Sizing Up Obama's Efforts To Address Black Unemployment
Policies under Obama seek to improve opportunities
The largest albatross to President Obama’s legacy is the jobs crisis. It’s not a problem Obama created, yet it lingers around his Administration like the scent of a co-worker’s perfume on a husband suspected of having a mistress – it’s not enough to establish guilt, but enough for questioning.
Some have fully indicted Obama as being the culprit behind massive job loss, though much of it is inertia from the Bush Administration. In this week’s New York Times Magazine, Hard Left activist Cornel West said, “Poor people and working people have not been a fundamental focus of the Obama administration. That for me is not just a disappointment but a kind of betrayal.”
Not everyone who’s black in America shares this thought. Said Deborah Goldring, an out-of-work African American, in USA Today recently, "The unemployment situation is not the best, but I don't think it has a lot to do with [Obama]. Fixing this economy, it's going to take time."
What exactly is the Obama Administration doing about it in the meantime? The Loop 21 spoke with Michael Blake, the White House’s Deputy Associate Director of the White House Office of Public Engagement, to discuss policies put in place by the Obama Administration that have improved or will improve employment opportunities for African Americans:
- Federal contracts for small businesses – Small businesses have generated close to two-thirds of the new jobs created over the past 15 years, and they employ over half of all private sector employees, according to the Small Business Administration (SBA). These are also the businesses where African-American owners are best represented, and tend to employ many African Americans and minorities. So, this is one of the areas most in need of shoring up to create employment opportunities for black workers. Every year the federal government has a goal of shelling [pdf] out 23% of its contracts to small businesses, and 5% to disadvantaged businesses. For 2010, they gave small businesses 22.66% of federal contracts -- $97.9 billion worth – the closest to the 23% goal since 2006. For disadvantaged businesses, 7.95% of contracts ($34.3 billion) were awarded – well over the 5% goal. In 2009, $96.8 billion was doled out to small businesses for 21.89% of federal contracts, while 7.5% went to disadvantaged businesses. So, there has been measurable progress. Also, the SBA has created a new advisory council on underserved communities chaired by Catherine L. Hughes, founder of Radio One, Inc. According to Blake, the SBA is committing $1 billion for companies located in underserved communities. Called the IMPACT fund, it will involve investing in economically distressed areas as well as those companies in emerging sectors such as clean energy.
- Lending to small businesses – With all of the panic around the Treasury’s ability to cover its bills, due to debt ceiling wrestling, you might assume it is in no position to do financing. However, Treasury has two programs aimed at lending to small businesses and in some instances making sure capital makes its way to underserved communities: the Small Business Lending Fund (SBLF) and the State Small Business Credit Initiative (SSBCI). Both were started under the Obama Administration as part of the Small Business Jobs Act of 2010. The SBLF is a $30 billion fund that community banks can draw from to lend to companies and spur local employment. The SSBCI is a $1.5 billion fund for states – who could use a lot of help these days – to help finance small businesses. Both are new programs, so a few years are needed before the efficacy of these programs can be assessed. Given the recession, the hole is deep for community banks and states, and Treasury is in no shape to give out the true amount needed to make a major dent in the jobs crisis. It will take major investments from the private sector to show significant progress in hiring.
- Counseling for minority businesses -- $7.2 billion have been awarded to minority businesses over the past two-and-a-half years -- half of that amount to black-owned companies, according to Blake. But for sustainability, counseling is needed. Under Obama’s watch, the Minority Business Development Agency has ramped up the amount of funding and contracts deployed to minority businesses: In fiscal year 2009, the MBDA secured over $400 million in contracts for African-American businesses, while in 2010, that figure went up to $949 million. The numbers of jobs created by MBDA business centers appear low – 5,845 jobs created by MBDA centers in 2010 – but again, it’s the private sector that must supplement financing to make businesses thrive.
There are other programs under the Obama Administration providing opportunities for better access to employment, such as the Community Development Financial Institutions Fund, which similar to the SBLF, grants money to community lending entities so that they can aid small business economic growth, but specifically in rural and low-income communities. Just yesterday, they announced $142 million for economically distressed communities.
There’s also the website www.careeronestop.org, where people can go to find out about who’s hiring and where the jobs best suited for them are located. The Obama Administration is also promoting urban entrepreneurship through a series of workshops they are holding in cities like New Orleans and Atlanta to assist business owners, and those aspiring to start businesses, in learning about the contracting, capital-raising and counseling services available from the federal government.
These are clear examples of work the Obama Administration is doing to address unemployment in black communities. Government can’t do it alone, though, and major finance and lending institutions will have to pull their weight to ensure more black communities and beyond are able to find sustainable employment.