Economic Recovery Funding and the Future of Federal Policy

Economic Recovery Funding and the Future of Federal Policy john a. powell Director, Kirwan Institute for the Study of Race and Ethnicity Williams Chair in Civil Rights & Civil Liberties, Moritz College of Law ABFE Annual Meeting at the Council on Foundations May 3, 2009 Atlanta, GA

Presentation Overview The role of foundations Promoting a just economic recovery Race-sensitive policy analysis of the stimulus The current recession & racially disparate effects Is the response addressing an uneven landscape of opportunity? Applying targeted universalism & systems thinking

Ways to Produce Change How do foundations think about ways in which you can make change? 3 options: 1) Do what’s “fair” - a lot of people receive a little help 2) Triage – help those who are in the worst situation 3) Transformative – figure out what went wrong in order to correct it

Transformative Change What can foundations do to produce transformative change? Collaborate and focus your efforts Allocate your money strategically – a little bit in a lot of places is not as effective as focused efforts that can later be replicated elsewhere Invest in learning models Invest in communications models and capacities

Toward a Just Economic Recovery Reflect on the intersection of need and opportunity Some communities and people have greater needs (i.e., communities suffering from high foreclosure rates) Focus on strategic interventions / turning points “ Will this make the water turn into steam?” Embrace advocacy We should be proactive rather than passive! This is our government, our money, and our opportunity!

G20 Protests in Europe - 2009 Reuters: Toby Melville; Digby Oldridge/PR Eye; Chris Ison/PA

Toward a Just Economic Recovery What are these billions of dollars actually fixing? Are we only fixing the ‘status quo’? Are we transformative yet? Are opportunity gaps shrinking? Mind the gap & fix the gap: Reduce the existing disparities between communities of color both in terms of people and places while growing the economy for all This requires: ■ Baseline ■ Monitoring ■ Strategy

Tracking the Funds: Job Creation through Transit Investment by Gender & Race Bivens, Josh, John Irons, and Ethan Pollack. “Transportation Investments and the Labor Market.” EPI Issue Brief #252, 7 Apr. 2009.

Opportunities for Philanthropy Short term: Draw on your experience and research Present a clear, informed perspective regarding communities of color that have been devastated by the economic recession Foundations need to proactively shape and direct the flow of money. Intervene in the public dialogue: Targeting the flow of stimulus money dispersed to states Connecting education and housing policy through the targeted use of LIHTC funds

Opportunities for Philanthropy Long term : Employ strategic communications regarding race Help push national dialogue to overcome the common binary of (1) we’re in a post-racial world where race ‘doesn’t matter’; (2) we’re stuck in the past where race is ‘everything’ Emphasize productive discussions around race that thoughtfully inform policy design and advocacy Capacity building Increase the participation of marginalized groups in policy design Improve data collection, monitoring, and evaluation of state and federal programs Legal advocacy

Racially Sensitive Policies What do racially sensitive policies look like? Targeted : They recognize the nature of our interconnected structures / larger inequitable, institutional framework. Pay attention to situatedness : They account for the fact that people are situated differently in the economic and social landscape of society. Driven by outcomes : It may seem great if unemployment is cut in half, but if all the jobs go to white males, serious problems remain. Include people of color in the process : Their input is vital.

Racially Sensitive Policies (con’t) What do racially sensitive policies look like? Transparent : - Transparency allows for gauging progress and making corrections if necessary. Multi-faceted : Incentivize a systems approach. Reorient how we think about policy. Serve as a bridge to the next economy : These policies should be the stepping stones for the future.

Race-Sensitive Policy Analysis of the Stimulus How do we make the stimulus fair, sustainable, accountable? Incentives for inclusion of people of color Grants and loans for small and minority-, women-, and community-disadvantaged businesses Collect data by race and gender to understand impacts of economic recovery policy Investment in public transit (prioritize projects that connect people to jobs) Wiley, Maya. “Economic Recovery for Everyone: Racial Equity and Prosperity,” Center for Social Inclusion, 12/2008.

The Current Recession: Racially Disparate Effects

“ In this economy, people of color benefit the least compared to their white counterparts during economic booms and suffer disproportionally more during economic downturns. As W.E.B. DuBois once said, To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships.” http://www.arc.org/images/fr08/compact/ARC_compact_economy.pdf

The Current Recession The current recession has affected everyone – but not all to the same degree. Although the U.S. has been in a recession for more than a year, people of color have been in a recession for nearly five years and have entered a depression during the current economic crisis. Although the black poverty rate fell 8.5% from 1989 to 2000, the black family poverty rate increased 2.8% from 2000 to 2007. Poverty rates for Hispanic families grew .5% from 2000 to 2007. The Hispanic family poverty rate (19.7%) is roughly twice that of the overall poverty rate (9.8%).

This ratio was at a record high of 63.5% in 2000. Once the 2001 recession and weak economic recovery hit, these gains were lost and have yet to be recovered. Austin, Algernon. “What a Recession Means for Black America.” EPI Issue Brief # 241. 18 Jan. 2008.

You say crisis, I say opportunity “ You never want a serious crisis to go to waste" ~ Rahm Emanuel A crisis creates a sense of urgency No one can deny that the system is broken An opportunity to learn what worked and what did not Civil War  Reconstruction Depression  New Deal 2008-2009 Recession  ?

Learning From Our Mistakes? If we fail to pay attention to populations and the resources that communities possess, we are likely to repeat the mistakes of the New Deal. For example, Social Security benefits were initially denied to household and farm laborers – effectively excluding 65% of the Black population at the time How do we avoid the New Deal mistakes? We must be intentional. Policies should be targeted and programs should be structured so that they reach certain populations and communities.

We Need A New Paradigm Targeted policies alone are not desirable because they appear to show favoritism toward a certain group, thus stigmatizing them. Universal policies alone are not truly universal. They fail to account for the fact that people are situated differently in the economic and social landscape “ Universal” policies are often based on a non-universal standard Ex: Social Security: able-bodied white males working outside the home full-time for pay Thus… Targeted Universalism

Group A Group B If people in red receive job training through the universal program, Group B would seemingly benefit more than Group A (more people in red). Universal Program Key: Red = job training Boxes = isolated neighborhood (not addressed by universal program)

Group A Group B Although the universal program affected everyone in red, Group B is still constrained by living in isolated neighborhoods (the boxes). Universal Program Key: Red = job training Boxes = isolated neighborhood

Targeted Universalism This approach supports the needs of the particular while reminding us that we are all part of the same social fabric. Universal, yet captures how people are differently situated Inclusive, yet targets those who are most marginalized Example goal: Every school as a performing school What does each school need to get there? What does each student, family, teacher, community need? What are their strengths and constraints?

Targeted Universalism Targeted Universalism recognizes racial disparities and the importance of eradicating them, while acknowledging their presence within a larger inequitable, institutional framework Targeted universalism is a common framework through which to pursue justice. A model which recognizes our linked fate A model where we all grow together A model where we embrace collective solutions

Ex: Economic Stimulus Package The economic stimulus package fails to directly account for race. Yet, race is a key component of many major economic issues. Ex: Subprime/Foreclosure crisis: People of color are more than three times as likely as whites to have subprime mortgages. Borrowers of color were more than 30 percent more likely to receive a higher-rate loan than white borrowers, even after accounting for differences in risk. Besides considering race-sensitive design, we must be concerned about the impacts. Rogers, Christy. “Subprime Loans, Foreclosure, and the Credit Crisis – A Primer.” Dec. 2008.

Seeing the Connections Attempts to address singular issues in isolated ways will ultimately fail Targeted interventions must recognize the interconnected nature of our structures While many policy areas can appear distinct, we must think of them collectively. Ex: Transportation Is this an urban policy issue? An environmental issue? A jobs/economic issue?

Systems Interventions We need to identify both the problems and the opportunities that exist. A systems perspective would advocate that we focus on design and outputs rather instead of inputs and the process.

Concluding Thoughts The economic stimulus provides an opportunity to grow the economy for all. Foundations can play a vital role in reducing existing disparities. We need to embrace transformative change. Collaborate Invest in learning models Invest in communications models and capacities

Questions or Comments? For More Information, Visit Us Online: www.KirwanInstitute.org

Appendix A Additional Information

Analyzing the Stimulus and Our Values Questions to consider: What are our public values for the next century? Does the stimulus package advance fair investment in all people and communities? Does it promote economic and environmental sustainability? Does it have transparent controls for personal, institutional, and regulatory accountability? Is it sensitive to the needs of racially marginalized groups and communities?

Assessing the Stimulus Package Projections indicate that the stimulus package will not impact all groups to the same degree. People are not only spatially segregated, but segregation also occurs by sector.

Stimulus: Projected Distribution of Jobs by Race

African Americans are underrepresented relative to their presence in the U.S. population (13%). Hispanics/Latinos, also at 13% of the U.S. population, are overrepresented.

These overestimates/underestimates are often industry specific. Consider the construction industry, a key component to the stimulus plan’s infrastructure building: Call out of construction sector jobs by race

http://www.racewire.org/ An alternative analysis: Comparing projected state spending with the racial demographics of each state

Applying Targeted Universalism These “shovel ready” stimulus package jobs “can benefit unemployed people of color and women if specific incentives and enforcement tools are enacted to ensure fair access to these opportunities. All stimulus projects should require local resident hiring goals and create a link to community-based groups as the first line contact for construction jobs. Local hiring requirements are a proven approach to bring jobs to under-represented constituencies in construction trades. These requirements can be applied to permanent jobs as well.” Center for Social Inclusion. “Economic Recovery for Everyone : Racial Equity and Prosperity.” Talking Points.

Systems Theory Focuses on Relationships Systems Theory is a transdisciplinary model that focuses on a web of relationships and processes and not on linear, singular causation or the intent of one or even a few individuals. In a complex systems model, actions and inactions have multiple effects, and the delayed or distant consequences are often different from more proximate effects. Outcomes are caused by many actors’ and institutions’ actions and inactions over time and across domains. Outcomes are the result of causes that accumulate over time and across domains.

System Interactions We must pay attention to how people are situated by looking at multiple indicators and the relationships that exist between those indicators. Source: Barbara Reskin. http://faculty.uwashington.edu/reskin/

Connecting Housing Policy & Education Policy With lower profits and decreased access to capital, fewer corporations are investing in affordable housing (construction or renovation) while homelessness is on the rise. The economic recovery bill passed by the House (1-28-09) “would temporarily allow state housing agencies to exchange some credits for federal grants, which they would then distribute to developers to support the production of affordable rental housing.” This is an opportunity for us to re-think how we target LIHTC projects to high-opportunity areas. Fischer, Will. “Exchange Plan in House Recovery Bill Offers Best Fix for Low-Income Housing Tax Credit.” Center on Budget and Policy Priorities. February 2, 2009.

Connecting Housing Policy & Education Policy LIHTC often concentrates housing units in racially isolated school districts. This exacerbates the educational challenges facing low-income children, particularly children of color.

Economic Recovery Funding and the Future of Federal Policy

More Related Content

What's hot

Viewers also liked

Similar to Economic Recovery Funding and the Future of Federal Policy

More from Kirwan Institute for the Study of Race and Ethnicity

Recently uploaded

Economic Recovery Funding and the Future of Federal Policy