Top Black Economic Stories for the Week of July 27th to August 2nd

We have 76 stories this week related to Black Business or Black Economics. We also have our first editorial, at the bottom, urging a NO vote on California Proposition 22.

Top Stories

  • Does $600 a Week Make People Shirk? The Evidence Is No (Bloomberg)
  • Coronavirus could widen black wealth gap (Washington Post) – Michelle Singletary
  • Business Owners Talk About Triumphs, Challenges As National Black Business Month Begins (CBS Chicago)
  • US Gross Domestic Product (GDP) fell 9.5% in the second quarter (Bureau of Economic Analysis) – The US GDP dropped by 9.5% in the second quarter.
  • Discussion of Residential Segregation (CNN) – Nice, long well sourced article.
  • Meet the 29-Year-Old Woman Running One of the Most Successful Black-Owned Airlines In The World (Essence) – In the Bahamas.
  • California’s Black Winemakers Navigate the Barriers of a Lily-White Industry (Mother Jones) — Can’t publish without a Black wine story.

Jobs / Workers / Unemployment

  • Black Workers at Risk for ‘Last Hired, First Fired (Federal Reserve Bank of Dallas)
  • Governor Raimondo (Rhode Island) announces $45 million, first-of-its-kind workforce development initiative to get people back to work (Operation Hope Press Release) – Using CARES act money, they guarantee a job at the end of training.  Only 7,000 people though.
  • Ivanka Trump’s Find Something New career campaign is more hype than help (Washington Post) – by Michelle Singletary.  We ask ourselves everyday: “Are they really that incompetent?”  And every day they answer back with a resounding “Yes, Yes we are.” Read about the latest example.

Coronavirus / COVID-19

  • COVID-19 Pandemic Hitting Low-Wage Workers Hardest (Urban Milwaukee)
  • US: Covid triggers a boom in debt collection (Verdict / Cards International)
  • State Unemployment Officials Unite Against Wage-Replacement Plan (Bloomberg Law)
  • Black Neighborhoods Miss Out on Stimulus and Fall Further Behind (Bloomberg)
  • Does $600 a Week Make People Shirk? Evidence Is No (Bloomberg)
  • Coronavirus could widen black wealth gap (Washington Post) – Michelle Singletary
  • Coronavirus causes a new gentrification crisis (Washington Post)
  • The pandemic may cause 40 million Americans to lose their homes (CNBC) – Just 26% of African Americans are confident they can continue to pay rent.  Good video on how evictions work.
  • WATCH NBC4 Report: Los Angeles Sentinel Closes Office Due to COVID-19 Diagnosis (LA Sentinel)
  • The Greater Milwaukee Foundation is promising $30 million for an ‘equitable economic recovery’ from coronavirus (Milwaukee Journal Sentinel)
  • Protecting American Consumers in Crisis (Center for American Progress) – The CFPB should be more active during the Covid-19 crisis.
  • Marcio Rubio Stresses the Importance of Capital Access for Minority Small Businesses (Florida Daily)
  • The Coronavirus Pandemic Has Intensified Systemic Economic Racism Against Black Americans (New Yorker) – Good summary of where we are. By Steven Greenhouse, ex-labor reporter for NY Times.  Yes, there used to be reporters that covered labor and worker issues. Ha, ha.
  • What is a phase III drug (vaccine) trial? (FDA) – It a trial with 300 to 3000 diverse volunteers to check if the drug works in a large population, check for side effects and check for long-term issues.

Protest

  • SF Mayor Breed’s Proposed Budget Redirects $120 Million From Police to City’s Black Community (KQED)
  • San Francisco: Roadmap To Guide Transformative Change And Investments In African-American Community (SF Patch)

Black Business

  • Uncle Bobbie’s opened to build community. Now that community is helping it reopen (Philadelphia Tribune) – Someone broke in and robbed Uncle Bobbie’s in Philadelphia. Twice.
  • Business Capital, Knowledge Remains Out Of Reach For Many Minority Entrepreneurs (WBHM – Birmingham Public Radio) – Discusses the general Black business climate and entrepreneurs learning from each other.
  • Organizers expand ‘BlackOut Tuesday’ into a monthly event in Carbondale (Southern Illinoisan)
  • New Black-owned businesses emerging in NC despite COVID-19: Kenan-Flagler expert (WRAL TechWire)
  • Race in America: Diversity in Corporate America (Washington Post) – Long interviews with John Rogers of Ariel Investments. Lots of interesting business details. Rogers seems to be the most prominent Black business leader in the media these days.
  • Philadelphia Based Black-led Private Equity Fund TPP Capital Seeks One Billion for Black Health (BusinessWire PR)
  • California’s Black Winemakers Navigate the Barriers of a Lily-White Industry (Mother Jones)
  • Business Owners Talk About Triumphs, Challenges As National Black Business Month Begins (CBS Chicago)

Hispanic / Latino Business News

  • Recession Led by Services Sector Is Particularly Painful for Latino Workers (Wall Street Journal) – A lot of personal service jobs performed by Latino women are hurt by Covid-19.  Cleaning, restaurants and elective surgery services are way down.

Small Business

  • Small business funding sources amidst the COVID-19 pandemic. (CreditCards.com) Small-business owners are leaning on credit cards to survive (American Banker) – Thirty (30) percent said they received a PPP loan/grant and 24% said they used credit cards or a business savings account.
  • One-Third of New York’s Small Businesses May Be Gone Forever (NY Times)

Big Business

  • Super-sized racism: former McDonald’s execs strike back in explosive race discrimination lawsuit (North Dallas Gazette) – Good detailed piece on a discrimination law suit against McDonald’s filed by two Black women former executives.
  • Good Quote: “For those that did take a strong position, it was, and is, important that it was for the right reasons and not seen as capitalizing on a sensitive issue,” said Katie Harvey, CEO of KGB Texas, a San Antonio firm.
  • Assets no more: Racial justice risks in municipal bonds (Generocity) – This is kind of unique.  They are arguing racialized policing puts municipal bond holders at risk in three way: Over spending on prisons, fines as a revenue source and police misconduct settlements.

California Proposition 22

Please read the news summaries before reading the description and editorial.

  • Proposition 22: Employee classification (Politico)
  • What is proposition 22? (Ballotpedia)
  • What is AB5? (Ballotpedia)
  • Fight for Uber and Lyft Drivers to Remain Their Own Bosses Heats Up as November Vote Approaches (Richmond Pulse)

In September 2019, the California Assembly passed assembly bill AB5 which would classify most independent contractors as employees. 

The classification is based on how “independent” the workers actually are: are their working conditions largely determined by the company, do they control when and where they work, and do they have multiple clients.

Large “gig-worker” companies like Uber, Lyft and Doordash opposed the bill beliving it would hurt profits. They said it would also reduce employment and raise prices for services for consumers.

Proposition 22 would overturn CA Assembly Bill 5. AB5 was passed in September 2019 without an exemption for app-based services like Uber, Lyft and DoorDash.  The big companies have pledged $110 million to pass proposition 22 and stop AB5.

Some Black business and contractors have tried to rally support for Prop. 22.  The California State NAACP and the California Black Chamber of Commerce support the measure.

  • The National Black Chamber of Commerce also endorsed Proposition 22 (NBCC) – The editorial is called “Ridesharing is the Path to Wealth”

The Sacramento Observer, a Black newspaper, published an independent editorial by the President of CA national Action Network supporting Proposition 22.

  • Proposition 22 Protects Independent Contractors (The Sacramento Observer) — The editorial’s author is Dr. Tecoy Porter Sr. who is president of the California State National Action Network.

Sports and Entertainment

Straight Up Econ

  • US Gross Domestic Product (GDP) fell 9.5% in the second quarter (Bureau of Economic Analysis) – The US GDP dropped by 9.5% in the quarter compared to last quarter (Q1/2020) and 9.5% against (Q2/2019). What’s interesting is that Personal Income is up 7%, Transfers from the government are up 75% and Personal Consumption Expenditures are down 10%.  So with all that money coming in and not being spent: Savings is up 200%. 
  • GDP drops by 33% Annualized (CNBC)
  • Powell Says Fed Lacks Tools for Fighting Black Employment Gap (Bloomberg)

Interesting People

  • Meet the 29-Year-Old Woman Running One of the Most Successful Black-Owned Airlines In The World (Essence) – In the Bahamas.
  • 7 African American Designers on How They’re Pushing The Design Industry Forward (Interior Design)

Careers

  • Blacks, Latinos feel unwelcome in STEM careers. And that’s a big problem for our economy. (USA Today)
  • Arts2Work: New program aims to help people of color find media jobs (Philadelphia Tribune)

In passing

  • Herman Cain, Ex-CEO of Godfathers Pizza and Former GOP presidential candidate dies of COVID-19 (AP News)

Inequality / Structural Racism / Positive Action

  • ‘Too little, too late’: Why BET’s founder doesn’t like Joe Biden’s plan to tackle inequality (Yahoo Finance)
  • Want to fight racism? Break out of your school network (Greensboro News and Record) — “Dream Hoarders,” Richard Reeves
  • The Universal Income Grant: An old idea that may have a new impetus in South Africa (Daily Maverick, SA)

Desegregation / Integration / Race / Class

Editor’s Note: We are providing extra coverage of Trump’s Racial appeal to suburbanites. Residential segregation based on race and income is one of fundamental problems in the US. It limits access to jobs, networks, schools, parks and neighborhoods with a higher quality of life. Suburbanites are hoarding opportunity and transferring difficult problems out of their neighborhoods all while paying less proportional taxes.  They are shirking their responsibility for major problems in society by limiting integration and affordable housing in the suburbs.

  • Discussion of Residential Segregation (CNN) – Nice, long well sourced article.
  • Trump in trouble revisits his tried-and-true — protecting your neighborhood from ‘them’ (RollCall)
  • Seeking Suburban Votes, Trump To Repeal Rule Combating Racial Bias In Housing (NPR)
  • What Trump’s Campaign against ‘Abolish the Suburbs’ Was Actually About (Bloomberg CityLab)
  • Trump’s tweets about saving the “Suburban Lifestyle Dream,” explained (Vox)
  • A Brief History of Housing Discrimination in Fullerton and North Orange County (Fullerton Observer) – It would be great if every community research a similar article. It answers the question: “Oh but I didn’t personally benefit”

Real Estate / Gentrification/ Evictions / Urban Planning

  • Chicago develops local grocery store to help a neighborhood (Bloomberg CityLab) – Not sure what they are doing at this location when they have a Whole foods five blocks east in Englewood Square at 63rd and Halsted.
  • Freed Slaves Built Dallas’ 10th Street District. Gentrification Threatens To Tear It Down. (Spectrum Local News – Dallas)
  • ‘The early warning signs are not pretty’: Eviction Lab researchers study end of federal moratorium (Daily Princetonian)
  • Urban planning as a tool of white supremacy – the other lesson from Minneapolis (Minneapolis Post)

Government – Federal / State / Local

  • Lack of aid to states could hit Black and women workers hard (marketplace.org)
  • A Blueprint for Revamping the Minority Business Development Agency (Center for American Progress)
  • City of DeSoto, TX takes aim at increasing minority business opportunities (North Dallas Gazette)
  • St. Louis unveils plan to attract more residents, investments in the city (KSDK – St. Louis) – A heavy lift. Includes closing the wage gap between Black and White residents plus adding 35,000 new people to the city.
  • Proposed Oakland Tax Hike Concerns City’s Office Sector (BisNow) – This is another tough one. Cities need to raise revenue without driving away businesses. Now with Covid-19.

Politics

  • Joe Biden’s plan for economic racial equity (Joe Biden) – We have to use direct quotes because the language is non-specific and word-smithed.  It says “  Collectively, Biden will leverage more than $150 billion in new capital and opportunities for small businesses that have been structurally excluded for generations.”
  • Joe Biden’s Racial Economic Equity Plan Would Invest $150 Billion in Minority Businesses (The Black Chronicle)
  • Biden proposes Fed focus on closing racial wealth gaps (Yahoo Finance)  — Actually, fairly interesting since fed does not have this role now. Plan actually calls for more reporting of activities by race and income. The Fed will also report what they are doing to close gaps in jobs, wages and wealth.
  • Slotkin Secures Funding to Revive Annual Report on Systemic Racism in Michigan (Slotkin.house.gov)

Reparations

  • Exclusive: Bob Johnson lays out his solution for wealth inequality (Axios)
  • As Redress for Slavery, Americans Oppose Cash Reparations (Gallup) – Sixty seven percent oppose direct cash payments.  Democrats are evenly split on reparations.  The issue was so important to Gallup that Mohamad Younis wrote up the survey results.
  • Reparations for slavery: Is Asheville a national model? (ABC News)

Conservative / Alternative

  • Five reasons economic inequality remains all-American (NY Daily News)

History

  • Polling: Most Americans say the legacy of slavery still affects black people in the U.S. today (Pew Research Center) – Sixty Three Percent (63%) of people in the survey believe slavery has impacted Black people in the US.

Education

  • Report finds a drop in Black enrollment at most top public colleges and universities (Hechinger Report)
  • Medical Schools Need to Get Better at Addressing Structural Racism (Scientific American)

Science

  • Racial disparities in innovation (Nesta UK) – Good report on small numbers of Black scientists and inventors.  References Lisa Cooks paper.
  • What is a phase III drug (vaccine) trial? (FDA) – It a trial with 300 to 3000 diverse volunteers to check if the drug works in a large population, check for side effects and check for long-term issues.

Black Economic and Business News Editorial

AB5 is great legislation.  Proposition 22 is raw, naked corporate power.

Black Economic and Business News supports AB5. AB5 is a natural legislative exercise to check corporate power over gig economy workers.  Society has an interested in protecting workers pay, benefits and working conditions.  There needs to be a basic floor of acceptable conditions that define a job and when companies fall below that floor, government must act.

Corporations have long classified some workers are temporary or brought in experts for very specific jobs.  Companies have always rented talent or expertise for things like IT, design, HR or legal.  Then in 1990, Prahalad and Hamel promoted the concept of “Core Competency” and many companies outsourced all non-core activities. Millions of “non-essential” employees lost their jobs.  Worker incomes stagnated. Corporation increased their profits and power. The country has never been the same. 

One consequence of outsourcing was an explosion of part-time, freelance independent contractors called “gig” workers. These workers were employed on an as need basis by companies and were paid piece rates or job rates rather than actual wages. They receive few benefits. They don’t pay or receive unemployment insurance.

But, then along came Uber, Lyft, Doordash, Amazon Delivery, Seamless and Instacart where the business model was based on using huge large numbers of “independent” contractors.  These workers are not really independent because the company controls all of the working conditions. The company decides when and where they work, how they dress, and how they perform the work. The company treats them like employees except when it comes to wages, benefits and taxes.  

During the creation of AB5,   The App-based companies ask for special treatment under the original bill but were unable to come to agreement.  During the negotiations, they threaten to fund proposition to over turn the law so they could force the legislature to back down.  When they could not reach agreement, they put Proposition 22 on the ballot and pledged $110 million to support it.

These same companies have a long record of high fees, low wages and abusive employment practices.  Their Prop. 22 ad campaign uses many of same people (hostages) they have treated poorly in the past. It also threatens job losses like a union busting campaign. What they are really afraid of is CA AB5 setting the standard for the rest of the United States. Treating workers better would affect their profits.

Some argue that AB5 will reduce contractor unemployment or lead to higher consumer prices.  Both effects exist but are tiny compared to the benefits the workers will receive. The employment effects are close to zero: nobody’s meal or package is going to go undelivered. The consumer price effects would be in pennies. But the upside is, AB5 also gives workers higher pay, more benefits, collects unemployment taxes and supports possible future unionization of the workforce.

Companies have used phony “independent contractors” to cheat workers of wages and benefits and the society out of taxes for too long.  In September 2019, the large scale abuse of that classification caused the California Assembly to act.

We cannot support companies whose fundamental business model is to pay employees below minimum wage with no benefits and then skip out on taxes.  The business model leaves the rest of us pay more in taxes and social benefits to help our fellow citizens.

So, for all of the above reasons, The Black Economic and Business News, supports a NO vote on California proposition 22.

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