Showing posts with label black unemployment. Show all posts
Showing posts with label black unemployment. Show all posts

Thursday, May 14, 2020

Black People and COVID-19: Key Impacts.

Black People and COVID-19 | Key Impacts

A new national survey of African American small businesses was conducted by Washington, D.C.-based Creative Investment Research. The survey asked questions about the Paycheck Protection Program and the Economic Injury Disaster Loan Emergency Advance (EIDL) Programs. The survey was intended to get a true pulse of how effective the lending programs have been. Sixty four percent (64%) of survey participants that said they applied for the Paycheck Protection Program (PPP), only 19% got funding. Even those receiving funding, however, got far less than what they asked for or expected. As survey respondents were predominantly Black businesses, this gives us some insight as to why unemployment is high and growing among Black Americans.

What can Black people do immediately?
  • Apply for the stimulus check of $1,200 - 100% probability rate of receiving;
  • Apply for Paycheck Protection Program (PPP) - much lower probability rate of receiving PPP, only about 19% received funding per survey results. Services to help you apply:
    1. Lendio - committed to trying to get capital to black, women and minority companies
    2. Paypal
  • Apply for the Economic Injury Disaster Loan (EIDL)
  • Identify internal resources. Caucusing with your network to ask for money (loan pool). Look to your family for financial support and guidance.
Expected Impacts of COVID-19, ranked from most to least significant:
  • Health (95%). This is because: lack of top-level hospitals in communities of color, gentrification;
  • Employment (85%) - We estimate Black unemployment will hit 50% at peak. This is because Black people are the last hired, first fired. A lot of black Americans work in the service industry, which has been one of the hardest hit by the pandemic;
  • Education (70%) - The best opportunity to fix this issue is through more equitable and creative educational opportunities;
  • Homeownership (50%) - We suggest that the Fed engage with Fannie Mae and Freddie Mac to create mortgage-backed securities (MBS) to help Black homebuyers;
  • Small Businesses (40%) - Lower than expected impact since Black business owners are equipped with better survival skills.

Saturday, May 9, 2020

Fiscal and Monetary Policy Need to be Coordinated Globally


AT almost that three times the level reported in December, 2019, Friday's Black unemployment rate number is surprising and unfortunate, no matter what partisan policymakers and economists say.

Remember, our expectation (and hope) was that fiscal and monetary policy actions would limit the initial damage. The Paycheck Protection and Economic Injury Disaster Loan programs certainly helped keep May's unemployment rate below 20%, but the numbers show that more focused fiscal and monetary policy actions, coordinated on a global level, are needed.

In our comment on the Economic and Social Costs of "Reopening" America, we estimated that U.S. small businesses would need $6 trillion on an annual basis to ensure their survival through the coronavirus crisis. This was confirmed by the head of the Federal Reserve Bank of Atlanta. (See: https://twisri.blogspot.com/2020/04/economic-and-social-costs-of-reopening.html).

Unfortunately the unemployment numbers show that we are just beginning to see the true scale of the damage caused by the virus. As we forecast on December 26, 2016,

" Under any conceivable scenario, the current situation is very bad, and I mean toxic, for democratic institutions in general and for people of color specifically. Bottom line: our Fully Adjusted Return Forecast** indicates that, over time, things will get much, much worse....." 
See: https://www.linkedin.com/pulse/trumpism-william-michael-cunningham-am-mba/  

Saturday, September 2, 2017

HR 3441, the Save Local Business Act and Black Unemployment

Eight years after the Great Recession, many in the country still struggle economically. While we continue to look forward positively with respect to the future, we need economic policy initiatives that promote growth and fuel our entrepreneurial spirit. Technology has allowed many more people to work for themselves and build economic security. This is even truer for the African American community, which has traditionally been locked out of opportunities in corporate America, but for whom, as the chart below shows, is starting to see some modest improvement. Economic independence is one key to our future.
There are many pathways to achieving the American dream. Some of these pathways lead to entrepreneurship and to the use of empowering and flexible business models, such as franchising and the shared economy.

Recent economic policy initiatives may serve to block the door to opportunity. Specifically, federal and state efforts to expand the definition of a “joint employer” beyond the traditional legal definition of “direct and immediate” control may reduce opportunities for the Black franchisor and for Black creatives in the sharing economy. 

Let me explain.

Under the newly expanded definitions, employers who possess “indirect” or “unexercised reserved” control might be considered a “joint employer”.  The uncertainty that business owners feel over this matter might limit the ability of an employer to provide critical support for employees, like worker training and development, apprenticeship programs, corporate social responsibility programs, and guidance on compliance. For instance, if I own a franchise and the corporate entity offers tuition assistance, it could be determined that the corporate office has indirect control over my employees. Additionally, If I have a contract with Google, which requires I offer paid vacation to my employees, those employees might be considered indirect employees of Google. This designation could have any number of confusing and negative consequences, including tax and liability. In the absence of clarity, employers are considering whether to refrain from offering these critical programs altogether.
In what has become a rarity in American politics, a bipartisan effort is underway to clarify this problem.  HR 3441, the Save Local Business Act, is designed to clarify the new standard and allow business owners to have more certainty going forward.


Our economic analysis suggests this law is needed to maintain the progress as evidenced by the chart and to continue to propel the employment gains we have seen in the Black community.

Friday, August 7, 2015

Declining Black/White unemployment differential


Our Fully Adjusted Return (tm) model predicted Black Unemployment would fall from 9.5% in June to 9.1% in July. 

The forecast was confirmed this morning by the US Department of Labor - Bureau of Labor Statistics. 

The difference between Black and White unemployment now stands at 4.5%. We note this is the second lowest differential of the Obama Presidency, surpassed only by a 4.0% differential in February, 2008. Our Fully Adjusted Return model shows that the difference is poised, assuming the Fed does not raise rates, to fall further. See: http://www.bls.gov/news.release/empsit.t02.htm 

Thursday, July 2, 2015

Fully Adjusted Return Forecast Early Yet Again...

On April 2, 2015, we issued an unemployment rate forecast that stated, in part:

"Our Fully Adjusted Return® Model, combining social and financial data, predicts a 5.4% rate for March. Unemployment has been trending down since the beginning of 2009. The long term trend is declining, as the chart below shows. We see no reason for this to change. The only risk is that we may be a little early."

As one outlet noted, "US employers added jobs at a solid pace in June, and the unemployment rate fell to 5.3 percent, a seven-year low." Today's rate release confirms our 4/2/15 forecast.

The chart above shows the overall Unemployment Rate (Blue), the rate for African Americans (Brown) and the difference between the two. (Gray line, scale at right.) We think the level and the volatility of this difference is a key indicator of the overall social and economic health of the country.



GDP

On May 28th, we issued a Fully Adjusted Return® forecast for GDP that, similarly, was a little early. At the time, we stated that: "Our 2015 Fully Adjusted Return® forecast for GDP suggests there will be no change, in other words, we will have a first quarter 2015 GDP estimate that reflects virtually no change, or negative 0.5%." The decline was reported at -0.7% at the time, and most economists expected a rise of +0.2%.

On June 24th, The Wall Street Journal reported "Gross domestic product, the broadest sum of goods and services produced across the economy, contracted at a 0.2% seasonally adjusted annual rate in the first quarter, the Commerce Department said Wednesday. The latest figure matched economists’ forecasts." Contrary to the Journal's implication, most economists missed the turn on May 28th. By June 24th, they caught up.

We were, again, early.

Monday, September 12, 2011

Commentary: Pen stroke could help ease black unemployment

From the Washington Post: http://www.washingtonpost.com/business/capitalbusiness/commentary-new-rule-could-help-ease-black-unemployment/2011/09/07/gIQA8XoqKK_story.html

President Obama unveiled some ambitious ideas last week to create jobs, a plan that may have little chance of becoming reality any time soon given the $447 billion price tag and the current animus between the president and Congress. But about four weeks ago, Obama signed a little-publicized executive order that may go far in addressing a crisis exacerbated by the economic downturn: the rising unemployment rate and the diminishing wealth of African Americans.

On Aug. 18, the White House issued an executive order “to promote the federal workplace as a model of equal opportunity, diversity and inclusion.” This follows on the heels of Section 342 of the Dodd-Frank financial reform law, which created offices to monitor and encourage efforts by federal financial agencies such as the Treasury Department and the Federal Deposit Insurance Corp. as well as banks and contractors to diversify their ranks with minorities and women. Obama’s order is aimed at putting that law on the fast track and extending the requirements to all federal agencies.

Vendors who fail to make a “good faith effort” to hire minorities and women can face termination of their contracts with the government.

This is welcome news for minorities, who have been hit harder than others in the recession.

The unemployment rate for blacks hit 16.7 percent in August, up from 15.9 percent in July. White unemployment actually fell to 8.0 percent in August from 8.1 percent in July.

Moreover, black wealth declined by 53 percent from 2005 to 2009, compared with a decline of 16 percent for whites. Loss of personal wealth more adversely impacts black busi­ness­peo­ple because in general they are more heavily reliant on home equity.

The order will help address the very damaging differential between black and white employment, especially in the federal government where only 6.7 percent of African Americans are in senior pay levels. Monitoring the diversity of employees and contractors working for the federal financial agencies will ensure that hiring practices are fair. Federal contractors will be put on notice that their main client is actively seeking to expand employment opportunities for African Americans and other minorities, prompting them to review their employment practices.

And this may lead to an increase in black employment.

The order will be a boon for black small business vendors who will get more opportunities to sell their goods and services to the federal government. This should further boost black employment, as black firms are more likely to hire black workers.

An added benefit is that it could help spur the establishment of many new minority contracting firms. The new opportunities are especially important now, given that the Standard & Poor’s downgrade of the nation’s credit rating may make private lending more costly and the impending federal cuts may reduce the amount of Small Business Administration funding available to minority busi­ness­peo­ple.

All this should, over time, lead to an increase in black wealth, as these firms become successful.

With this new executive order, the administration has shown that it is committed to doing what it can to address the very serious unemployment situation in the African American community. The Aug. 18 executive order and last Thursday’s jobs speech are attempts by the White House to try, while limited by severe and unreasonable political constraints, to use powers unique to the executive office to help the country.

Tuesday, September 6, 2011

Unemployment in Black and White

We created the chart at left showing black versus white unemployment in August, 2011. Black unemployment was reported at 16.7%, higher than the 16.2% rate reported in August 2010. Black unemployment was 15.5% in July, 2011. White unemployment fell to 8% in August from 8.1% in July, 2011. Further, white unemployment was 8.7% in August, 2010.

I think this puts the recession into clear perspective. While some (the Tea Party in particular) have done a lot of whining, they are in no way, shape or form bearing the brunt of this recession.