Politics & Policy

How Not to Help

Jobs fair in Chicago, Ill., November 2012 (Scott Olson/Getty Images)
It’s tough to tailor economic policies to help communities such as Ferguson, Mo.

There are problems that are related to race, and there are problems that are related to economics, and it is difficult to untangle them. Ferguson, Mo., is largely black and relatively low-income; View Park-Windsor Hills, Calif., is largely black and relatively high-income. The median household in Ferguson earns $37,517, or 70 percent of the national median: not well off, but not shockingly poor, either. The median family in View Park-Windsor Hills earns about $160,000 a year, or three times the national average. It will be no surprise that black communities in suburban Los Angeles with six-figure median incomes do not suffer from the same sort of problems experienced by poor black communities such as those in the St. Louis exurbs, Chicago, or Detroit.

There are four occasionally overlapping schools of thought regarding poor black communities. The view most prevalent on the hard left is that the root issue is institutional racism, while one prevalent view on the hard right is that the root issue is genetics. I am not much convinced by the evidence for either one of these claims. The third view is that the main problem is cultural, that black Americans, especially in poor and heavily black communities, are taught to understand themselves as being cast in an adversarial role vis-à-vis institutions such as schools and businesses, with the result that they are less likely to take advantage of such opportunities as are available to them for economic advancement. The fourth view, closest to my own, is that the problem is fundamentally one of economics and economic history: Having been formally shut out of much of the economy until within recent memory, African Americans simply lag behind the average. The relatively fast economic advancement of other minority groups, such as Vietnamese immigrants, does not negate that premise: The history and position of black Americans is fundamentally different from that of immigrant groups. American institutions expended a great deal of effort to help assimilate and advance Vietnamese refugees, while many of those institutions had spent a solid century after the Civil War working to prevent the assimilation and advancement of African Americans.

What might a policy response to that look like?

Affirmative action has proven problematic for a number of reasons. One is that it offends many Americans’ sense of justice, the idea that there should be no racial distinction between people under the law. A related problem is that much of the evidence suggests that affirmative action does relatively little to help economically disadvantaged people, that its main beneficiaries are middle- to upper-income members of minority groups and white women. Because our policy debates are dominated by intellectually insulated elites, we spend a great deal of time arguing about things like admissions standards at elite schools, as though the problem facing the typical poor black resident of St. Louis were whether to attend law school at Missouri State or Harvard. Many government agencies have requirements for awarding contracts to minority-owned firms, paying little mind to the fact that people who own companies in the running for government contracts are unlikely to be in a recognizably disadvantaged position.

It should be unobjectionable to maintain that, whatever one thinks about factors such as race and racism, people in Detroit or Ferguson would be better off if they were better off, that higher incomes and more wealth could counteract a great many powerful negative forces. At the very least, it is difficult to imagine how that would leave members of those communities worse off.

But the problem of tailoring economic policies toward such ends is a very difficult one.

Consider the checkered history of the Workforce Investment Act, signed into law by President Bill Clinton, significantly expanded under President Barack Obama’s stimulus program, and recently reauthorized with broad bipartisan support in Congress. The strategy behind WIA could not be simpler: A. Identify unemployed or underemployed people; B. Make a list of jobs likely to be in high demand in the future; C. Match one of Column A with one of Column B, and spend a few billion dollars a year getting them together through training programs.

This works about as well as you would expect. Employees of the federal government have (almost by definition) no competence when it comes to understanding demand for workers in the private sector, and they have effectively zero ability to determine whether an unemployed construction worker in Louisville has any affinity for working as a cardiovascular technician. The New York Times, in a far-reaching examination of the program, found a man in precisely that position, and the net effect of his experience was $20,000 in school loans training him for a job that never materialized and that probably never will. The Times found much evidence that the program leaves its so-called beneficiaries worse off than when they started; the federal government studiously keeps no records of whether those who sign up for the program ever earn a degree or a professional credential — or whether they find jobs as a result of it. If you don’t keep the data, it cannot be used against you.

But when the government decides to spend $3.1 billion a year on some daft enthusiasm, you can be sure that a bucket brigade will show up to take that money off its hands. In this case, institutions ranging from dodgy for-profit vocational programs to local community colleges have been more than happy to take the money and have done precious little to see that some unemployed person benefits from it. Unsurprisingly, default rates on student loans taken out by people in these programs run very high — meaning that “beneficiaries” can add damaged credit to debt and unemployment on their list of financial woes.

When it comes to making moves in the marketplace — for instance, by trying to connect particular unemployed people with particular job opportunities expected to develop in the future — it is a good general rule that the more specific the plan, the worse it will perform. The federal government knows this — that’s why it does not keep records on whether such programs work. Add another layer of specificity — we want to specifically help poor minority communities in areas with histories of concentrated poverty — and the problem becomes that much more difficult. It is notable that one of the most dramatic periods of progress toward closing the black-white income gap happened during the presidency of Ronald Reagan, whose administration did not do a great deal to address black families’ incomes as such — President Reagan’s program was one of general prosperity, which, if we take the economic data of the period as any guide, worked better than much of anything that’s been tried before or since. It is not as though the typical black family suddenly had a Windsor Hills income, but African Americans’ employment and incomes — both individual and business — grew faster than the national average from 1982 to 1988, and black unemployment was cut nearly in half. Programs such as the Workforce Investment Act stem from the fact that politicians always feel the need to “do something,” the more specific the better. No doubt President Obama will have some very specific ideas about how to help communities such as Ferguson.

And no doubt they’ll be the wrong ideas.

— Kevin D. Williamson is roving correspondent for National Review.


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