The Economic Crisis: 
How It Impacts African-Americans and Labor 
by Muhammad Ahmad

Lecture delivered at the Economic and Black Labor Forum, the Philadelphia Community Institute for Africana Studies, 22 October 22 2009

http://mrzine.monthlyreview.org/ahmad021109.html

The present Great Recession is the latest and largest crisis of capitalism since the Great Depression of the 1930s. During the Great Depression over half of all African-American men were unemployed. The present Great Recession is much deeper because the finance sector of capitalism has exhausted its debt. The Federal Government is in debt; the states are in debt; most cities are in debt or near debt; and consumers (the working class) are in debt. This crisis, the worst in 90 years, has a greater impact on African-American workers because they are concentrated in the public sector.

When state governments are in debt and the financial bubble bursts, the future of public-sector workers is threatened, a future they have built through the unionization process. It is essential that African-American workers, particularly in the public sector, protect their self-interests and power by transferring their labor power into an economically and politically self-reliant form, by creating a black workers' society.

African-Americas are the majority or near majority of the population in 26 or 27 large cities in America. Between 1910 and 1970 six and a half million African-Americans left the South. Today 58-65% live in urban areas.

What I will concentrate on is not only the crisis, but alternatives to the crisis. In the 1930s unemployment was as high as 25% of the entire population. Today, "[o]fficial U.S. unemployment is over 9% while real unemployment, taking into account all those wanting jobs and part-timers desiring full-time work, is close to twice that."1

It is estimated that 122,000 new jobs need to be created each month in order to come out of the present crisis.2 We should realize that the crisis is great. It is serious and it will not be the last. Economic crises tend to reoccur at times that we cannot predict.

In 1963 James Boggs said that with the increase in automation in the production process, capitalists would be able to produce more goods (commodities) faster and with fewer workers, which intensifies unemployment. Racism in the labor market keeps young African-American males a permanent and marginalized sector of the working class.3 There are not enough workers with buying power to purchase all of the commodities; the stores are full and everyone is in debt. There is a global glut of overproduction and under-consumption creating this crisis and a falling rate of profits.

This is the structural crisis of monopoly finance capital: the latest of three major stages of capitalism.

The first stage was "mercantilism," which began in the 16th century continuing into the 18th century. The second stage, "competitive capitalism," the outgrowth of the industrial revolution, took hold in the late 18th century until the mid 19th century. The third stage is called "monopoly capitalism," which began in the last quarter of the 19th century. It consolidated in the 20th century and became more global in the late 20th century as finance played a larger role in warding off crisis and stagnation through wars, debt, and speculation.

For instance, the dominant U.S. financial firms of 1909, J. P. Morgan, Goldman Sachs, and National City Bank are still at the center of the economy one hundred years later. One notable exception was the failed Lehman Brothers which lasted for 99 years.

The stagnation tendency endemic to the mature, monopolistic economy, it is crucial to understand, is not due to technological stagnation, i.e., any failure at technological innovation and productivity expansion. Productivity continues to advance and technological innovations are introduced.4

In this period from 1974-1975, the U.S. economy and the world economy as a whole entered into a full-fledged structural crisis after a long boom. Thus began decades of deepening stagnation. The finance bubble provided a partial fix for the economy, which resulted in mountains of debt and tremendous growth in financial profits. What also resulted was the increasing dependence of the entire economy on one financial bubble after another, which kept the economy afloat.

Every crisis leads to a brief period of restraint, followed by further excesses. Other external stimuli such as military spending, continue to play a significant role in lifting the economy, but are now secondary in impact to the ballooning of finance.5

Another stimulus to the economy has been the privatization of prisons, a constantly increasing prison-industrial complex and a drug culture/illegal economy that is laundered 24/7 into the legal economy. This has created the "silent" criminalization and genocide of two million African-Americans and has devastated African-American families and communities.

The official unemployment rate for African American men was 15% as of March
2009.

Over a third of young black men, ages 16 to 19 in the labor market are unemployed. In fact a recent report found that 8% of all black men have lost their jobs since November 2007.6

The Center for Economic and Policy Research estimated that African-Americans in manufacturing jobs fell from 23.9% in 1979 to 9.8% in 2007.

African-American men have been affected by the instability in the automotive industry. They earn higher wages than in other industries and make up a fifth of the workforce. Twenty thousand African-American autoworkers were either laid off or took buy-outs from the Big Three in 2008.7 Three million jobs could be lost within the next year -- a result that would grossly affect African-Americans if one or more of the domestic automakers were to fail.

African-American workers suffered from a severe decline in decent employment opportunities and have also faced decreasing rates of unionization related to the shrinking manufacturing industry. The median unionized African-American worker earned about $17.51 per hour from 2004-2007, compared to $12.57 per hour for his non-union counterpart.8 The unionized workers were also more likely to have health insurance and pension plans.

Black men have traditionally held the highest union membership rates of all demographic groups. In 2008, 15.9% of black men were members of unions, the greatest participation of all groups and higher than the national average of 12.4%. However, black union membership has been declining at a faster rate than membership among whites since the 1980s.9

Thus African-Americans are impacted by the military-industrial complex, the prison-industrial complex, and finance capital. C. L. R. James, in his article "Black People in the Urban Areas of the United States," says,

. . . The Black people in the United States are the most socially united group in the country, they all have one unifying characteristic -- they suffer from that historical development which has placed them in the role of second-class citizens. There is no other national group which automatically constitutes one social force with a unified outlook and the capacity to make unified moves in politics and to respond to economic problems.10

Henry Nicholas says, "The only thing we own is our labor power." We should learn to use our labor power to serve ourselves, African-American workers. We should use the unions we are in for the benefit of our people. We should use our spiritual power to develop economically self-reliant projects through our churches and masjids (mosques). Thus unions, churches, and mosques should be our bases of power. If we utilize them for economic self-reliance and unite with progressive allies, we will have a collective financial basis for workers' "people power" wherever we reside.

Dr. James Garrett says we need five ingredients for economic self-reliance:

1. Development of a core group to generate capital formation or accumulation that would develop industrial companies.

2. Utilization of land where we are. Dr. Grace Lee Boggs in her article, "A New Kind of Organizing," talks about community land trusts (CLTs). These are unique forms of common-based property rights where a block of land is removed from the real estate market and owned by a people's board of trustees, possibly a community development corporation. These community land trusts could be investment projects of African-American workers' funds, which can be negotiated with a developer, to grant seed money to undertake a development which includes individual houses, sites for businesses, parks, and community centers, etc. Within this utilization of land where we are is the movement that Dr. Boggs has implemented in Detroit, Michigan: the formation of organic community urban gardens. The Universal Negro Improvement Association (UNIA) in Philadelphia has a Black Farmers Market where the produce of Black farmers is sold. The institution of neighborhood installation of solar paneling in homes, the establishment of health food stores and other co-ops and fish farms, as Dr. Claude Anderson has advocated, is essential. All this develops at least a three-day supply of food in times of crisis. In the area where we live, we should think about water: purification, treatment, and harnessing. Eventually we should turn our community into Green communities; and we should invest in wind energy. During the 1930s, Ella Baker organized Housewives Leagues into collective buying cooperatives where neighbors bought in quantity, cutting down on costs.

3. Consolidation of capital, which can be done through credit unions. There are 43-50 credit unions in Philadelphia.

4. An organization -- every project needs organization.

5. People who are willing to be trained to make the project theirs and willing to accept the awesome responsibility of leadership to take over and continue the organization. They must be willing to sacrifice and be dedicated, sincere, principled and willing to do the work.

Dr. Grace Lee Boggs states that in a new kind of community organizing we need housing groups to assert the right of people to remain in their homes by blockading residences threatened with foreclosures and evictions, forcing banks or lenders to renegotiate loan terms.

Dr. Boggs explains that we can have local production for local needs. We can create health and wellness, public gathering places, youth development, and conviviality.11 We can grow our own food; live healthier lives, (eat to live rather than living to eat as Elijah Muhammad used to say); create enterprises that will sustain the family and the community; create neighborhood programs (mural painting, theater, dance, sports -- Philadelphia has the Black Star Games every summer, sponsored by the Poor and Righteous Nation).

We can create a green economy by bringing together environmentalists, labor unions and the community organizations, to improve the environment. We can practice energy efficiency by biking or taking public transportation, converting power sources to renewable energy, restoring wetlands and riverbanks, and creating high quality jobs in the modern energy economy.

Dr. Boggs goes on to say that we can bridge the gap between the middle and upper classes who have moved to the suburbs by creating regional councils that struggle to reduce inequities by sharing revenues and reallocating investments. She calls for a new kind of governing: a movement much like the civil rights movement, that is grounded on a new concept -- what it means to be a human being. This movement empowers citizens with new concepts of ownership, of democracy, to engage in transformative activities, depending on themselves, rather than elected officials.

Here we must start with the concept of Umoja circles. We can develop a holistic, dialectical, humanist culture and re-education process by creating communiversities that implement the study of progressive African-American labor, world history, and political theory, combined with practice. It is through a revolutionary politicized culture that the ethos of mass organized struggle resistance movement is passed on to the forthcoming generation. C. L. R. James said,

I believe that black people in America must recognize the opportunities which history has placed in their hands, not only to record the advancement of their own situation but in regard to the ideas and activities of oppressed people the world over.12

A people united will never be defeated. We will win! As Salaam Alaikum.


---------------------------------
REFERENCES

1  John Bellamy Foster and Robert W. McChesney, "Monopoly-Finance Capital
and the Paradox of Accumulation," Monthly Review, Volume 61, Number 5,
October 2009, p. 1.

2  John Wojcik, "Needed: 122,000 Jobs Per Month," People's Weekly World,
Volume 24, Number 15, September 12-18, 2009, p. 1.

3  James Boggs, The American Revolution: Pages From A Negro Worker's
Notebook(New York: Monthly Review Press, 2009), p. 46-61.

4  Foster and McChesney, op. cit., p. 9.

5  Ibid, p. 15.

6  Alexandra Cawthorne, "Weathering the Storm: Black Men in the Recession,"
Center for American Progress,p. 2.

7  Jonathan Mahler, "GM, Detroit and the Fall of the Black Middle Class,"
The New York Times, June 28, 2009, p. 3.

8  Cawthorne, op. cit., p. 4.

9  Ibid, p. 4.

10  Anna Grimshaw (ed.), C. L. R. James Reader (Oxford, U.K. and Cambridge,
U.S.A.: Blackwell, 1992), p. 375.

11  Grace Lee Boggs, "A New Kind of Community Organizing," The Michigan
Citizen, July 5-11, 2009, p. A10.

12  Grimshaw, op. cit., p. 377.
Muhammad Ahmad is the author of We Will Return in the Whirlwind: Black
Radical Organizations 1960-1975 and Black Social and Political Thought.
===================================


USA: Black Workers & the Crisis

Written by Zach McCall in the U.S.
Thursday, 11 June 2009

Despite what Obama calls a "glimmer of hope," the economic crisis continues to unfold and reduce living standards everywhere. This is bad enough news for working people in general, but how do things fare for Black Americans. Has Obama been the "change" that so many hoped for?


Despite what Obama calls a "glimmer of hope," the economic crisis continues to unfold and reduce living standards everywhere. Vice-President, Joe Biden, told CNN recently that we can expect to see increased unemployment every month for the rest of the year, and the unemployment rate could be over 10 percent by Christmas (the unemployment rate is currently at 8.5 percent). This is bad enough news for working people in general, but how do things fare for Black Americans. Has Obama been the "change" that so many hoped for?


Obama represents the interests of the capitalist class and therefore cannot offer any genuine solutions to racism, unemployment and poverty. Drawing by Latuff and Caros Amigos. Currently, unemployment stands at 13.3 percent for all African Americans, but is at 15.4 percent for black males. In comparison to these figures, unemployment for Hispanic workers reached 11.4 percent in March (up from 7 percent last year), and unemployment for white workers reached 7.9 percent in March (up from 4.5 percent last year.).


Dedrick Muhammad, senior organizer and research associate at the Institute for Policy Studies notes that black unemployment could eventually reach a rate of 20 percent or more. According to Muhammad, whites have not had the same unemployment rate as blacks currently have since the Great Depression. Unemployment figures are also understatements, given that the figures do not include people working only part time or those who have given up looking for jobs altogether.


In addition to unemployment, African Americans, as a whole, are getting poorer due to developments they have no control over. Home foreclosures are hitting black communities particularly hard, and over the past decade, median family income has also declined.


Capitalism's legacy of racism continues to oppress African Americans in spite of formal equality on paper and Barack Obama's promises of "change." The sincere illusions that many have in Obama, especially those of African-Americans, will be shattered in the coming period. Obama represents the interests of the capitalist class and therefore cannot offer any genuine solutions to racism, unemployment and poverty.


The problems that plague all workers, whether they black or white, Asian or Hispanic, Native American or Arab, etc., are part and parcel of the capitalist system. As one of the most exploited layers in U.S. society, black workers are destined to play a key role in the formation of a mass party of labor and ultimately in the socialist transformation of society.


Source: U.S. Socialist Appeal

========================================

 Tuesday, December 1, 2009

Black Workers' Crisis May Linger After Upturn

By Black Power Staff

High jobless rate raises concerns even as economy heads into recovery.

By Allison Linn

OAKLAND, Calif. - The recession has compounded a decades-long problem for black workers, who began the downturn facing a far higher jobless rate than the general population and have fared worse since.

Now experts are worried that many blacks will remain in crisis even as the economy begins to recover, largely because the recession has eliminated so many working-class jobs in sectors like manufacturing and retail that are likely to come back slowly, if at all.

"Across the board right now the job prospects are slim, but for blacks even more so than average," said Algernon Austin, director of the program on race, ethnicity and the economy at the Economic Policy Institute, a think tank that focuses on issues affecting lower to middle-income workers.

Tariq Mustafa can relate. Mustafa, 30, has been looking for work since March, when he completed a temporary retail job after he was laid off from a hotel position. He estimates he has filed 100 online job applications as well as spending months pounding the pavement and visiting potential employers in person.

He said he occasionally feels that race plays a role in his inability to get a job, especially in this tight job market.

"Sometimes you come in and you ask for an application, and you know they're hiring because it was on the Internet, and they'll say, you know, 'No, we're not hiring,' " he said. "It's just, it's that vibe, just how people treat you."

The numbers illustrate the sheer depth of the problem black workers are facing. For all the gains that black workers have made over the past 20 years, everywhere from corporate boardrooms to the White House, there remains a persistent gap between black and white unemployment rates.

Since the recession began in December 2007, the national unemployment rate has gone from 4.9 percent to 10.2 percent, while the the black unemployment rate has jumped from 8.9 percent to 15.7 percent, according to government figures.

In addition, blacks have been more likely to drop out of the labor force altogether as many have become so discouraged about job prospects that they have stopped looking for work.

The labor force participation rate for blacks has fallen from 63.4 percent of adults in December 2007 to 61.7 percent as of October. The overall labor force participation rate in the same period has fallen from 66 percent to 65.1 percent, the lowest level since 1986.

Black workers also are likely to take longer to find a new job. In 2008 blacks made up 19.3 percent of the total unemployed population but represented 25.4 percent of the people who had been unemployed for six months or longer, according to the National Employment Law Project.

In good times and bad, blacks face harsher employment prospects for many reasons, including a higher likelihood of past incarceration or homelessness, and less access to a network of friends and relatives who might have job leads. Discrimination, while less overt than in years past, still plays a role, experts say.

"The American labor market is less friendly to black workers than to white workers, and it has been for all of U.S. history," Austin said.

'There's only one America' Some researchers who have studied this disparity see opportunity in the nascent economic recovery. They say programs such as the government's massive $787 billion stimulus program offer a fresh chance to think about how to address racial disparities.

In the long run, these researchers argue, addressing longstanding disparities will benefit the overall economy by creating a stronger work force that can more aggressively compete on the global stage.

"There's only one America, ultimately, as far as in the global economy," Austin said. "There's not white America, black America, Hispanic America - there's just one. And it's either we're all succeeding or we're all failing."

Although the odds are tough, many black jobseekers who spoke to msnbc.com said they believe succeeding in the job market is a personal issue.

"I think it falls on the individual person, how much drive they have to want to succeed," said Laron Blackwell, 30, who is looking for a job after completing an 11-week job training program in trade and shipping at The Workforce Collaborative, a nonprofit in Oakland. "I don't really look at race as, like, part of why people don't have the drive."

Mustafa, the former hotel worker, thinks he has an advantage when job-hunting because he has a strong work history and has learned over the years how to make a good first impression.

"Some jobs don't care about your experience sometimes - they just want to know how you look," he said in an interview at the Oakland Career Center, where he was looking for job openings. "You know, they want to see how you present yourself and how you talk."

Still, he does sometimes sense that race plays a role.

He recalls how he once he waited five hours to speak with a manager at a restaurant in an affluent northern California suburb, only to be turned away after many other, non-black applicants had been seen.

"In the black community it's always like, 'Well, if they don't have a job, you definitely ain't getting a job,'" he said.

While overt racism may not be as prevalent as in decades past, subtle matters of perception, as well as structural societal issues, can have a tangible impact on job prospects for black workers, experts say.

For example, most people get jobs because of who they know. That can be a hindrance in a community that suffers higher rates of unemployment and thus fewer connections to potential jobs. The problem is compounded in a recession, when the job market is so tight that even a low-level job might require an inside recommendation.

Rising unemployment also can beget further joblessness because fewer people in the community have job connections or see role models of working family members and friends.

Olis Simmons runs a youth organization, Youth Uprising, in an area of Oakland that once boasted a large number of well-paying manufacturing jobs.

Over the years, many of those manufacturers left, leaving behind a wide swath of poverty, crime and unemployed workers - and fewer paths to adult employment.

"That actually set up a system where young people are disproportionately affected and, as a result, discouraged," Simmons said.

Other, even more subtle issues of race and class may subconsciously affect employers' decision-making. A 2004 study by Harvard researchers found that people in Boston and Chicago with stereotypically "white" names were more likely to get callbacks for job interviews than those with stereotypically "black" names.

Disparity at all education levels Even black workers with a college education face higher rates of joblessness. A recent study by Austin, from EPI, found that the average unemployment rate for college graduates under age 27 in the first nine months of this year was 6.2 percent for whites and 13.3 percent for blacks.

"These are young blacks who went to college, stayed in school, but yet we still see that their unemployment rate is double that of whites," he said.

Roxanne Winston is not surprised by that statistic. Winston, 22, will graduate from UC Berkeley in December with a degree in American studies and a resume that includes a term as student body president.

Even as she begins her post-college job search confident she will land a job, issues of race are very much on her mind.

"I want to present someone that is confident and strong and is college-educated, and I kind of don't want you to notice that I'm African-American, even though that's such a strong part of my identity," she said. "I don't want it to be something that you take into account when you're considering employing me or not."

"It can be a dilemma for a lot of African-Americans because it can sound like I'm not proud to be African-American, I'm not proud to be who I am, but it's just a reality that there is race bias in employment," she said. "It would be nice for that to not be the case, but this is the reality we're living in."

Among jobholders, inequalities also remain, said Steven Pitts, a labor policy specialist at the University of California, Berkeley. His research has shown that black workers are more likely than white workers to hold low-wage jobs or work in less lucrative positions in the same field. In retail alone, Pitts found that 73.3 percent of black workers received low wages, compared with 62.2 percent of white retail workers.

Lower wages and higher unemployment add up to a median income for black households of $34,218, compared with $50,303 for all U.S. households, according to the latest census data.

Experts say the situation is especially dire for blacks who face serious barriers to employment, such as a history of incarceration or homelessness.

Blacks are five times more likely to be in jail than whites, according to the Bureau of Justice Statistics. A 2008 study by the Department of Housing and Urban Development found that nearly 42 percent of sheltered homeless people were black.

In this tight job market some are finding that even a relatively minor offense, or one that was years in the past, can make a person unemployable.

"We've set a trend that's going to still, even in the recovery of our economy … leave out a lot of people," said Joyce Guy, an account specialist at The Workforce Collaborative, whose clients often have a history of incarceration, addiction issues or homelessness.

"Right now, with the economy being the way it is, somebody's going to get left out, and over the years it's been Afro-American people that get left out."

'I'm no longer the same person' 

For Marcus Moore, who has spent 29 of his 48 years behind bars for drug-related crimes and is now homeless, it's a struggle just to get the basic necessities for a job interview, such as appropriate clothing and money for transportation to the potential employer.

He also knows that once he gets there, his must explain his past mistakes.

"My past convicts me, you know, and that (will) be for the rest of my life," Moore said.

Still, Moore, who was job-hunting at the Oakland Career Center on a recent day, said he is confident he will get work. He has past work experience as a supervisor for a thrift store chain and in his late mother's restaurant, he said.

The challenge is to convince employers that he has changed in the decades since he first landed behind bars at age 18.

"I know I no longer think the same and I'm no longer the same person, you know?" he said. "All I need is an opportunity to show a company what I could really do."

For Blackfolk: Depression 1930s/Depression2010