The declining economic fortunes of African Americans under President George W. Bush
(posted by Kay Gee)
By Kathy G.
The list of political and economic disasters that have befallen America on George W. Bush’s watch is extensive and remarkably varied. There’s the Iraq War, Katrina, Abu Ghraib, Guantanamo Bay, the Patriot Act, the illegal surveillance of law-abiding Americans, and, of course, the mortgage crisis and the financial crisis, to name but a few. But there have also been other failures that, while they are not as high-profile as the others I’ve named, are also quite serious and troubling. One of these, which I’ve written about before, is the fact that, during the Bush years, real wages have declined for workers in every educational group except those with professional degrees.
And here’s another that has received little attention: during the period George W. Bush has been president, the economic well-being of African-Americans has significantly declined. As this recent report released by the Economic Policy Institute documents, in the period between 2000 and 2007, African-Americans’ family income, wages, and employment declined, while unemployment and poverty rates increased. This is in marked contrast to the 1990s, when African-Americans saw record economic gains, with significant increases in wages an employment, and a large drop in the poverty rate.
What’s especially striking is that, although wages for African-Americans and most other U.S. workers have declined during the 2000 to 2007 period, we’ve also had large increases in productivity, as is shown by this graph:
What this basically means is that although output per worker hour is increasing, the gains are not going to workers; instead, they are going to those at the top of the income scale.
The big question, though, is why have the economic fortunes of African-Americans (as well as many other Americans) declined over the past 7 or 8 years? The answers are several. One reason is that the recession that occurred earlier this decade hit African-Americans especially hard, and they never made up for the lost ground. (Indeed, women were another group hit especially hard by that recession, and womens’ employment rates have yet to return to pre-recession levels). The EPI report says that an economy with strong job growth and a tight labor market, such as we saw during the Clinton years, benefits American workers in general, and African-Americans in particular.
This recent Wall Street Journal documents the decline in wages for almost all educational groups, and identifies globalization (including the outsourcing of both blue- and
white-collar jobs) and rising health costs as possible causes for the
decline in wages. One reason workers’ wages aren’t keeping up with
inflation is that health care costs have risen dramatically in recent
years, so employers are shelling out more for health coverage, and less
in wages.
I would add something else. There is strong and compelling evidence that while Democratic presidents improve the economic well-being of every income group, they disproportionately improve the fortunes of those at the bottom. Whereas, Republican presidents disproportionately benefit those at the top, and do very little for those in the lower and middle rungs of the ladder. It’s not entirely clear why this is the case. Here’s a graph that dramatically illustrates this point:
Larry Bartels, a Princeton political scientist, has studied this question (the above graphic is from his recent book). Bartels notes that in previous decades, Democratic macroeconomic policies that promoted full employment probably had something to do with these results, whereas more recently, taxes, transfers, social spending, business regulation, and the minimum wage have probably been more important.
There are many reasons to support Democrats and to hope that on January 20, 2009 the man who will be sworn in as President of the United States will be Barack Obama. But by my lights, the likelihood that, under President Obama, we will see a more equitable distribution of economic gains is one of the most powerful arguments in his favor.
It’s also nice that there’s good reason to believe that the election of the first African-American president would be not just a individual triumph for Obama, but an economic victory for African-Americans as a whole.
(You can visit my personal blog, The G Spot, here).
October 11th, 2008 at 7:52 pm
If Bartels believes that minimum wage is good for the poor, he is in dire need of an education in economics. And promoting full employment is not the same as promoting real productivity growth, i.e. a rise in real wages. It’s an example of the make work bias Caplan documents.
Macroeconomic stuff admittedly can get a complex, just trying to tease out this or that variable as particularly decisive. But here is a rebuttal to Bartels that came after the post you link to:
http://theamericanscene.com/2008/04/10/storks-bring-babies
Apparently, Bartel’s findings depend on whether one accounts for a policy lag of exactly one year, as opposed to two (or three) or none (see the complexity problem alluded to above).
In any case, Bartels seems more concerned with income inequality than income growth. We have different priorities. And in the long term, the trend is clear:
http://www.american.com/archive/2008/july-august-magazine-contents/how-are-we-doing
October 11th, 2008 at 7:59 pm
I’m not convinced. Just as Reaganomics was an extension of policies begun during the Carter administration, so was Clintonomics the culmination of Reaganomics, and so is Dubyaomics the culmination of Clintonomics. It was Clinton’s administration who pushed for virtually all of the policies that have led to the present decline, most notably abominations like NAFTA. Bush has simply picked up where Clinton left off, that’s all. An Obama regime will be more of the same:
http://www.takimag.com/site/article/establishment_messiah/
Obama is a ruling class stooge pretending to be a nominal populist. Presidents are figureheads whose role is to “preside” over the execution of policies previously decided upon by the consensus of the elites. That consensus basically amounts to converting the US economy to a standard Third World model of opulent oligarchs and impoverished peons.
October 11th, 2008 at 8:32 pm
One reason is that the recession that occurred earlier this decade hit African-Americans especially hard, and they never made up for the lost ground. (Indeed, women were another group hit especially hard by that recession, and womens’ employment rates have yet to return to pre-recession levels)
This is the cliche right?
Anyway, if recession at the beginning of the decade is one of the principle causes of the problem, and per wikipedia:
The U.S. economy shrank in three non-consecutive quarters in the early 2000s (the third quarter of 2000, the first quarter of 2001, and the third quarter of 2001). how is it George Bush’s fault again? Since he wasn’t prez in 2000, and only took over 20 days into the middle quarter of the contraction. Which, as everybody may remember, was a little behind the power curve due to a shortened transition period.
And why doesn’t he get any love for raising black wages from 2002-2004?
Look, the stuff *right now* is a lot of his fault, with portions of blame that can be distributed far and wide. As will the impact. But to go again to the well that ‘George Bush doesn’t care about black people’ is silly in the extreme.
October 11th, 2008 at 10:06 pm
This web site is dedicated to hosting a dialogue between libertarians and the left, with the goal of encouraging theoretical synthesis and practical cooperation between the best elements of both perspectives.
If this is the case, why is no one protesting the presence of Kieth Preston, a ‘national anarchist’ who valorises violence and openly collaborates with racists and fascists? Anyone who has any doubt as to the truth of this claim need merely spend a few hours browsing his attackthesystem.com website.
Surely anyone who takes *either* the ideals of social justice *or* the ideals of individualism seriously should be horrified by this!?
October 11th, 2008 at 10:16 pm
Anon,
Keith hasn’t threatened anybody here nor contributed worthless commentary.
October 12th, 2008 at 12:10 am
There are a couple of “definite maybes” here:-
- Kathy G.’s “What this basically means is that although output per worker hour is increasing, the gains are not going to workers…”. Actually, it is consistent with gains going to workers, but that is the wrong measure. What counts is gains going to groups tracked over time. You can easily get productivity increases accompanied by downsizing, with “workers” changing over time in such a way that that group is better off per head but other people fall out of that group and don’t get counted (”survivor bias”). If you make gains to workers your test, someone else may come back at you showing that they did get better off - but that’s not the true test, so don’t offer it to them.
- Dain’s “If Bartels believes that minimum wage is good for the poor, he is in dire need of an education in economics”. Actually, that very much depends on how they are implemented and on where the economy is in terms of natural or artificial bias towards or against unemployment. In Australia in the ’50s, for instance, protectionism had created an artificial demand for local labour; minimum wage regulations would have done no additional harm (and actually been unnecessary). As things were, payroll taxes were applied and did not drag employment down in the circumstances and at the levels then obtaining. None of this applies to today’s US and global economy, but even so you only harm the economy and individual workers if you impose minimum wages by fiat, with regulations. You can actually implement them with Professor Kim Swales’s scheme, using tax breaks in a way that not only brings about minimum wages but also promotes employment and even boosts the wider economy (if the levels are not set too high; short of Malthusian constraints this is always possible).
October 12th, 2008 at 10:30 am
Anonymous,
I’m not going to turn this thread into a shouting match between leftoids and national-anarchists, but I did post a response to your comments on the ATS blog:
http://attackthesystem.com/2008/10/reply-to-a-horrified-leftist/
Check it out if you wish.
October 12th, 2008 at 10:49 am
To be fair, Buckley modified his views on race considerably as he got older. Also, he was one of the most prominent and outspoken critics of the War on Drugs, which has been the single most damaging policy to American blacks of the last 35-40 years.
Always ahead of his time, Rothbard supported black nationalism and separatism, and praised it for its decentralist self-determinationist characteristics, and criticized the liberal-statist coercive-integrationist of MLK. In fact, it appears that King himself was moving towards something comparable to Rothbard’s position shortly before his death:
http://chronicle.augusta.com/stories/032308/met_191994.shtml
October 12th, 2008 at 12:53 pm
P.M.,
Thanks for the clarification. I had a hunch what I said wouldn’t go unqualified. If the minimum wage is set below what 99% of workers would garner in freely contracted wages anyway, it’s really moot. Or if inflation is rampant, etc.
October 12th, 2008 at 2:33 pm
“There are many reasons to support Democrats and to hope that on January 20, 2009 the man who will be sworn in as President of the United States will be Barack Obama. But by my lights, the likelihood that, under President Obama, we will see a more equitable distribution of economic gains is one of the most powerful arguments in his favor.”
You are deluded once again and you need to take a stats course. Correlation is not causation and you completely ignore the possibility of carryover effects.
There will not be true equity in distribution until there ins’t some in the office of the President who believes in corporate state capitalism. And until we stop measuring the success of our society in dollars of growth and how many wasy we can shore that system up with countermeasures that still play by the rules, we aren’t going anywhere meaningful.
October 12th, 2008 at 6:17 pm
Keith hasn’t threatened anyone or contributed worthless commentary. And another thing he hasn’t done is post anonymous accusations. It’s nice to be able to check on the track record–even under a consistent nom de net–of someone who’s pointing a finger at others.
And in any case, I don’t think he has any special affinity for racist views. He simply sees the threat of centralized state capitalist Empire as bad enough to justify an extremely broad alliance of secessionist movements.
October 12th, 2008 at 7:27 pm
Kevin’s summary of my views is correct. I prefer to evaluate people on an individual basis rather than on the basis of group characteristics or group identity. Incidentally, this would include groups like soldiers or police as well as races or members of religious denominations. What does a specific individual actually say and do?
As for racial politics, I think the best kind of system is a meritocracy where individuals can succeed or fail by their own efforts. I mean, think of how foolish it would be to reject a cure for cancer just because a scientist of another race invented it?
In terms of group dynamics, I suspect any realistic effort to dismantle the US empire and federal Leviathan would require some kind of settlement to America’s historic racial/ethnic conflicts. Political decentralization, possibly combined with economic reparations for the creation of independent states for the minority groups would probably be the best alternative to the federal civil rights bureaucracy. Something along these lines:
http://attackthesystem.com/americans-for-self-determination/
Something similar to this was the basic idea of Malcolm X, and apparently King towards the end. It was Rothbard’s position, at least for a time. The CPUSA took this position as recently as the 70s and 80s, not sure about today (like it matters!). Most of the black and American Indian groups that are not part of the Democratic Party apparatus take somewhat similar positions.
October 16th, 2008 at 7:54 am
Well, of course, the statistical miracle of the clinton economy might have something to do the swelling ranks of the prison class being conveniently omitted from such calculations. FWIW…