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Economic Recovery Funding and the Future of Federal Policy

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  • 1. 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
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. 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!
  • 6. G20 Protests in Europe - 2009 Reuters: Toby Melville; Digby Oldridge/PR Eye; Chris Ison/PA
  • 7. 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
  • 8. 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.
  • 9. 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
  • 10. 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
  • 11. 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.
  • 12. 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.
  • 13. 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.
  • 14. The Current Recession: Racially Disparate Effects
  • 15.
    • “ 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
  • 16. 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%).
  • 17. 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.
  • 18. 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  ?
  • 19. 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.
  • 20. 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
  • 21. 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)
  • 22. 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
  • 23. 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?
  • 24. 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
  • 25. 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.
  • 26.
  • 27. 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?
  • 28. Visualizing Systems Theory
  • 29. 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.
  • 30. 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
  • 31. Questions or Comments? For More Information, Visit Us Online: www.KirwanInstitute.org
  • 32. Appendix A Additional Information
  • 33. 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?
  • 34. Money Allocation
  • 35. 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.
  • 36. Stimulus: Projected Distribution of Jobs by Race
  • 37. 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.
  • 38. 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
  • 39. http://www.racewire.org/ An alternative analysis: Comparing projected state spending with the racial demographics of each state
  • 40. 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.
  • 41. 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.
  • 42. 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/
  • 43. 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.
  • 44. 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.