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Weekly Audit: The hidden casualties of the great recession

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The June labor market report announced that the unemployment rate is down from 9.7 to 9.5 percent and 83,000 private-sector jobs were created in June. Unfortunately, the situation isn’t quite so rosy. As Annie Lowrey reports for The Washington Independent, the real cause of the drop in unemployment was not more jobs, but fewer workers. Hundreds of thousands of unemployed Americans have now been reclassified as “discouraged” workers who have not actively searched for work for four weeks. As such, they are no longer part of the system.

Unemployed and disenfranchised
What’s worse, the unemployment crisis is hurting some more than others. Among the discouraged workers that have simply dropped out of the labor market, 65% are women. People of color have also been hit especially hard, as have young people that are just entering the labor market. As Katherine S. Newman and David Pedulla of The Nation write:

“The Great Recession is reminding us of how unequal the distribution of damage can be. While virtually everyone other than the top 1 percent is suffering in some fashion, the depth of the fallout varies a great deal by race, education and gender.”

The economic disparities are stark. The unemployment rate for African Americans is nearly twice the rate for whites, while the rate among people 16 to 24 years old is nearly double the rate for all workers. And the disadvantages for these particular groups are expected to persist. According to The Nation:

“Young black men are the most disadvantaged of all in the job tournament, but young workers across the board are in terrible shape in this labor market. If previous recessions are an indication of what’s to come, we can expect these stumbling entries into the world of work to translate into long-term disadvantages, relative to those who come of age in a climate of opportunity.”

Foreclosed and forgotten
The recession is also continuing to devastate homeowners, as Seth Freed Wessler explains for Colorlines. Wessler documents “the country’s long failure to address systemic racial inequity through public policy eventually threw the whole economy into free fall.”

According to a recent report from the Center for Responsible Lending, nearly 6 million homes are at imminent risk of foreclosure right now. It’s estimated that by 2014, 13 million homes will be gone. The report shows that Black, Latino, Asian, Native American and Alaskan Native/Pacific Islander borrowers are all at greater risk for immediate foreclosure than White borrowers.

One of the most startling findings is that between 2009 and 2012, “Black and Latino communities will be drained of $194 and $177 billion, respectively, because of the plummeting home values in the high foreclosure neighborhoods,” Wessler writes.

Unfortunately, there’s little relief in sight for these communities. Wessler explains that the Obama administration’s attempt to help prevent foreclosures, the Home Affordable Modification Program, or HAMP, has done more to help mortgage servicers than struggling homeowners. The recent defeat of an unemployment benefits extension only makes matters worse. Some advocacy groups are calling for a moratorium on foreclosures as a temporary remedy. Obama supported such a measure during his 2008 Presidential campaign.

Silver lining, but no silver bullet

If there is a silver lining to this ominous economic raincloud, it might be found in recent changes to to the Home Mortgage Disclosure Act (HMDA), an anti-redlining measure from 1975. As Kat Aaron and Mary Kane report for The American Prospect, these changes are one result of a long fight against discriminatory lending practices, and could prove to be invaluable for “consumer activists, regulators, and researchers trying to identify egregious lenders and their loans.” The American Prospect has more about the revisions to HMDA and what they might mean for the ongoing fair-lending debate.

Many Americans are also turning to timebanks as an alternative to the down economy. Timebanks provide a cooperative, egalitarian system for sharing skills and trading services with others, free of charge. As Mira Luna reports for Yes! Magazine, the trend might be a result of tough times, but it has an upside.

“Instead of paying professionals who we may never see again to provide services, we can use time exchanges to find neighbors who might provide service in exchange for hour credits, thereby saving scarce U.S. dollars for things like rent and medicine.

In the process, people get to know and trust their neighbors, establishing caring relationships that can help reweave the fabric of our communities, and replace our culture’s over-reliance on individual financial security.”

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