Commentary—

The Economy: Not Improving For The Poor

By Marc H. Morial

The good news is that the stock market is up, overall unemployment is down, and economic analysts and other observers are confidently declaring that the recovery of the economy is significantly under way.

The bad news is that that’s only part of the story. The other part of the story is that the economy is not getting better for people at the lower end of the economic ladder, especially those who are unemployed and those who have low-paying jobs.

They have not recovered from the stiff recession, intensified by the terrorist attack of September 11, that threw millions of low-wage workers (and others, of course) out of work. And many have fallen and are falling through the now-considerable holes in the nation’s once-extensive social safety net. That’s because the federal welfare program no longer offers a temporary refuge, and most states, driven by severe fiscal crises, have cut crucial social service programs.

The nation’s unemployment rate held steady at 5.9 percent in October and November, the last months for which figures are available.

But, typically, it’s racially skewed: The unemployment rate for whites is 5.2 percent; for Latinos, 7.4 percent; for African Americans, 10.2 percent. The overall unemployment rate itself is hardly a cause for celebration: It means that 8.7 million people are out of work, 2 million of whom have been jobless for at least six months — the highest such ratio in 20 years.

Furthermore, Congress adjourned last month without extending temporary unemployment benefits to the tens of thousands of jobless workers who are now exhausting their unemployment benefits. By the time Congress meets again in late January, nearly half a million of the jobless will be receiving neither paycheck nor unemployment check.

The economic hardship that remains widespread despite the slowly gathering recovery is nowhere better seen than in the recent report of the US Conference of Mayors on homelessness and hunger in 25 of the nation’s largest cities. Both those ills are increasing among low-income, working families, but the ability of municipal governments to fully cope with this crisis of need is declining.

Overall requests for emergency food assistance rose 17 percent from 2002 — and nearly 40 percent of those seeking food assistance had jobs — while requests for emergency shelter increased by 13 percent.

But more than half the cities reported turning away homeless families from shelters because of too few beds, and turning down requests for emergency food assistance because they had no more supplies.

The mayors’ report underscores that more and more families have been caught in the whirlpool of extreme poverty: families made up 59 percent of those in the survey requesting food assistance, and 33 percent of the homeless who were turned away from city shelters. According to the survey, 41 percent of the homeless are single men, 14 percent are single women, and another 5 percent are unaccompanied youth — but fully 40 percent are families with children.

The survey also pointed out that the homeless population is estimated to be 49 percent African American, 35 percent white, 13 percent Latino, 2 percent Native American, and 1 percent Asian American.

James Garner, mayor of Hempstead, N.Y., and president of the Mayors’ Conference, said the report “underscores the impact the economy has had on everyday Americans,” adding ominously that because of state and municipal budget shortfalls, “We don’t expect it to get any better next year.” That dire expectation, as the Mayors’ Conference fully understands, is intolerable. In addition to efforts being mounted in city after city to provide more resources to handle the crisis, the organization has endorsed a ten-year plan put forward by President Bush to reduce chronic homelessness.

The administration promises to better wield the millions of federal dollars for mental health services, substance abuse prevention, prison release, and job-training programs so that they can be used as part of a coordinated effort to eliminate these key sources of chronic homelessness. That is welcome news. But it cannot be forgotten that now joblessness and low wages are also crucial factors in the crisis of homelessness and hunger, too.

However, there’s a simple way to reduce their impact: jobs that pay decent wages.

(Marc H. Morial is president and CEO of the National Urban League and a former mayor of New Orleans.)