By Michael Grant
As President Obama moves to implement policies that his administration says will reduce smog levels, he is facing a backlash in the urban and largely Black communities that are at the core of his political base and key to the Democratic Party’s success in next year’s elections.
In recent weeks, politicians, business representatives and other leaders in urban and racial minority communities have been warning that new air standards that government regulators are attempting to put in place may have negative economic consequences for local economies from New York City to St. Louis, Chicago, Denver and across North Carolina.
N. C. State Rep. Rosa Gill, a Democratic member of the N. C. Legislative Black Caucus, recently wrote to the White House warning the new standards would undermine the success the President has had in creating an environment that has fostered job growth in areas on the economic margins.
“The minority and disadvantaged population in my district is especially grateful for President Obama’s tireless efforts on their behalf,” she wrote. “So you’ll understand why I’m concerned that the newly proposed air quality standards would act as a drag on the long awaited recovery my constituents are now enjoying.”
The concern is being raised on the eve of the U.S. Conference of Mayors 83rd Annual Meeting in San Francisco, where President Obama is scheduled to speak this week. The debate centers on new ozone – or smog – standards that the Environmental Protection Agency (EPA) plans to put in place in October. It requires states, counties and other localities to hold ground-level ozone to 65-70 parts per billion – or risk losing federal highway money. The current standard is 75 parts per billion of ground-level ozone in the atmosphere.
Ground-level ozone is sometimes called smog, and it has declined by nearly 20 percent in the past 15 years as a result of efforts by industry and government. It forms when emissions from industrial or construction activity, as well as from forest fires or decaying plants, mix with heat and sunlight.
There are a number of concerns that critics raise about the new standards. They include the fact that the EPA has limited ways to measure whether or not a municipality or other locality is in compliance with the standards.
Indeed, only 675 of the nation’s 3,000 counties have ozone monitors in place. As a result, the EPA would rely on computer models to determine ozone levels in a given area – an approach critics call highly imprecise given the financial stakes involved.
More alarming to critics is the negative impact the new standards may have on businesses and job growth. By its own reckoning, EPA says it could cost businesses up to $15 billion a year. But, business groups say the figure is much higher.
For example, earlier this year the National Association of Manufacturers issued a study that concluded the new standard would drain U.S. GDP of $140 billion a year – or $1.7 trillion – from 2017 to 2040. It would also mean 1.4 million fewer jobs, according to the report.
The impact will be especially hard in urban areas that already have the most difficulty meeting the current standard, including Philadelphia, Camden, N.J., Atlanta, Chicago and St. Louis – all with sizable Black populations. In many cases, the communities hardest hit by the standards have lagged behind the rest of the country in rebounding from the economic downturn.
“As a business owner, I know how these regulations will adversely impact Minority and Women owned businesses,” Akilah Graham, a member of the Colorado Black Chamber of Commerce in Denver, wrote in a recent letter to the White House, adding that the costs of the regulations would be “borne disproportionately by those least able to afford them.”
Some political observers note the bind the situation creates for Democrats as election year approaches, given that many of these communities are heavily Democratic and stand to lose in one of two way: reductions in federal aid if they fail to meet the new standards or a slowdown in economic activity if businesses scale back to offset the financial costs of the new standards.
“The irony for Democrats is that the new standards pushed by Obama’s EPA will have an especially large impact on metropolitan areas,” John Burnett, a financial analyst and Republican activist from Harlem, recently wrote in a column for the U.S. News. “In short, these regulations don’t even make political sense, particularly in an election cycle.”
Brandeis U study says policies and practices – not personal behavior – drive disparities
by Charlene Crowell
As long as most of us can remember, Black communities have taught and believed that a college education is the key to social and economic advancement. But according to a new research and policy brief by Brandeis University scholars, that long-held belief is only one of several factors affecting Black America’s ability to build wealth.
After Brandeis University’s Institute on Assets and Policies traced 1,700 working Americans households over 25 years, the researchers found that the wealth gap between white and black families nearly tripled, increasing from $85,000 in 1984 to $236,500 in 2009. For each dollar in income increase during these years, white wealth grew $5.19 while black wealth growth amounted to 69 cents.
Commenting on these findings, Brandeis’ Institute on Assets and Social Policy (IASP) stated, “Our analysis found little evidence to support common perceptions about what underlies the ability to build wealth, including the notion that personal attributes and behavioral choices are key pieces of the equation. Instead, the evidence points to policy and the configuration of both opportunities and barriers in workplaces, schools, and communities that reinforce deeply entrenched racial dynamics in how wealth is accumulated and that continue to permeate the most important spheres of everyday life.”
IASP ranked the biggest drivers of America’s racial wealth gap:
1. Years of homeownership;
2. Household income;
4. College education and
5. Inheritance/other financial support
On average, white families became homeowners eight years earlier than black families. Oftentimes inheritance and other financial support favored families with pre-existing wealth. With more white families able to receive family financial assistance, make larger up-front payments for home purchases, they benefited from lowered interest rates and lending costs. By contrast, black homeowners were more likely to have high-interest, risky mortgages even when income and credit scores were comparable to those of whites. As labor market instability tended to affect blacks more negatively than whites, accrued monetary assets became the vehicle to withstand the lack of income and eliminated many opportunities to invest to build wealth. As a result, black mortgage borrowers became more than twice as likely to lose their homes to foreclosure.
Brandeis also found that for white families, homeownership represents 39 percent of family wealth; but is 53 percent of black wealth. Due to historic differences in access to credit, the homeownership rate for white homeowners is also 28 percent higher than the same rate for black families.
The State of Lending in America and its Impact on U.S. Households (State of Lending, http://rspnsb.li/stateoflending)published earlier by the Center for Responsible Lending cited similar Pew data that found from 2000-2010, black family wealth dropped 53 percent, and Hispanic families lost 66 percent. By comparison, average white household wealth dropped only 16 percent.
According to the IASP report, “The paradox is that even as homeownership has been the main avenue to building wealth for African-Americans, it has also increased the wealth disparity between whites and blacks. . . Wealth in black families tends to be close to what is needed to cover emergency savings while wealth in white families is well beyond the emergency threshold and can be saved or invested more readily.”
So is a college education still a part of building wealth? The answer is still yes. But the rising costs of college and mounting student loan debts together lead to more students – both black and white – leaving school to earn a steady income before graduation. For black college graduates, 80 percent begin their careers with student debt. For white college grads, the corresponding debt is 64 percent.
Reflecting on these findings, Tatjana Meschede, the report’s co-author observed “Public policies play a major role in widening the already massive racial wealth gap, and they must play a role in closing it. We should be investing in prosperity and equity. Instead we are advancing toxic inequality. A U-turn is needed.”