Economic Recovery Funding and Economic Recovery Funding and the Future of Federal Policythe Future of Federal Policy

john a. powelljohn a. powell

Director, Kirwan Institute for the Study of Race and EthnicityDirector, Kirwan Institute for the Study of Race and EthnicityWilliams Chair in Civil Rights & Civil Liberties, Moritz College of LawWilliams Chair in Civil Rights & Civil Liberties, Moritz College of Law

ABFE Annual Meeting at the Council on FoundationsABFE Annual Meeting at the Council on FoundationsMay 3, 2009May 3, 2009Atlanta, GAAtlanta, GA

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Presentation OverviewPresentation Overview

The role of foundationsThe role of foundations Promoting a just economic recoveryPromoting a just economic recovery Race-sensitive policy analysis of the stimulusRace-sensitive policy analysis of the stimulus

The current recession & racially disparate effectsThe current recession & racially disparate effects Is the response addressing an uneven landscape of Is the response addressing an uneven landscape of

opportunity?opportunity? Applying targeted universalism & systems thinkingApplying targeted universalism & systems thinking

Ways to Produce ChangeWays to Produce Change

How do foundations think about ways in which you can make How do foundations think about ways in which you can make change?change?

3 options:3 options:

1) Do what’s “fair” - a lot of people receive a little help1) Do what’s “fair” - a lot of people receive a little help

2) Triage – help those who are in the worst situation2) Triage – help those who are in the worst situation

3) Transformative – figure out what went wrong in 3) Transformative – figure out what went wrong in order to correct itorder to correct it

Transformative ChangeTransformative Change

What can foundations do to produce transformative change?What can foundations do to produce transformative change?

Collaborate and focus your effortsCollaborate and focus your efforts

• Allocate your money strategically – a little bit in a lot of Allocate your money strategically – a little bit in a lot of places is not as effective as focused efforts that can later places is not as effective as focused efforts that can later be replicated elsewherebe replicated elsewhere

Invest in learning modelsInvest in learning models

Invest in communications models and capacitiesInvest in communications models and capacities

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Toward a Just Economic RecoveryToward a Just Economic Recovery

Reflect on the intersection of need and opportunityReflect on the intersection of need and opportunity Some communities and people have greater needs (i.e., Some communities and people have greater needs (i.e.,

communities suffering from high foreclosure rates)communities suffering from high foreclosure rates)

Focus on strategic interventions / turning pointsFocus on strategic interventions / turning points ““Will this make the water turn into steam?”Will this make the water turn into steam?”

Embrace advocacyEmbrace advocacy We should be proactive rather than passive!We should be proactive rather than passive! This is our government, our money, and our This is our government, our money, and our opportunity!opportunity!

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G20 Protests in Europe - 2009G20 Protests in Europe - 2009

Reuters: Toby Melville; Digby Oldridge/PR Eye; Chris Ison/PA

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Toward a Just Economic Toward a Just Economic RecoveryRecovery

What are these billions of dollars actually fixing?What are these billions of dollars actually fixing? Are we only fixing the ‘status quo’?Are we only fixing the ‘status quo’? Are we transformative yet?Are we transformative yet? Are opportunity gaps shrinking?Are opportunity gaps shrinking?

Mind the gap & fix the gap:Mind the gap & fix the gap: Reduce the existing disparities between communities of Reduce the existing disparities between communities of

color both in terms of people and places while growing the color both in terms of people and places while growing the economy for alleconomy for all

This requires:This requires:■■ Baseline Baseline ■■ Monitoring Monitoring ■■ Strategy Strategy

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Tracking the Funds: Job Creation through Tracking the Funds: Job Creation through Transit Investment by Gender & RaceTransit Investment by Gender & Race

Bivens, Josh, John Irons, and Ethan Pollack. “Transportation Investments and the Labor Market.” EPI Issue Brief #252, 7 Apr. 2009.

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Opportunities for PhilanthropyOpportunities for Philanthropy

Short term:Short term: Draw on your experience and researchDraw on your experience and research

• Present a clear, informed perspective regarding Present a clear, informed perspective regarding communities of color that have been devastated by the communities of color that have been devastated by the economic recessioneconomic recession

Foundations need to Foundations need to proactivelyproactively shape and direct the flow of shape and direct the flow of money.money.

• Intervene in the public dialogue:Intervene in the public dialogue: Targeting the flow of stimulus money dispersed to statesTargeting the flow of stimulus money dispersed to states Connecting education and housing policy through the Connecting education and housing policy through the

targeted use of LIHTC fundstargeted use of LIHTC funds

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Opportunities for PhilanthropyOpportunities for Philanthropy

Long termLong term:: Employ strategic communications regarding raceEmploy strategic communications regarding race

• Help push national dialogue to overcome the common binary of Help push national dialogue to overcome the common binary of (1) we’re in a post-racial world where race ‘doesn’t matter’; (2) (1) we’re in a post-racial world where race ‘doesn’t matter’; (2) we’re stuck in the past where race is ‘everything’we’re stuck in the past where race is ‘everything’

• Emphasize productive discussions around race that thoughtfully Emphasize productive discussions around race that thoughtfully inform policy design and advocacyinform policy design and advocacy

Capacity buildingCapacity building• Increase the participation of marginalized groups in policy designIncrease the participation of marginalized groups in policy design• Improve data collection, monitoring, and evaluation of state and Improve data collection, monitoring, and evaluation of state and

federal programsfederal programs

Legal advocacyLegal advocacy

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Racially Sensitive PoliciesRacially Sensitive Policies

What do racially sensitive policies look like?What do racially sensitive policies look like?

TargetedTargeted: They recognize the nature of our interconnected : They recognize the nature of our interconnected structures / larger inequitable, institutional framework.structures / larger inequitable, institutional framework.

Pay attention to situatednessPay attention to situatedness: They account for the fact that : They account for the fact that people are situated differently in the economic and social people are situated differently in the economic and social landscape of society.landscape of society.

Driven by outcomesDriven by outcomes: It may seem great if unemployment is cut : It may seem great if unemployment is cut in half, but if all the jobs go to white males, serious problems in half, but if all the jobs go to white males, serious problems remain.remain.

Include people of color in the processInclude people of color in the process: Their input is vital.: Their input is vital.

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Racially Sensitive Policies (con’t)Racially Sensitive Policies (con’t)

What do racially sensitive policies look like?What do racially sensitive policies look like?

TransparentTransparent: - Transparency allows for gauging progress : - Transparency allows for gauging progress and making corrections if necessary.and making corrections if necessary.

Multi-facetedMulti-faceted: Incentivize a systems approach. Reorient : Incentivize a systems approach. Reorient how we think about policy.how we think about policy.

Serve as a bridge to the next economyServe as a bridge to the next economy: These policies : These policies should be the stepping stones for the future.should be the stepping stones for the future.

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Race-Sensitive Policy Analysis of the StimulusRace-Sensitive Policy Analysis of the Stimulus

How do we make the stimulus fair, sustainable, accountable?How do we make the stimulus fair, sustainable, accountable?

Incentives for inclusion of people of colorIncentives for inclusion of people of color

Grants and loans for small and minority-, women-, and Grants and loans for small and minority-, women-, and community-disadvantaged businessescommunity-disadvantaged businesses

Collect data by race and gender to understand impacts of Collect data by race and gender to understand impacts of economic recovery policyeconomic recovery policy

Investment in public transit (prioritize projects Investment in public transit (prioritize projects

that connect people to jobs)that connect people to jobs)

Wiley, Maya. “Economic Recovery for Everyone: Racial Equity and Prosperity,” Center for Social Inclusion, 12/2008.

The Current Recession: The Current Recession: Racially Disparate EffectsRacially Disparate Effects

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““In this economy, people of color benefit the In this economy, people of color benefit the least compared to their white counterparts least compared to their white counterparts during economic booms and suffer during economic booms and suffer disproportionally more during economic disproportionally more during economic downturns. downturns.

As W.E.B. DuBois once said, As W.E.B. DuBois once said,

To be a poor man is hard, but to be a poor race To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of in a land of dollars is the very bottom of hardships.”hardships.”

http://www.arc.org/images/fr08/compact/ARC_compact_economy.pdf

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The Current RecessionThe Current Recession

The current recession has affected everyone – but not all to the The current recession has affected everyone – but not all to the same degree.same degree.

Although the U.S. has been in a recession for more than a year, Although the U.S. has been in a recession for more than a year, people of color have been in a recession for nearly people of color have been in a recession for nearly fivefive years and years and have entered a depression during the current economic crisis.have entered a depression during the current economic crisis.

Although the black poverty rate fell 8.5% from 1989 to 2000, the Although the black poverty rate fell 8.5% from 1989 to 2000, the black family poverty rate increased 2.8% from 2000 to 2007.black family poverty rate increased 2.8% from 2000 to 2007.

Poverty rates for Hispanic families grew .5% from 2000 to Poverty rates for Hispanic families grew .5% from 2000 to 2007. The Hispanic family poverty rate (19.7%) is roughly 2007. The Hispanic family poverty rate (19.7%) is roughly twice that of the overall poverty rate (9.8%).twice that of the overall poverty rate (9.8%).

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Black/White Median Income Ratio

60.9%

63.5%

60.2%

58.0%

59.0%

60.0%

61.0%

62.0%

63.0%

64.0%

1995 2000 2005

Year

Med

ian

In

com

e R

atio

This ratio was at a record high of 63.5% in 2000. Once the This ratio was at a record high of 63.5% in 2000. Once the 2001 recession and weak economic recovery hit, these gains 2001 recession and weak economic recovery hit, these gains were lost and have yet to be recovered.were lost and have yet to be recovered.

Austin, Algernon. “What a Recession Means for Black America.” EPI Issue Brief # 241. 18 Jan. 2008.

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You say crisis, I say opportunityYou say crisis, I say opportunity

““You never want a serious crisis to go to waste" ~ Rahm EmanuelYou never want a serious crisis to go to waste" ~ Rahm Emanuel

A crisis creates a sense of urgencyA crisis creates a sense of urgency

No one can deny that the system is brokenNo one can deny that the system is broken

An opportunity to learn what worked and what did notAn opportunity to learn what worked and what did not

Civil War Civil War Reconstruction Reconstruction Depression Depression New Deal New Deal 2008-2009 Recession 2008-2009 Recession ? ?

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Learning From Our Mistakes?Learning From Our Mistakes?

If we fail to pay attention to populations and the resources that If we fail to pay attention to populations and the resources that communities possess, we are likely to repeat the mistakes of communities possess, we are likely to repeat the mistakes of the New Deal.the New Deal. For example, Social Security benefits were initially denied For example, Social Security benefits were initially denied

to household and farm laborers – effectively excluding 65% to household and farm laborers – effectively excluding 65% of the Black population at the timeof the Black population at the time

How do we avoid the New Deal mistakes?How do we avoid the New Deal mistakes? We must be intentional. We must be intentional. Policies should be targeted and programs should be Policies should be targeted and programs should be

structured so that they reach certain populations and structured so that they reach certain populations and communities.communities.

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We Need A New ParadigmWe Need A New Paradigm

Targeted policies alone are not desirable because they appear to Targeted policies alone are not desirable because they appear to show favoritism toward a certain group, thus stigmatizing them.show favoritism toward a certain group, thus stigmatizing them.

Universal policies alone are not truly universal.Universal policies alone are not truly universal. They fail to account for the fact that people are situated They fail to account for the fact that people are situated

differently in the economic and social landscapedifferently in the economic and social landscape ““Universal” policies are often based on a non-universal Universal” policies are often based on a non-universal

standard standard • Ex: Social Security: able-bodied white males working Ex: Social Security: able-bodied white males working

outside the home full-time for payoutside the home full-time for pay

Thus… Thus… Targeted UniversalismTargeted Universalism

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Group A

Group B

If people in red receive job training through the universal If people in red receive job training through the universal program, Group B would seemingly benefit more than Group program, Group B would seemingly benefit more than Group

A (more people in red).A (more people in red).

Universal ProgramKey:Key:RedRed = job training = job training BoxesBoxes = isolated = isolated neighborhood (not neighborhood (not addressed by addressed by universal program)universal program)

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Group Group AA

Group Group BB

Although the universal program affected everyone in red, Although the universal program affected everyone in red, Group B is still constrained by living in isolated Group B is still constrained by living in isolated

neighborhoods (the boxes).neighborhoods (the boxes).

Universal ProgramKey:Key:RedRed = job training = job training BoxesBoxes = isolated = isolated neighborhoodneighborhood

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Targeted UniversalismTargeted Universalism

This approach supports the needs of the particular while This approach supports the needs of the particular while reminding us that we are all part of the same social fabric.reminding us that we are all part of the same social fabric.

• Universal, yet captures how people are differently situated Universal, yet captures how people are differently situated

• Inclusive, yet targets those who are most marginalizedInclusive, yet targets those who are most marginalized

Example goal: Every school as a performing schoolExample goal: Every school as a performing school

• What does each school need to get there?What does each school need to get there?

• What does each student, family, teacher, community need?What does each student, family, teacher, community need?

• What are their strengths and constraints?What are their strengths and constraints?

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Targeted UniversalismTargeted Universalism

Targeted Universalism recognizes racial disparities and the Targeted Universalism recognizes racial disparities and the importance of eradicating them, while acknowledging their importance of eradicating them, while acknowledging their presence within a larger inequitable, institutional frameworkpresence within a larger inequitable, institutional framework

Targeted universalism is a common framework through which to Targeted universalism is a common framework through which to pursue justice.pursue justice. A model which recognizes our linked fateA model which recognizes our linked fate A model where we all grow togetherA model where we all grow together A model where we embrace collective solutionsA model where we embrace collective solutions

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Ex: Economic Stimulus PackageEx: Economic Stimulus Package

The economic stimulus package fails to directly account for race.The economic stimulus package fails to directly account for race.

Yet, race is a key component of many major economic issues.Yet, race is a key component of many major economic issues. Ex: Subprime/Foreclosure crisis:Ex: Subprime/Foreclosure crisis:

• People of color are more than three times as likely as People of color are more than three times as likely as whites to have subprime mortgages. whites to have subprime mortgages.

• Borrowers of color were more than 30 percent more likely Borrowers of color were more than 30 percent more likely to receive a higher-rate loan than white borrowers, to receive a higher-rate loan than white borrowers, even even after accounting for differences in risk.after accounting for differences in risk.

Besides considering race-sensitive design, Besides considering race-sensitive design, we must be concerned about the impacts. we must be concerned about the impacts.

Rogers, Christy. “Subprime Loans, Foreclosure, and the Credit Crisis – A Primer.” Dec. 2008.

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Seeing the ConnectionsSeeing the Connections Attempts to address singular issues in isolated ways will Attempts to address singular issues in isolated ways will

ultimately failultimately fail

Targeted interventions must recognize the interconnected Targeted interventions must recognize the interconnected nature of our structuresnature of our structures

While many policy areas can appear distinct, we must think of While many policy areas can appear distinct, we must think of them collectively.them collectively. Ex: TransportationEx: Transportation

• Is this an urban policy issue?Is this an urban policy issue?• An environmental issue? An environmental issue? • A jobs/economic issue?A jobs/economic issue?

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Visualizing Systems TheoryVisualizing Systems Theory

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Systems InterventionsSystems Interventions

We need to identify both the problems and the We need to identify both the problems and the opportunities that exist.opportunities that exist.

A systems perspective would advocate that we focus A systems perspective would advocate that we focus on design and outputs rather instead of inputs and the on design and outputs rather instead of inputs and the process.process.

Concluding Thoughts

The economic stimulus provides an opportunity to grow the The economic stimulus provides an opportunity to grow the economy for all.economy for all.

Foundations can play a vital role in reducing existing Foundations can play a vital role in reducing existing disparities.disparities.

We need to embrace transformative change.We need to embrace transformative change. CollaborateCollaborate Invest in learning modelsInvest in learning models Invest in communications models and capacitiesInvest in communications models and capacities

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Questions or Comments? Questions or Comments? For More Information, Visit Us Online:For More Information, Visit Us Online:

www.KirwanInstitute.orgwww.KirwanInstitute.org

Appendix AAppendix A

Additional InformationAdditional Information

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Analyzing the Stimulus and Our ValuesAnalyzing the Stimulus and Our Values

Questions to consider:Questions to consider:

What are our public values for the next century? What are our public values for the next century?

Does the stimulus package advance fair investment in all Does the stimulus package advance fair investment in all people and communities?people and communities?

Does it promote economic and environmental sustainability? Does it promote economic and environmental sustainability?

Does it have transparent controls for personal, institutional, Does it have transparent controls for personal, institutional, and regulatory accountability?and regulatory accountability?

Is it sensitive to the needs of racially marginalized groups Is it sensitive to the needs of racially marginalized groups and communities?and communities?

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Money AllocationMoney Allocation

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Assessing the Stimulus PackageAssessing the Stimulus Package

Projections indicate that the stimulus package will not impact Projections indicate that the stimulus package will not impact all groups to the same degree.all groups to the same degree.

People are not only spatially segregated, but segregation also People are not only spatially segregated, but segregation also occurs by sector.occurs by sector.

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Stimulus: Projected Distribution of Jobs by RaceStimulus: Projected Distribution of Jobs by Race

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Projected Percent Share of Stimulus-Created Jobs by Race

White or Other 69.6%

African American

10.1%Hispanic or Latino

15.9%

Asian 4.4%

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

population, are overrepresented.population, are overrepresented.

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These overestimates/underestimates are often industry specific. These overestimates/underestimates are often industry specific. Consider the construction industry, a key component to the stimulus Consider the construction industry, a key component to the stimulus plan’s infrastructure building:plan’s infrastructure building:

Call out of constructionsector jobs by race

3939http://www.racewire.org/

An alternative An alternative analysis: analysis:

Comparing Comparing projected projected

state state spending with spending with

the racial the racial demographics demographics of each stateof each state

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Applying Targeted Universalism Applying Targeted Universalism

These “shovel ready” stimulus package jobs “can benefit These “shovel ready” stimulus package jobs “can benefit unemployed people of color and women if specific incentives and unemployed people of color and women if specific incentives and enforcement tools are enacted to ensure fair access to these enforcement tools are enacted to ensure fair access to these opportunities. opportunities.

All stimulus projects should require local resident hiring goals All stimulus projects should require local resident hiring goals and create a link to community-based groups as the first line and create a link to community-based groups as the first line contact for construction jobs. contact for construction jobs.

• Local hiring requirements are a proven approach to bring Local hiring requirements are a proven approach to bring jobs to under-represented constituencies in construction jobs to under-represented constituencies in construction trades. These requirements can be applied to permanent trades. These requirements can be applied to permanent jobs as well.” jobs as well.”

Center for Social Inclusion. “Economic Recovery for Everyone: Racial Equity and Prosperity.” Talking Points.

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Systems Theory Focuses on RelationshipsSystems Theory Focuses on Relationships

Systems TheorySystems Theory is a transdisciplinary model that focuses on a is a transdisciplinary model that focuses on a web of relationships and processes and not on linear, singular web of relationships and processes and not on linear, singular causation or the intent of one or even a few individuals.causation or the intent of one or even a few individuals.

In a complex systems model, actions and inactions have In a complex systems model, actions and inactions have multiple effects, and the delayed or distant consequences are multiple effects, and the delayed or distant consequences are often different from more proximate effects.often different from more proximate effects.

Outcomes are caused by many actors’ and institutions’ actions Outcomes are caused by many actors’ and institutions’ actions and inactions over time and across domains.and inactions over time and across domains.

Outcomes are the result of causes that accumulate over time Outcomes are the result of causes that accumulate over time and across domains.and across domains.

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We must pay attention to how people are situated by looking at

multiple indicators

and the relationships

that exist between

those indicators.

System InteractionsSystem Interactions

Source: Barbara Reskin. http://faculty.uwashington.edu/reskin/

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Connecting Housing Policy & Education Connecting Housing Policy & Education PolicyPolicy

With lower profits and decreased access to capital, fewer With lower profits and decreased access to capital, fewer corporations are investing in affordable housing (construction or corporations are investing in affordable housing (construction or renovation) while homelessness is on the rise.renovation) while homelessness is on the rise.

The economic recovery bill passed by the House (1-28-09) “would The economic recovery bill passed by the House (1-28-09) “would temporarily allow state housing agencies to exchange some temporarily allow state housing agencies to exchange some credits for federal grants, which they would then distribute to credits for federal grants, which they would then distribute to developers to support the production of affordable rental developers to support the production of affordable rental housing.”housing.”

This is an opportunity for us to re-think how we target LIHTC This is an opportunity for us to re-think how we target LIHTC projects to high-opportunity areas.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.

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Connecting Housing Policy & Connecting Housing Policy & Education PolicyEducation Policy

LIHTC often LIHTC often concentrates housing concentrates housing units in racially units in racially isolated school isolated school districts.districts.

This exacerbates the This exacerbates the educational educational challenges facing low-challenges facing low-income children, income children, particularly children of particularly children of color.color.