates
continues
to
rise
unabated
(from
15.5%
to
16.5%
during
the
same
time
period).
41
Latinounemploymentrateshavealsodecreasedslightlybutremainveryhigh,decreasingfrom13.1%in
October2009to12.6% inJanuary2010.42 Meanwhilestarkunemploymentdisparitiescontinuewithin
variousdemographiccategoriesintherecentJanuaryunemploymentfigures.Blackmenoverage20are
now experiencing unemployment rates of 17.6% (compared to White male unemployment of 9.1%).
Blackfemaleunemployment isat13.3%,nearlydoubletheWhitefemaleunemploymentrateof6.8%.
Employment for Black youth (ages 16 to 19) is now at 43.8%, nearly twice the rate found for White
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youth, whose unemployment rates were 23.5%.43 The new divergence in unemployment growth for
Blackworkers isparticularlytroublesome,suggestingoureconomysmodesteconomicgainsfrom late
2009arenotreachingourmosteconomicallyvulnerablepopulationsandresulting inextremeratesof
unemploymentforsomepopulations.AsrecentlystatedbyDeWayneWickhaminaneditorialcolumnin
USAToday:
Evenmoreworrisome,thejoblessrateforblackmen20andolderroseafullpercentagepoint
to17.6%.ThatrateisclosertothelevelofAmericanswhowereunemployedattheheightofthe
GreatDepression(24.9%),thantothepercentageofwhitemen(9.1%)outofworkinJanuary.44
HasARRAproducedthejobbenefitsexpectedpriorto itspassage?Areviewofunemploymentfigures
andprojectedunemployment(projectedtooccurwithoutarecoverypackage)suggeststhat ithasnot
achievedthejobproductiongainsexpectedofarecoverybill.TheIssueBriefWithoutAdequatePublic
Spending, A Catastrophic Recession for Some prepared by Lawrence Mishel and Heidi Shierholz and
published by the Economic Policy Institute, projected 2010 unemployment rates without a economic
recovery package to addressjoblessness. 45 Their predictions for unemployment in 2010, without an
adequate recovery package are strikingly close to recorded unemployment rates for January 2010,
especiallyforworkersofcolor(SeeFigure10).MishelandShierholzpredictedBlackunemploymentto
reach 18.2% by 2010 without a recovery package, current unemployment figures for Black workers
standat16.5%inJanuary2010andaresteadilyincreasing.Whileoverallunemploymenthasstartedto
decline(anddeclineforWhiteworkers),Blackworkersmaysoonreachthe2010unemploymentrates
expected to occur, if a stimulus or recovery bill was not enacted, suggesting that many of the
employmentgainsfromARRAarenotreachingworkersofcolor.
WhyhaventtheemploymentgainsfromARRAinvestmentsreversedunemploymentgrowth?Although
ARRAhascertainlyproducedsomenewemploymentopportunities,areviewofjobfiguressuggeststhat
more
of
the
employment
opportunities
produced
by
ARRA
were
job
retention
and
not
new
employment.Morethantwothirdsofthejobsreportedduringthelastquarterof2009werereported
by the Federal Department of Education, while 40% of jobs reported were produced by state
stabilization grants going to State Departments of Education.46 Its likely that these state grants
primarilysupportedexistingjobsandpersonnelinpublicsectoragenciesandarenotrepresentingnew
job growth. Analysis by the Associated Press indicates that ARRA investments made little impact in
reversing local level unemployment trends.47 With public support and confidence in ARRA on the
decline,ARRAs inabilitytostemthegrowingunemploymentwithnewjobproductionmaybepartially
responsibleforincreasingpublicdoubtconcerningARRAsimpact.48
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Figure4:
Monthly
Unemployment
Rats
by
Race;
Source:
Bureau
of
Labor
Statistics
Figure5:UnemploymentbyRace(January2009andJanuary2010);Source:BureauofLaborStatistics
6.0
8.0
10.0
12.014.0
16.0
18.0
Monthly National Unemployment Rate by Race(January 09 to Janurary 2010)
White Black Latino Total
7.0
12.8
9.9
7.7
8.7
16.5
12.6
9.7
6.0
8.0
10.0
12.0
14.0
16.0
18.0
White Black Latino Total
Unemployment Rate by Race(January 09 to January 10)
Jan-09 Jan-10
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Figure6:
Percent
Change
in
Unemployment
by
Race
2009;
Source:
Bureau
of
Labor
Statistics
Figure7:MonthlyUnemploymentCountsbyRace;Source:BureauofLaborStatistics
Figure8:MonthlyUnemploymentRatesbyRace;Source:BureauofLaborStatistics
22.3%
32.2%
38.4%
33.9%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
White Black Latino Total
Percent Change in Unemployment, by Race:(January 2009 to January 2010)
Count Dec08 Jan09 Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09 Oct09 Nov09 Dec09 Jan10
White 8,458 8, 815 9,408 9,996 10,213 10, 874 10, 986 10,927 11, 254 11, 366 11, 813 11,589 11,266 10,782
Black 2,150 2,278 2,396 2,367 2,676 2,650 2,617 2,600 2,682 2,701 2,754 2,757 2,843 2,929
Latino 2,089 2,186 2,433 2,571 2,548 2,860 2,739 2,792 2,908 2,849 2,939 2,872 2,891 2,848
Total 11,400 11, 919 12,714 13,310 13,816 14, 518 14,721 14, 534 14, 993 15,159 15, 612 15,340 15,267 14,837
Source:ftp://ftp.bls.gov/pub/suppl/empsit.cpseea3.txt, http://www.bls.gov/news.release/empsit.nr0.htm
Rate Dec08 Jan09 Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09 Oct09 Nov09 Dec09 Jan10
White 6.7 7.0 7.5 8.0 8.1 8.6 8.7 8.7 8.9 9.1 9.4 9.3 9.0 8.7
Black 12.1 12.8 13.5 13.5 15.0 15.0 14.8 14.7 15.2 15.5 15.7 15.6 16.2 16.5Latino 9.4 9.9 11.0 11.6 11.4 12.7 12.3 12.4 13.0 12.7 13.1 12.7 12.9 12.6
Total 7.4 7.7 8.2 8.6 8.9 9.4 9.5 9.4 9.7 9.8 10.1 10 10 9.7
Source:ftp://ftp.bls.gov/pub/suppl/empsit.cpseea4.txt, http://www.bls.gov/news.release/empsit.nr0.htm
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Figure9:Recenttrendsinunemploymentbyrace;Source:BureauofLaborStatistics
Figure10:ActualJanuary2010unemploymentratescomparedtoprojected2010unemploymentrates(projectedtooccurin
2010 without a recovery bill). Actual January 2010 unemployment figures from the Bureau of Labor Statistics, projected
figuresbasedonanalysisinthereportWithoutAdequatePublicSpending,ACatastrophicRecessionforSomepreparedby
Lawrence Mishel and Heidi Shierholz and published by the Economic Policy Institute (January 2009).49
Note: Latino teen
January2010figureisnotseasonallyadjusted,noseasonallyadjustedfiguresavailableforLatinoteensinJanuary2010.
9.4 9.39.0
8.7
15.7 15.616.2
16.5
13.112.7 12.9 12.6
10.1 10 109.7
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
Oct09 Nov09 Dec09 Jan10
RecentUnemploymentTrends(Rate)byRace
10/2009to1/2010
White Black Latino Total
9.7 8.7
16.512.6
23.5
43.8
37.2
10.2 8.9
18.2
13.1
30.1
55.7
35.7
0
10
20
30
40
50
60
Total White Black Latino WhiteTeens BlackTeens LatinoTeens*
ActualJanuary2010unemploymentvs.unemploymentprojectedto
occurin2010withoutarecoveryact
ActualJan2010UnemploymentRates 2010RatesProjected(WithoutaRecoveryBill)
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Additionally,thetracking,reportingandaccountabilitymethodsforARRAhavecontinuedtoundermine
theabilitytogaugethetrueemployment impactofARRA investmentsandgrants.AlthoughARRAhas
many requirements for tracking, accountability and transparency, one of the most significant
shortcomings of the tracking efforts thus far is the failure to record data pertaining to the impact of
investmentsandjobcreationformarginalizedgroupsandcommunities.Manyofthetrackingmeasures
failto
consider
some
basic
indicators
related
to
community
need
and
distress,
such
as
geography,
race,
andgender.Themainchallengetotrackingtheimpactofrecoveryexpendituresisthelackofraceand
genderdataat theemployee level. According tothe July22,2009OMBGuidancememo,ARRA fund
recipientsarenotrequiredtotrackandreportdataoneithercategory.Althoughgeographicaldataare
trackedbyrecipient,recipientsarenotrequiredtotrackemployeeleveldata.Failingtotrackemployee
leveldatabyrace,gender,andgeographywillmake itverydifficulttodeterminewhetherARRAfunds
are reaching marginalized communities and, more broadly, whether the economic recovery is truly a
recoveryforallAmericans.
The challenges associated with tracking resources and determining their impact upon marginalized
communitieshave
been
compounded
by
recent
changes.
.Following
increasing
sentiment
that
ARRA
has
had no real impact upon local unemployment,50 the White House recently made changes to the
methodology for howjob impact will be reported. While the original methodology was intended to
count the number of newjobs, or the number ofjobs that would have otherwise been lost without
ARRA intervention, beginning with 2010, the tracking measures will only be counting the work hours
thathavebeenpaidforwithARRAresources,fundamentallydismantlinganyabilitytodeterminewhere
jobshavegenuinelybeencreatedorsaved.51
c. Procurement&Contracting
ContractingandprocurementaretheprimarywaysARRAcanbenefitprivatebusinessesandemployers.
Minority
business
(and
disadvantaged
business)
contracting
is
a
critical
source
ofjob
and
wealth
creationformarginalizedgroupsandcommunities.Greatconcernshavebeenraisedabouttheabilityof
minorityfirmstosuccessfullycompeteforcontracts.52Whilesomestates(suchasMaryland&Colorado)
havemadeeffortstoopenaccesstostimulusresources,manyminorityandsmallfirmsareexperiencing
challenges accessing stimulus contracts, due to poor outreach by states, labor contracts which favor
largerWhiteunionfirms,and limitedbusinesscapacity. Inresponse,someminoritybusinessnetworks
areattemptingtocollaboratetogainaccesstostimuluscontracts,butprogresshasbeenlimited.53
Although consistent state level data on ARRA contracting to minority firms is not widely available,
figures from federal procurement indicate very troubling and disparate contracting patterns when
reviewingdata
on
procurement
to
minority
and
women
owned
businesses.
While
Black,
Latino,
and
Womenownedbusinessesrepresent5.2%,6.8%,and28.2%respectively,54asofFebruary1,2010,they
hadonlyreceived1.1%,1.6%,and2.4%ofallfederallycontractedARRAfunds(SeeFigure11).55Ofthe
$45 billion in direct federal contracts allocated by February 1st2010, less than $2.4 billion (5% of the
total)wereallocatedtoBlack,LatinoandWomenownedbusinesses(SeeFigures11and12).
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Figure11:FederalARRAContractProcurementbyBusinessType(AsofFebruary1st2010)
Business Type Contracts Amount % of Contracts % of Amount
Small Business 11,933 $7,498,160,470 36.2% 16.5%
Total for All Non White Owned 4,721 $3,409,766,348 14.3% 7.5%
Women Owned 2,655 $1,100,301,476 8.1% 2.4%
Hispanic Owned 1,232 $725,105,107 3.7% 1.6%
Black Owned 864 $496,588,134 2.6% 1.1%
Total for All Contracts 32,946 $45,505,971,648
Source: Federal Procurement Data System (www.fpds.gov), Recovery Report; 2/1/2010Figure12:FederalARRAContractProcurement(Volumeof$'s)byBusinessType
HistoricalchallengesinminoritycontractingatthestatelevelandrecentreportsfromtheStatessuggest
similartrendsmaybehappeningwithStatelevelARRAcontracts.In2008,theCaliforniaDepartmentof
Transportation only procured $3.1 million out of $2.3 billion in state transportation contracts.56
Research recently conducted by the Kirwan Institute on Florida Department of Transportation
contracting to minority businesses, found few ARRA contracts allocated to minority firms, despite
attemptsbytheStatetosupportminorityprocurement.57
d. RelieffromtheHousingCrisis?
Thesubprimelendingandforeclosurefiasco,akeydriverofthecurrenteconomicrecession,continues
todestabilize
families
and
neighborhoods
across
the
country.
The
Neighborhood
Stabilization
Program
(NSP),whichallocatesfundstocommunitiestobuyandrehabilitatevacanthomes,hasbeencriticizedas
toolittle,toolate.Inmanycommunities,thenumberofvacanthomesisseveralthousandtimesthatof
thenumberofhomespotentiallysalvagedbyNSP. Forexample,anestimated31to39propertiescan
be remediated in Oakland,CA (depending on the sale price of the property). Data from the Oakland
CommunityLandTrustindicatesthat10,249propertieswereindefaultintheCityasofDecember2009,
with936newdefaults in2009alone. Second,becausetheprogramdirectsthefundstobeusedto in
hardesthitneighborhoods(aprinciplethatseemssoundonitsface), itmaybeputtingitsdrops inthe
36.2%
14.3%
8.1%
3.7%2.6%
16.5%
7.5%
2.4% 1.6% 1.1%0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
SmallBusiness TotalforAllNon
WhiteOwned
WomenOwned HispanicOwned BlackOwned
FederalARRAContractProcurementbyBusinessType
%of
Contracts %
of
Amount
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wrongbucket:ratherthantryingtosalvageafewhomes inanoverwhelmedneighborhood, itmaybe
bettertomoveforeclosedfamiliesintorehabilitatedhomesinmorestableneighborhoods.
Infact,thefederalgovernmenthasaddressedtheforeclosurecrisisprimarilyoutsideofthestimulusbill,
through the Department of Treasury programs. By all accounts, even Treasurys programs have not
performedwellenough. Withmillionsoffamiliesfacing foreclosure,comparativelyfewhavereceived
permanent
loan
modifications
under
Making
Home
Affordable,
which
includes
both
HARP
and
HAMP. HARP was designed forborrowerswho are underwater,or owemore than their home is
worth. Unfortunately,manyhomeownersareso farunderwatertheycannotqualify forarefinance;
nordotheyhavetheabilitytopayclosingcosts,giventhattheyhaveexhaustedthemselvesfinancially
trying to keep current on the mortgage. As of October 2009, about 130,000 of the five million
potentiallyeligibleloansweremodifiedunderHARP.58WithregardstoHAMP,outofthethreetofour
millionhouseholdstargetedbytheprogram,110,000havebeenapprovedforpermanentmodifications
asof lateDecember,withagreatmanymore intemporarymodifications(theAdministrationreported
in January that a total of 850,000 homeowners have received temporary or permanent HAMP
modifications59). Two macroscale forces are weakening the programs, including continually falling
home prices and increasingjoblessness. The voluntary nature of the programs, and the fact that
mortgagecompaniescancollect lucrative fees from longterm delinquency,60has slowedservicerand
lenderaction.
Inshort,thescaleandscopeofthecrisishasoverwhelmedthe federalresponse. TheAdministration
should now consider more immediate significant actions, such as requiring equity writedowns and
givingbankruptcyjudges the right toamendmortgages. Inbroader terms, thesubprime lendingand
foreclosurecrisis requiresnothingshortofa largescale,systemic reconfigurationof federalpriorities,
includingeffectivebankregulationandconsumerprotection. Forexample,thenewmodelthatbanks
havedevelopedtoservelowerincomeandlowerwealthcustomersdependslargelyonfees.Mortgage
companies first shifted from interest to feebased income by originating loans to sell, not hold; then
banksfollowedsuitwithotherproducts. Whatssignificantaboutthisshiftonethat,unsurprisingly,
disproportionatelyburdenspeopleofcolor isthat itactuallyworsensthe financialoutlook formost
families.
From
subprime
mortgage
pre
payment
penalties,
to
credit
card
fees,
to
insufficient
funds
fees,
toremittancefees,feesdigpeopledeeperintodebt.Thefeestructureisinfactactivelyhamperingloan
modificationprograms;servicersprefertocontinuetocollectinvestorfeesratherthanmodifyloans.
***********************
Formoreinformationonthehousingandcreditchallengesfacingcommunitiesacrossthecountryinthe
wakeofthecrisis,pleaseseeourrecentlyreleasedreport,FairCreditandFairHousingintheWakeoftheSubprimeLendingandForeclosureCrisis:FindingsfromtheKirwanInstituteInitiativeavailableatwww.kirwaninstitute.org. The report reflects conversations with twentyfive diverse Advisory Board
Members,fourteen indepth commissioned works by leading academics andpractitioners, and an in
personlookatthefairhousingandfaircreditlandscapeindistinctlydifferentregionsacrossthecountry.***********************
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4. ReflectionsfromtheField
The following section of this report presents reflections by leading experts and advocates who have
worked to produce equitable recovery policy and outcomes for marginalized communities. The
reflectionsoftheseexperts in the field illustratesomeof thechallengesandopportunities, invarious
domains(education,
procurement,
housing),
and
at
both
the
national
and
state
level,
associated
with
ARRA in itsfirstyear.Inaddition,commentatorsreflectontheARRAsabilitytoaddressthe impactof
thehousingcrisisoncommunitiesofcolor,whileexploringtheroleofTARP inaddressingfairhousing
challenges.Inclosing,organizersandadvocatesfromOhio,Florida,MinnesotaandNewYorkreflecton
the impact of ARRA in producing economic relief and equity for marginalized communities. These
reflections explore impacts of the green economy of workers of color, contracting challenges and
opportunitieswithARRA,dataandtransparencyconcernsandareasofreformfordatacollection.These
collective reflections paint a compelling view of the critical lessons learned from ARRA, and present
insightfulcommentaryofwhatneedstohappentopromoteafairrecoveryforall.
a. NationalReflections:Social,RacialEquity&ARRA DominiqueApollon,AppliedResearchCenter
LauraBarret,TransportationEquityNetwork
JacobFaber,CenterforSocialInclusion
DennisParker,ACLU
AnitaSinha,AdvancementProject
JuhuThukral,TheOpportunityAgenda
PhilipTegeler,Poverty&RaceResearchActionCouncil
DeidreSwesnik,NationalFairHousingAlliance
b. ReportsfromtheStates:Organizing,Advocacy,Equity&ARRA AmyHanauer,PolicyMattersOhio
GihanPerera,MiamiWorkersCenter
SondraYoudelman,CommunityVoicesHeard
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NATIONALREFLECTIONS:SOCIAL,RACIALEQUITY&ARRAONEYEARLATER
ARRA1YearLater:Recovery,GreenJobsandCommunitiesofColor
DominiqueApollon,AppliedResearchCenter
At theAppliedResearchCenter (ARC), we believe thatARRAmustnot succumb to the myth that the
principalreason
women
and
people
of
color
are
woefully
underrepresented
in
green
jobs
is
their
lack
of
skills,preparation,and/ordesire.Whatourcommunitiesneedisjobcreation,notjustjobtraining.And
even where jobs are created, we must remove structural barriers and discrimination that limit
communitiesofcolorandwomensaccesstogoodqualityjobs.
ARRAwillnot liveuptoPresidentObamaspromiseof"helpingthosehardesthitbytherecession," in
largepartbecausetherearenoracialandgenderequitystandardsinplace.TheRecoveryActisunlikely
to alter the status quo of white men dominating greenjobs and green entrepreneurship if the focus
remainssolelyorevenprimarilyonjobtraining(accordingtotheWomenofColorPolicyNetwork,less
than30% of greenjobs areheld byPOC,andgenderdisparitiesare evenmore stark.ARCanalysisof
Equal Employment Opportunity Commission data found that less than 9% of energy sector firms are
owned/managedbyPOC).AreviewofmanyARRAgrantsinthegreensector,includingPathwaysOutof
Poverty,Energy
Training
Partnership,
and
State
Energy
Sector
Partnership
and
Training
grants,
reveal
thatonthecriticalmatterofjobplacement,littletonoaccountabilityisrequiredofARRArecipients.
Insteadofjobtrainingalone,recoverydollarsmustconcentrateonthetargetedcreationofjobs inthe
communities that suffer most from unemployment and barriers to employment. More thanjust the
trainingprogramsofPathwaysOutofPoverty,weneedguaranteedGreenCareerLaddersthatscreenin
POC/women into familysustaining, green careers. A true recovery will do more than simply train
womenandpeopleofcolorforjobsthatdonotyetand indeedmayneverexist intheircommunities,
anditwillensurethemaccesswhenandwherejobsarecreated.
As part of our Green Equity Toolkit for community organizations, interested in advocating for the
creation of goodquality greenjobs and for equitable outcomes, ARC highlights an example ofjob
creation inacasestudyongreenretrofitsofLosAngelescitybuildings.SCOPE,themainadvocatefor
the retrofit policy, also identified ways of reducing structural barriers to employment (for example,
providingchildcareforsinglemotherssotheycanparticipateinatrainingprogram).
ARRA isbutafirststeptoward liftingourcountryoutofthisrecession.Now,weneedto insertequity
standards inreportingrequirementswithaccountabilitymechanismstodemandthereturnof funds if
equity isnt practiced. Also known as the clawback, these mechanisms would be similar to those
announcedby theOMBonDecember18th to terminateawardsand/or revokea recipientsability to
receivefuturefundswhentheyfailtoupholddatareportingstandardsortocorrectreportingproblems.
Without collecting the data on who is receivingjobs that are actually created, ARRA funds forjob
trainingareunlikelytotrulyhelpthosewhohavebeenhardesthit. Again:jobcreation,notjustjob
training.
DominiqueApollon
is
Research
Director
at
the
Applied
Research
Center,
aracial
justice
think
tank
and
homeformediaandactivismwithofficesinOakland,CAandNewYorkCity.www.arc.org
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ARRAOneYearLater:Transportation,InvestmentandEquity
LauraBarrett,TransportationEquityNetwork(TEN)
Thestimulusbillwasan extraordinarychance to reverse thesystematicdenialofopportunity to low
incomepeopleandpeopleofcolor.Itssignificantinvestmentsintransportationinfrastructureprovided
awaytobegintoreshapeourmetropolitancenterstospureconomicgrowth,reverseongoingpatterns
ofde
facto
segregation,
and
promote
sustainable
development.
Intherushtogetthefundsoutthedoor,manyofthoseopportunitieswerelost.TheU.S.Department
ofTransportationhasdisclosedthatofthe$48billioninfederalstimulusfundscommittedforhighway
constructionviastatesasoftheendof2009,only$986million(2%)werecommittedtodisadvantaged
andminoritycontractorsinspiteofamandatoryminimumof10%.TEN itselfdiscoveredthatofthe
$163.8million incontracts theUSDOTawardeddirectly (notviastates),$9.7millionwent towomen
ownedbusinesses,$4.7milliontoHispanicownedbusinesses,and$0toBlackownedbusinesses.
We have heard from minority contractors and TEN members that minority firms need technical
assistance,bondingcapacity,andgreateraccesstoinsuranceinordertoleveltheplayingfieldforthese
contracts.ThoughTransportationSecretaryRayLaHoodhastakenstepstoexpandbondingassistance,
statesand
localities
have
clearly
paid
too
little
attention
to
these
issues.
And
in
spite
of
the
competitive
biddingsystem,minoritycontractorsarestrugglingwithanoldboysnetworkthathas leftthemout in
thecoldforyears,andleftstatesfallingfarshortoftheirdisadvantagedbusinessparticipationgoalslong
beforetherecession.
TheObamaadministrationneedstoensure,whetherbyexecutiveorderortakingtheleadinCongress,
that detailed demographic information is recorded and publicized on exactly who is winning these
contractsandwhoisactuallyperformingthework.
Wealsoneedtoguaranteethatfuturegrowthissustainablebotheconomicallyandecologically.TENs
GreenConstructionCareersmodel,whichwasincludedintheAmericanCleanEnergyandSecurityActof
2009(ACESA),wouldachievethisbybuildingmasstransitandbridgesandrepairingexistinghighways;
employingsignificantnumbersoflowincomepeople;andleadingtolongtermconstructioncareers.
Itsnottoolateforfederalactiontoseizetheopportunitiesmissedbythefirststimulus.Infact,weneed
itmorethanever.
LauraBarret is theExecutiveDirectorof theTransportationEquityNetwork (TEN).TheTransportation
EquityNetwork (TEN) isagrassrootsnetworkofmore than350communityorganizations in41states
workingtocreateanequitybasednationaltransportationsystem.TENseekstomeetthechallengesof
current crises in the economy, energy security, and climate change by building healthy, equitable
communitiesandprovidingequalpublictransportationaccesstoall.www.transportationequity.org
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ARRA1YearLater:Wheresthedata?Thepromiseoftransparencyhasyettobefulfilled
JacobFaber,CenterforSocialInclusion
Americawillcomeoutofthisrecessionstrongerifallcommunitiesexperiencerecovery.Todothat,weneed
transparencytoknowifrecoverydollarsarereachingthehardesthitcommunities.Trackingthedollarsinthis
wayalsomakesvisiblewhengovernmentinvestmentimproveslivesandstrengthenscommunities,andwhen
it
doesnt.
We
cannot
do
this
without
the
right
data.
So
far,
the
promised
transparency
of
the
American
RecoveryandReinvestmentAct(orStimulus)hasfallenshort.
TheGreatRecessionishittingcommunitiesofcolorhardest.
Thesubprimelendingandforeclosurecrisistoredownourwholeeconomyandisaffectingeverycommunity.
A disproportionate number of these preyedupon borrowers were people of color. Black and Latino
borrowersearningover$350,000weremorelikelytoreceivesubprimeloansthanWhiteborrowersearning
under $50,000 a year in 2006.61
Homeownership rates among people of color fell twice as far (0.9%)
between2007and2008comparedtoWhites(0.4%)andthis isonlythefirsthalfoftherecession.62
Job
loss, while painful across the country, has also had its deepest impact in communities of color.
UnemploymentforBlacks(16.2%)andLatinos(12.9%)hasrisenhigherandfasterthanthenationalaverage
(10.0%) especially among youth.63
These disparities show us how much race still matters in shaping
opportunity.
Transparencyeffortsareagoodstart,buttheyhavealongwaytogo.
Recovery.gov isastep intherightdirection,butthesiteoffersnowaytomeasurehowequitablystimulus
dollarsarespent.Theresnoaccuratelocationlistedformanyinfrastructureimprovements.Forexample,the
HousingAuthorityofNewYorkCityisreceivingagrantfor$423,284,344. Itisunlikelythataffordablehousing
isbeingbuiltattheaddressprovidedbyRecovery.gov:NewYorkCityHall.Similarly,jobcreationestimates
areunreliableandtheydonttelluswhoisgettingjobs.Thesamegrantmentionedabovewillonlycreateor
save27.3jobsatthecostof$15,504,921perjob.Ifwedontknowwherethehousingisgoingup,orwhois
gettingthe27.3jobs,wedontknowwhetherStimulusisreachingthosewhoneed itmost,thehardesthit
communities.
Whatcan
be
done
to
improve
transparency?
TheOfficeofManagementandBudget (OMB)mustrequiretheprecise locations forallprojectsandthe
race/ethnicity,gender,andzipcodeofemployedindividuals.Asafirststep,thiscanbedonebyadjustingthe
RecipientReportingDataModel.
JacobFaberisaseniorresearcheratTheCenterforSocialInclusion.TheCenterforSocialInclusionworksto
transformstructuralbarrierstoopportunityforcommunitiesofcolor,andensurethatweallshareinthe
benefitsandburdensofpublicpolicy.www.centerforsocialinclusion.org
Figure13:SampleDataAvailablefromNewYorkStimulusTrackingWebSitewithcommentaryinsertedbyauthor.
-
8/14/2019 ARRA and the Economic Crisis
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Page|23
ARRA1YearLater:AssuringMinorityBusinessProcurementforARRAContracts
DennisParker,ACLU
From the very beginning of discussions about the American Recovery and Reinvestment Act of 2009
(ARRA), advocates recognized that any efforts to stimulate the economy would have to address the
plightofpeopleofcolorandwomenwhohadneverbeenfullparticipantsinthenationseconomyand
whohadonlybeenpushedfurthertotheperiphery inthecurrentdownturn.Atthesametime,ARRA
presented an unparalleled opportunity to counteract the effects of the downturn while promoting
inclusion in the national economy for the previouslyexcluded groups. It was equally clear that the
success of such an effort would depend on the efforts of government officials to include racial and
genderequalityconsiderationswhenshapingprogramssupportedbyARRAfunds.
Onebarriertotheproperconsiderationofrace,ethnicity,andgenderinshapinggovernmentpolicywas
themistakennotionthatthelawprohibitsgovernmentfromtakingraceandgenderintoconsideration.
The erroneousnotion was only reinforcedbymisreadingof the significance ofRicciv.DeStefano, the
United States Supreme Court June 2009 decision regarding the use of test scores to determine
promotionsofwhite,AfricanAmericanandHispanicfirefighters inNewHaven,Connecticut.Infact,as
described
in
documents
contained
in
the
FairRecovery.org
website,
state
and
local
governments
have
always been able to employ race and gendersensitive, or even, in some circumstances, race and
genderbased,approachestothedisbursementofARRAfunds.NothingintheRiccidecisionchangedthe
ability of governmental bodies to take these approaches. In factRicci interpreted Title VII of the Civil
RightsActof1964andnot theEqualProtectionClauseoftheFourteenthAmendmentwhichgoverns
theconsiderationofraceandgenderingovernmentaldecisionmaking.
Three documents on the www.FairRecovery.org website provide guidance for government officials
seekingtodesignprogramswhichwillbenefitthepeopleofcolorandwomenwhohavefelttheeffects
ofeconomicproblemsmostharshly.ExpandingEconomicOpportunityThroughtheAmericanRecovery
and Reinvestment Act of 2009 the Legal Landscape sets forth the general rules governing the
consideration of race and gender as interpreted by the United States Supreme Court. Promoting
Opportunity
and
Equality
in
America:
Part
II
provides
an
outline
of
the
development
of
the
applicable
lawineachofthefederalcircuitsinthenation.PromotingOpportunityandRacialEqualityinAmerica:A
Guide for Federal, State and Local Governments helps to provide a blueprint for designing programs
which further racial and gender equality in ways consistent with the Fourteenth Amendment. Using
these tools as a guide, government officials can begin to construct policies which consider racial
classifications or are, in some circumstances, explicitly raceconscious in order to assure equal
opportunityforparticipationinaneconomicrecoveryandinthenationseconomiclifeingeneral.
Thesematerialsdemonstratethatthelawisnotabarriertoeffectiveeffortstoreversepracticeswhich
haveexcludedpeopleofcolorandwomenfromfullparticipationinthenationseconomiclife.Without
a conscious effort to include principals of racial and gender fairness in the creation of programs
supported by ARRA funding, state and local governments would be squandering an unprecedented
opportunity
to
assure
fairness
while
contributing
to
the
economic
health
of
the
country
as
a
whole.
DennisParkeristheDirectoroftheACLUNationalOfficesRacialJusticeProgram(RJP).Concentratingon
issuesoftheschooltoprisonpipelinewhichfunnelschildrenofcolorfromtheeducationalsysteminto
thecriminaljusticesystem,racialprofiling,affirmativeaction,indigentrepresentationandfelon
enfranchisement,theRJPseekstoremovebarrierstoequalopportunityforcommunitiesofcolorthrough
litigation,publiceducation,communityorganizingandlegislation.www.aclu.org
-
8/14/2019 ARRA and the Economic Crisis
26/44
ARRA1Y
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-
8/14/2019 ARRA and the Economic Crisis
27/44
ARRA1Y
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ssets,
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-
8/14/2019 ARRA and the Economic Crisis
28/44
Page|26
ARRAandAccesstoOpportunityatHUDandtheU.S.DepartmentofEducation
PhilipTegeler,Poverty&RaceResearchActionCouncil
TheAmericanRecoveryandReinvestmentAct isdesignedtostimulatetheeconomyandhelpfamilies
hardest hit by the recession, but it also represents a onceinalifetime opportunity to transform the
discriminatorystructures
that
have
perpetuated
inequality
and
helped
to
fuel
the
recession.
In most areas of the federal budget, targeting specific geographic areas can be an effective way of
bringingjobs and other resources to disadvantaged families hit hardest by the recession. But when
assessingthedeploymentofhousingandschoolresources,wealsoneedtorecognizethatgovernment
policiesthatconcentratepoorpeopleofcolorinparticularneighborhoodsandschoolsarealsohelping
todriveinequalityandstructuraldisadvantage. Inhousingandeducation,poorfamiliesneedaccessto
highopportunityschoolsandcommunities,notmoresegregation. Newopportunitiesforpeople,not
places,needtobetheprimarytargetsofARRAinvestmentinhousingandeducation.
Forexample,atHUDandtheDepartmentofTreasury,programslikethePublicHousingCapitalFundare
supporting
muchneeded
improvements
in
the
public
housing
stock
without
giving
public
housing
residentsanynewchoicesaboutwheretolive. OtherARRAhousingprogramssharesimilarproblems:
the$2billionNeighborhoodStabilizationProgramneedstoberevisedtoopenuprentalopportunities
inhighopportunitycommunities;and the$2.25billion fundingprogram tostimulate theLow Income
HousingTaxCreditprogramshouldbecomeavehicle todrive longoverdue civil rights reforms in the
program,notsimplycontinuebusinessasusual.
Similarly,attheDepartmentofEducation,vastsumsofARRAfundingareflowingintoexistingstateand
localeducationstructuresthatinmoststatessupportseparateandunequalschoolsforpoorchildrenof
color. EventhetwocompetitiveARRAfundsthatsupporteducation innovationtheRacetotheTop
Fund ($4.35 billion) and the Investing in Innovation Fund ($650 million) include no incentives or
requirementsfor
applicants
to
reduce
racial
and
economic
concentration
in
K12
education.
By passing money through existing funding structures for housing and education, HUD and the
Department of Education risk reinforcing existing inequalities that are tied to place. These agencies
shouldreexaminetheirapproachinthesecondyearofARRA,toexpandopportunitiesforfamiliesmost
affectedbytherecession,ratherthanjustfundinghousingandschoolsindisadvantagedplaces.
PhilTegeleristheExecutiveDirectorofthePoverty&RaceResearchActionCouncil(PRRAC).PRRAC's
primarymissionistohelpconnectadvocateswithsocialscientistsworkingonraceandpovertyissues,
andtopromotearesearchbasedadvocacystrategyonstructuralinequalityissues.www.prrac.org
-
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29/44
Page|27
FairHousingandtheRecovery:MovingPastARRATARP,FairHousingandtheHousingCrisis
DeidreSwesnik,NationalFairHousingAlliance
The federal Fair Housing Act passed in 1968 has the dual mission to both eliminate housing
discrimination
and
promote
residential
integration.
In
order
to
promote
integration,
the
Fair
Housing
Actrequiresthatgovernmentagenciesspendfundsdedicatedtohousingandcommunitydevelopment
inamannerthataffirmativelyfurthersfairhousing.Thisobligation isnot limitedtotheDepartment
of Housing and Urban Development; rather it applies broadly and means that government agencies
spendinghousingandcommunitydevelopmentfundsandrecipientsofgovernmentgrantsmustuse
thosefundsinawaythathelpscreateintegrated,healthyneighborhoods.
AsAmericastruggles toemerge from itscurrenteconomicstruggles, the requirement toaffirmatively
further fair housing is as important as ever. Government efforts to jumpstart the economy have
involvedmassivespendingonhousingandcommunitydevelopment.Forexample,theTroubledAsset
Relief Program (TARP), the single largest program in place to address the economic crisis, has
recapitalized banks with the intention of restoring their ability to lend and has worked to provide
homeownerson
the
brink
of
foreclosure
with
opportunities
to
modify
their
loans
before
it
is
too
late.
Becausetherecessionhashitcommunitiesofcolorthehardest,andbecausetherecessionbeganinpart
becauseoffaileddiscriminatorymortgage loansmadeinthosecommunities,anyattemptstoeasethe
recession must involve explicit plans to increase residential and economic opportunities for the
residentsofthoseneighborhoods.
If TARP funds are to be administered in a way that affirmatively furthers fair housing, the federal
governmentmust: (1)analyze itsownprograms for raciallydisparate impactsandadjustprograms to
eliminatethoseimpacts;(2)identifywaysinwhichgranteesandrecipientsofitsfundscanaffirmatively
furtherfairhousingandevaluatetheirperformancebaseduponthiscriteria;and(3)allocate fundsto
communitygroupswithexperienceconnectingpeopletoeconomicandresidentialopportunities.The
financial services industry can also take specific steps to meet its fair housing obligations by offering
responsibleloans
that
enable
community
choice,
assuring
fair
marketing
of
properties,
sponsoring
non
discriminatoryforeclosurepreventionefforts,andfinancingfaireconomicdevelopmentopportunities.
Advocates play an important role in this equation: they must remind the federal government of the
importance of affirmatively furthering fair housing, use publicly available information to evaluate the
performanceofTARPrecipients,challengeTARPrecipientsthatareneglectingtheirresponsibilities,and
partnerwithwillingTARPrecipientstoprovidemeaningfulopportunitiesfortheAmericanpublic.
Deidre Swesnik is the Director of Public Policy and Communications at the National Fair Housing
Alliance.TheNationalFairHousingAllianceisthevoiceoffairhousing.NFHAworkstoeliminatehousing
discrimination and to ensure equal housing opportunityfor allpeople through leadership, education,
outreach,membershipservices,publicpolicyinitiatives,advocacyandenforcement.
www.nationalfairhousing.org
-
8/14/2019 ARRA and the Economic Crisis
30/44
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-
8/14/2019 ARRA and the Economic Crisis
31/44
Page|29
BeyondtheQuickFix:FightingforaFairRecoveryinFlorida
GihanPerera,MiamiWorkersCenter
WhentheARRA,(i.e.stimulus)wasfirstannouncedweknewthattherewasthepossibilitythatitcould
right historic wrongs and create longneededopportunity through massive investment. However, we
alsohad
experience
that
the
funding
pipelines
went
directly
around
the
communities
in
most
need.
The
question for us: How do you take advantage of the historic opportunity of government investment
withoutourcommunitiesgettingleftoutofit?
Trackingthedata
Wedecided to track the stimulusmoneydown into the SunshineState.Ayear into it,wearent that
surprisedbytheresults,butweknowthat itsnotenoughtojustwhineabout it. WiththeTeaParty
generationcomplainingabouteverythinggovernmentdoes,wehavetobesmart.
Before we even started our research we knew the data was going to lead us to dead ends. Our
governmentdoesnothavethepropertrackingmechanisms inplacetoensuretrackingofgovernment
spendingandjobcreationfromthefederaldowntothelocallevel.Tobeginmakingarealargumentfor
targetedinvestment
in
our
communities
we
had
to
be
able
to
have
facts
that
everyone
could
agree
on.
Ourfirstdemand isforamuchdeeperanddetailedtrackingofthemoney. It isasimpleandessential
action,andtransparencywasabedrockoftheObamapresidentialcampaign.
ThePipelinesArentBroken
Simultaneously,weusedthedatawehaveandactualexamplestoseewhat'shappening.InFlorida,as
bigcontractscomedowntocountiesandmunicipalities,smallerminorityownedfirmscouldnotwin
bids on the work. They rarelyevenhaveaccess to the agenciesand processes forapplying. This is a
hugeproblembecauseminorityownedfirmsarefarmorelikelytoemployminoritiesandgenerallywill
uselinkageswithintheircommunities.However,thesebusinessescannotgetinthedoor.Thepipelines
forARRAmoneyarethesameonesthathaveledtotheunderdevelopmentofminorityownedfirms
andcommunities
in
the
first
place.
The
result
is
the
inequitable
distribution
of
opportunity
across
racial
communities.
Weneednewpipelines
Currently,there isauniversalistapproachtothedistributionofARRAfunds. Theunsaidphilosophy is
that money that gets injected 'blindly' into the economy will benefit everyone through a general
economicresurrection.Theproblemisthattheeconomyisnotuniversal;itisparticularlystructuredto
denyaccesstomarginalizedcommunities. It isonly ifnewpipelinesaredeliberatelydirectedtothose
communitiesthatwewillseeadifference. Itmustbedoneinamannerthatrecognizesandaddresses
theirparticularhistoryandstructuralneeds. This isnotonly importantforthesecommunities,butfor
allofus,becauseafterall,theeconomiccrisisimplodedexactlywherethegeneraleconomymetthese
marginalized communities. To restructure inequality