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Why Obama’s ‘Black Job Plan’ Won’t Resolve Black Unemployment

Submitted by on September 25, 2011 – 9:58 pmNo Comment

Why Obama’s ‘Black Job Plan’ Won’t Resolve Black Unemployment

Tamara K. Nopper

September 25, 2011

Recently, President Barack Obama addressed the Congressional Black Caucus (CBC) and concerns that he was ignoring the disproportionately high unemployment rate among African Americans.  Defending his American Jobs Act, Obama emphasized the measure that would provide tax cuts to businesses–and specifically mentioned 100,000 Black-owned firms–if they hired a new worker or gave workers a raise.  One CBC member was quoted as saying that Obama’s speech “showed he’s going to fight.”

Obama’s jobs act will not make a dent in Black unemployment, which is now at a staggering 16.7%.  And despite emphasizing in his  CBC speech Black unemployment and  Black-owned firms, his proposal demonstrates more his capitulation to white supremacy than a willingness to challenge it.

Here’s why:

Tax cuts will not address the financial disparities that already exist among firms by race.  Indeed, Obama’s proposed measures for helping all (and not just Black) business owners in his jobs act privilege those firms with more money, that are more likely to be considered “innovative,” (hence the plan’s emphasis on patents and going global), who have a significant number of employees, and who are in the overall financial position to take advantage of a tax plan.  Black-owned firms already trail behind most other firms in most indicators.  Shown in the  most recent (2007) Survey of Business Owners, which is administered by the United States Census Bureau every five years, Black-owned firms make up only 7% of all U.S.-located firms.  Whites are over-represented  as business owners with 83% of all firms. The amount of receipts differs among racial groups, with Blacks only having $135 billion, which comprises less than 1% (.005% to be exact) of the $30 trillion in receipts for all firms.  The disparity in receipts does not necessarily reflect the number of business owned among racial groups.  For example, at an estimated 1.9 million, Black-owned firms outnumber Asian-owned firms by about 400,000, but the latter have over three times the receipts at $506 billion.  And while Blacks have about 300,000 less firms than Hispanics–the majority (91%) of business owners who identify as white, by the way–Black firms have only 40% of the  former’s receipts.  As a racial group, Blacks even lag behind  some ethnic groups.  Mexican American-owned firms, for instance, total about 1 million–a little under half of the firms for all Hispanics, regardless of race–a figure that is about 900,000 less than the number of Black firms, yet their receipts are higher at $154 billion.

These disparities are underscored when considering businesses that have employees, with the ability to have employees often related to the finances of a firm.  Black-owned employer firms make up 2% of all firms with employees, and whites own 81%.  Numbering only a little over 100,000, Black employer firms have receipts of $97 billion, which, like their receipts for all firms, make up 0% of all employer firms.  Asian American-owned employer firms have almost four times the total number and almost five times the receipts than Black employer firms, despite Asians comprising only one third of the population size of African Americans.  Controlling for the race of the business owner, Black employer firms, employing a total of about 900,000 people, pay the smallest average pay per employee among all employer firms.  Given this data, it is highly unlikely that tax cuts will alleviate Black unemployment as Black employer firms are already lagging financially behind those among most other racial groups. Even if Black employer firms, again totaling around 100,000, were all to hire one Black person, it is unlikely to decrease Black unemployment.   Given that an overwhelming majority of Black businesses are non-employer firms, it is highly unlikely that they will be in the financial position to grow their businesses by hiring workers–or to get the capital to do so–and thus “take advantage” of the proposed tax cuts.

One of the reasons why these statistics are so alarming is that a plethora of research, both from social scientists as well as just day to day observation and experience on the job market, demonstrates that African Americans are the least likely to be hired by non-Black firms.  And Black firms are already more likely to hire African Americans than non-Black firms.  Given the small number of Black employer firms, it is not surprising that unemployment rates for Black have generally surpassed all other racial groups, even when the economy was not in a financial crisis.   Non-Black firms, then, are not likely to hire a significant number of Blacks just to take advantage of tax measures (especially when there are growing numbers of non-Black unemployed to choose from) and Black firms, already lagging behind other racial groups by most indicators, cannot possibly be expected to resolve Black unemployment.  Nor could they if they wanted to as they don’t have the resources.

Some will say Obama did specifically deal with discrimination and Black unemployment in both his jobs act and his speech to the CBC.  For example, the proposal calls for challenging hiring discrimination against the unemployed.  However, how will he measure the unemployed in this policy?  Will it include the many Black people who are not even included in the Department of Labor statistic for unemployment?  Whatever the case, Obama’s jobs plan does not talk about racial discrimination.  Some may think it unnecessary for an act to do so given affirmative action policies.  Yet affirmative action policies have often been more commonly applied to corporate jobs and even then, corporate powers have largely determined what politically gets defined as affirmative action these days.  As the major source of new jobs, the overwhelming majority of small businesses are not subject to affirmative action policies due to the small number of people each firm employs.  And even if they were, the federal government has tended to be purposefully lax in enforcement and firms have also found ways to use what law professor Tanya K. Hernandez calls “the diversity defense” to hire non-whites but avoid having to account for discriminatory racial hiring practices.  In terms of talking about Black unemployment in his jobs act, the fact sheet–as well as his CBC speech–does cite the aforementioned Black unemployment rate.  More, the act mentions how Black youth are particularly affected so as propose a summer youth job program.  One purpose of the initiative, according to the jobs plan, is to help young people develop employment skills.  But many of these Black youth likely won’t be  hired  by non-Black businesses  so as to use and be paid for these skills, and again, Black firms  do not have the capacity to hire all of them.  Further, youth should not be in the position of financially supporting their communities and cannot be used to measure the financial health of their racial groups.  We would not expect whites dismayed about the financial crisis and their unemployment rate to focus simply on the employment prospects or summer job programs for white youth–indeed white youth are not even expected to work in the way Black youth are (nor  is employment promoted as an anti-incarceration initiative for white youth in the way it is for Black youth, but that’s another article). And summer programs are of course seasonal.  Finally,  summer youth programs do not resolve the fact that way too many Black adults cannot get jobs during any season.

Similar to some of his political predecessors, including Richard M. Nixon, Obama’s explicitly refers to Black unemployment and Black business in his CBC speech while promoting a Jim Crow economy–where Black people are largely left to their own devices to resolve a structural economic crisis with a little government support–in this case with the aid of a proposed tax plan for all firms that will  purportedly help 100,00 Black firms resolve Black unemployment or a summer jobs program in which Black youth can participate.  And similar to Nixon, who championed “Black capitalism” as a containment strategy to repress Black protest or criticism, Obama’s speech to a CBC increasingly and publicly frustrated with Obama’s response to Black unemployment, champions, albeit in a subtle way,  Black business owners as important social actors who he suggests will be “supported” (but not in a targeted way) through his proposed tax plan.  Like Nixon, Obama doesn’t challenge or address the larger political economy and anti-Black racism that is largely responsible for Black unemployment nor does he  purpose that non-Blacks have any responsibility in the economic life of African Americans, either in causing or resolving it.  Overall, an unwillingness to challenge racist hiring practices  towards Blacks among firms owned by non-Blacks–again 98% of all employer firms–can co-exist with Obama’s championing of Black firms in the name of addressing Black unemployment.

Overall, Obama’s jobs act and his speech to the CBC are examples of what sociologist Charles Gallagher terms “new colorblind racism,” meaning, unlike traditional colorblind racism, the approach minimally acknowledges racial inequality, and in this case, Black unemployment, without addressing racial hierarchies.  Although openly discussing the issue of Black unemployment and proposing a tax measure that will “benefit” all firms–and presumably 100,000 Black businesses as noted in his CBC speech–Obama does not challenge the existing financial disparities among businesses–or the role of  government programs and the financial institutions he perversely protects in shaping these disparities.  Rather, Obama’s CBC speech, in a Nixonian gesture that “recognizes”–some could even say celebrates–Black-owned firms, speaks simultaneously to both Black  middle-class (pro-)capitalists and working-class Black nationalists who value Black business as a sign of community health.  And despite his acknowledgment of the high Black unemployment rate and Black businesses, he also, like Nixon, simultaneously reassures non-Blacks that we will not be affected by his jobs act or by his  directed overtures, at least in speech, to the Black community.  In the end, Obama expects African Americans, in this case Black business owners and Black youth, to  largely shoulder the burden of resolving the Black unemployment crisis.

What Obama’s speech to the CBC demonstrates is not only his neoliberal tendencies but also his clever strategy of appearing race-specific in his policies.  Obama is an expert at racial double-speak and has found a way to promote a white supremacist agenda while still acknowledging race at certain moments.  And he has also found a way to appear as if he is championing African Americans, in the case of his CBC speech, Black business owners, while still permitting business as usual, which includes an unwillingness of non-Black firms to hire African Americans, a lack of government intervention into these hiring practices, an over-emphasis on developing Black human capital, and a capitulation to the white supremacist claim that the state cannot legislate hearts and minds and thus cannot force (job) integration.  While Obama may not win hearts and minds, he doesn’t have to let Blacks suffer just because non-Blacks are racist and are unlikely to stop being so anytime soon.  Instead, he can work towards another version of truly race-specific policies or adopt those that have  already been proposed by African American advocates.  Such initiatives are more likely to address Blacks’ economic status by creating economic programs that specifically target African Americans as a whole instead of simply shifting the burden of resolving Black unemployment on to the Black community.

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