The Economic Recovery and Structural Racialization

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The Economic Recovery and Structural Racialization
60th Annual Conference of the Council on
Foundations. Tuesday, May 5, 2009

• john a. powell
• Director, Kirwan Institute for the Study of Race
  and Ethnicity
• Williams Chair in Civil Rights Civil Liberties,
  Moritz College of Law

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How does race work today?

• There are practices, cultural norms and
  institutional arrangements that help create
  maintain (disparate) racialized outcomes
• We call this structural racialization
• It is a very different way of looking at race
• The way race matters changes over time
  (progress/retreat)
• We must consider how we each stand differently
  with respect to our opportunities for work,
  education, parenting, retirement
• We must understand the work our institutions do,
  not what we wished they would do in order to make
  them more equitable and fair

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THINKING OF RACE AS THE MINERS CANARY

• The Miners Canary metaphor
• Disparities facing communities of color are
  indicators of larger impending societal
  challenges
• Ex Race and predatory lending, which contributed
  to the subprime debacle
• Threatening the entire US economy

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Capital Market Credit crunch
Banks, police and courts saddled with foreclosures
Families lose their homes, wealth and safety
SUBPRIME LENDING We didnt care
about the canary...
Affected neighborhoods are being reduced to
ghost towns
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Reduced spending and retail flight
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Opportunity is racialized

• Structural racialization the joint operation of
  institutions produces racialized outcomes.
• Structures unevenly distribute benefits, burdens,
  and racialized meaning.
• In 1960, African-American families in poverty
  were 3.8 times more likely to be concentrated in
  high-poverty neighborhoods than poor whites.
• In 2000, they were 7.3 times more likely.
• This uneven distribution has negative
  consequences not just for those with the greatest
  need, but all of us.

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Opportunity is spatialized

• Structural racialization involves a series of
  exclusions, often anchored in (and perpetuating)
  spatial segregation.
• Historically marginalized people of color and the
  very poor have been spatially isolated from
  economic, political, educational and
  technological power via reservations, Jim Crow,
  Appalachian mountains, ghettos, barrios, and the
  culture of incarceration.

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Opportunity is complex and cumulative

• Rebecca Blank builds on Myrdals concept of
  cumulative causation.
• In the U.S., while whites are poor in greater
  numbers, people of color are more likely to be in
  prolonged poverty and to suffer the cumulative
  effects (poor health, lack of labor market
  experience, inadequate education)
• Single-issue policies do not adequately address
  the multiple oppressions of poverty

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Opportunity stimulus planning

• How do we make it 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)

Source Maya Wiley, Center for Social Inclusion
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Opportunity foreclosure relief

• How do we make it fair, sustainable, accountable?
• Sustainable credit options for low-income
  families and credit-deprived neighborhoods (fair
  investment in all communities)
• Living-wage jobs and green housing standards
  (economic and environmental sustainability)
• Disciplined, fair and flexible underwriting
  standards a robust retooling of Fannie Mae and
  Freddie Mac and an overhaul of financial
  regulation (accountability)

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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?

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People are differentially situated

• Example controlling for risk factors,
  African Americans were 15-30 more
  likely than whites to get subprime
  loans for purchase and for
  refinance
• Likely refinance targets elderly, often
  widowed, African American women in urban areas
• For Latinos, similar numbers for purchase, but
  not for refinance
• Many Latino homebuyers were recent, first
  generation homebuyers who could not be
  automatically underwritten (multiple income
  earners, cash, local credit, etc.)

Sources Graciela Aponte (National Council of
LaRaza) and Debbie Bocian (Center for Responsible
Lending) presentations at The Economic Policy
Institute panel Race, Ethnicity and the Subprime
Mortgage Crisis on June 12, 2008 in WDC and
Baltimore Finds Subprime Crisis Snags Women in
The New York Times online, Jan. 15, 2008
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Ex Economic Stimulus Package

• The economic stimulus package fails to directly
  account for race.
• 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.
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Racially Sensitive Policies

• We must embrace a systems thinking perspective
  when forming 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.

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Racially Sensitive Policies (cont)

• 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.
• Include people of color in the process Their
  input is vital.
• Serve as a bridge to the next economy These
  policies should be the stepping stones for the
  future.

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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.
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Toward a Just Economic Recovery

• Focus on strategic interventions / turning points
• Will this make the water turn into steam?
• Reflect on the intersection of need and
  opportunity
• Some communities and people have greater needs
  (i.e., communities suffering from high
  foreclosure rates)
• Seek collaborative opportunities
• Allocate your money coherently a little bit in
  a lot of places is not as effective as focused
  efforts that can later be replicated elsewhere
• Embrace advocacy
• This is our government, our money, and our
  opportunity!

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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 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?

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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

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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
• Reflect on what it means to spend money fairly

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Understanding our linked fates

• Racialized structures and policies have created
  the correlation of race and poverty. People
  assume that only people of color are harmed.
• In reality, these effects are far reaching and
  impact everyone we share a linked fate

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Linked FatesTransformative Change

• Our fates are linked, yet our fates have been
  socially constructed as disconnected (especially
  through the categories of class, race, gender,
  etc.).
• We need socially constructed bridges to
  transform our society.
• Conceive of an individual as connected toinstead
  of isolated fromthy neighbor.