Fallout: The Financial Crisis

The recession for African-Americans

Jeremy Hobson Nov 27, 2010
Fallout: The Financial Crisis

The recession for African-Americans

Jeremy Hobson Nov 27, 2010


Tess Vigeland: Unemployment benefits are set to run out again next week, unless Congress votes to extend them. The jobs picture just doesn’t get much better from month-to-month, and it’s especially bad in certain parts of the country, including cities with large African-American populations.

Earlier this year, Marketplace’s Jeremy Hobson spent two weeks traveling across Tennessee and filed this report from Memphis.

Jeremy Hobson :It’s a hot afternoon in Millington, Tenn., a suburb just north of Memphis. About a dozen people are sitting around a table, listening carefully to instructions. They’ve finally found work, helping flood victims for $9 to $15 an hour.

Job orientation speaker: Again these are temporary jobs right now, they’re to last four weeks…

The faces around the table tell the story: The struggle of the Great Recession will continue. But these jobs are four weeks of relief, more relief for some than for others. Here’s a 59-ear-old African-American man named Edward Broadway, who’s been laid off for more than a year.

Edward Broadway: I don’t see it getting better, ’cause we’ve been out of job going on from April 4 of ’09 to now. You know, you go up to a job, try to ask for a job, people will tell you they ain’t hiring or nothing like that. So it ain’t got no better, ’cause right now more people are getting laid off still, closing places down and stuff like that.

Sitting across the table from Edward Broadway is a white woman named Katie Spence. She’s been out of work for months, too, but here’s how she describes her situation.

Katie Spence: It’s a little bit of a struggle, we’ve had to cut back on luxuries, but as far as the actual struggle, I’ve been one of the lucky ones. My husband, he’s been really supportive of me as far as everything. We just bought a new car last year, so we’re having to make payments on that and everything. And we also have a baby and one on the way. It’s a lot all at once, but we’re making it through.

Those two accounts sound different because here in Memphis, there are two recessions going on — one for blacks, who make up more than 60 percent of the population, and one for whites.

University of Memphis Sociologist Phyllis Betts says in this city, low-wage workers are black workers and they are less prepared for lengthy economic downturn.

Phyllis Betts: Certainly, we’ve got a lot of high wage managerial and technical positions that have been downsized, but in those particular cases, better-off families, more likely to have savings. When you’re talking about low wage workers without much of a cushion, they’re going to feel the recession in a different way.

To get a bird’s-eye view of the unemployment picture here, I went to City Hall. Mayor A.C. Wharton peers out the windows of his seventh floor office at the Mississippi River that built this town. Twenty-five years after International Harvester and Firestone closed Memphis operations and laid off thousands, the job situation hasn’t gotten much better.

And Mayor Wharton says the problems run deepest for his African American constituents, the vast majority of which live in low-income households or outright poverty.

A.C. Wharton: The greater number of high school dropouts in the black community, the greater number of unwed teen mothers, the greater number of AIDS cases, the greater number of folks behind bars. Right in this immediate area, with all of our jails and prisons, we have around 11,000 to 12,000 people behind bars — stop to think about that — and probably 95 percent are African American.

He says that high incarceration rate means many looking for jobs don’t bother applying because of their criminal history.

Wharton: We could come in here, and I could say tomorrow, “I’ve got 2,000 jobs, open the door.” A lot of people wouldn’t show up, because they know first of all that they’ve got a criminal record, and at the bottom of the application it’s going to ask “Have you every been convicted of a felony?” They’ve been rejected so many times, why torture themselves by coming up applying? There’s gonna be others who say, “Well, there’s no need for me to go down there; I don’t have transportation, I can’t get there.”

Job orientation speaker: So once these jobs, you’ll be able to access their resources, and hopefully find long-term, more permanent employment.

Back at the job orientation in Millington, James Grandberry proves the mayor’s point.

Hobson: When was the last job that you had?

James Grandberry: 2007, I used to work driving backhoes, doing landscape, different things like that.

How has he been managing for the last three years? Paying the bills?

Grandberry: Well, my wife was working at a motel when my mother-in-law got sick. My mother-in-law draws a little money. That’s how we was managing, you know, like that.

In other words, Social Security checks and unemployment checks are what the Grandberry family has been living on. Those lucky enough to find work here may take a part-time job at Fed Ex, the city’s largest employer. Others take public sector jobs, which have filled the gap since major employers skipped town. That means when there’s a recession and tax receipts fall, there can be a spiraling effect on the local economy. And when there’s a national boom, it’s barely felt here.

The black middle class has been fleeing to the suburbs. And Mayor Wharton says for the city’s black poor, a rising tide doesn’t seem to lift all boats.

Wharton: Some of them, even if you give them the boat, they don’t know how to paddle. Others will punch holes in it. So this idea of just put some more money out there, big grants, and everybody will be lifted up, is not going to be the case.

The mayor pauses, takes a deep breath and looks me right in the eye. He tells me that dealing with this disparity seems overwhelming — but it can be done.

In Memphis, I’m Jeremy Hobson for Marketplace Money.

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