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The Hidden Casualties of the Great Recession

The Hidden Casualties of the Great Recession

by Annie Shields, Media Consortium blogger

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 in 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.”

This post features links to the best independent, progressive reporting about immigration by members of The Media Consortium. It is free to reprint.

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Image used under Creative Commons License via Flickr with thanks to taberandrew


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38 comments

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9:19PM PDT on Aug 2, 2010

thanks

8:14PM PDT on Jul 18, 2010

The pressure needs to be put on to stop foreclosures NOW. And to extend unenployment NOW. The foodstamp program must be expanded, the 1st $20,000 of everybodys income must be exempted from payroll tax. The social security dividend must be increased to at least a poverty level stipend for those who recieve less than $20,000 a year. Money must get down to the low income folks now, and for you who are still howling about the deficiet, give it up! Plenty of us have already caught on to the way people have been ripped off for decades, probably centuries by this printing money to be loaned to us, rather than printing money to be given to the people of this country to circulate among us so that we can take care of ourselves.You can only create so many jobs. But we will still need to pay our bills. I'm not even suggesting that taxes must go up, only that we need a money supply that isn't borrowed. We have been enslaved by this system and now the system can't create jobs fast enough, or pay enough for people to live on.There is a movement afoot about this very thing but I don't know what it's called. Reguardless, it should be obvious that what is needed is lots of money coming into the lower economic level that doesn't have to be paid back, and isn't from taxes. And no, it won't cause inflation. Wasteing resources causes inflation . Scrap the economic theories. They're wrong.

8:52AM PDT on Jul 18, 2010

No home, no job, no future. For some who have lived all their lives in relative middle class comfort, a potentially lethal course in survival. The ranks of the homeless is swelling daily. Among those ranks, of course are predators ready to use people for tasks such as prostitution and dope muling. They also end up as lookouts and wheel-men and women, accessories to professional criminals in crimes , and the worst part is that they are not part of the criminal "fraternity." Because they are not, they are expendable. Instead of getting the reward offered they end up dead. What is this government doing about it? Plenty to hear the speeches, but speeches is all the population is getting. What event will finally awaken our so called leadership to the fact that they are on this downhill landslide with the rest of us is beyond me, perhaps no event will awaken them. Try making a little noise they may hear in November, vote out every incumbent you find on the ballot. All those new faces in congress may provide a hint, and then someone may wonder what will happen in the next major elections, now that the political "chopping block" has fresh blood on it.

5:56AM PDT on Jul 16, 2010

sometimes you have to work for less $, and perhaps get 2 jobs, what else in this recession??

12:29AM PDT on Jul 16, 2010

Interesting article and interesting comments. I worked in the mortgage industry for 43 years and was laid off in 2008 when the bottom dropped out. The bank I was with for 20 years did not make subprime mortgages but did make no-income verification loans to people with excellent credit and those who had a history of saving and not using a lot of credit.
There have been laws on the books against predatory lending, red-lining, discriminating, over charging, usurious interest rates and so on but while banks were audited frequently it was not so for mortgage brokers. Unfortunately there were a lot of mortgage lenders on commission who had no integrity and did not disclose terms properly especially to those who had not purchased homes before and were trusting their lenders.
The majority of foreclosures are not because of lazy greedy buyers, but unscrupulous lenders and those wall street institutions who sold subprime mortgage as derivitives to line their greedy pockets.
People of all types, politics, races and lifestyles have lost homes as they've lost their jobs. Many people who lost their jobs and couldn't find work, especially in smaller towns or rural communities have had to choose between food for their families or keeping their homes. Tragic in every instance. Trying to stereotype or label people solves nothing and contributes nothing to solutions.

12:07AM PDT on Jul 16, 2010

Thanks for the post.

7:25PM PDT on Jul 15, 2010

Can we count on this information?

1:01AM PDT on Jul 15, 2010

Nicki R, I feel for you. I am a case manager of home and community based services, physical disability waiver, and I can clearly see the fix my consumers (clients) are in. They have a tough time paying rent and utilities and yet, the Republicans want to take even more social security away from you.
I live in Kansas and because Kansas is having a really tough time financially because our legislature is dominated by conservative Republicans, and when that happens, you get a very inequitable state budget. Our agency is freezing our merit raises probably as long as the state of Kansas is tightening its belt since it is the approver of Medicaid expenditures by our consumers. Now, our consumers can't even access their own $7500 Medicaid assistive services fund unless they qualify for the very tough to meet list of extenuating circumstances. I see every day what you are describing as your own situation so I can vouch for you to the other readers, some of which might not have a clue, and try to tell you to suck it up because they don't like entitlements.

12:51AM PDT on Jul 15, 2010

Heidi H hits the nail on the head. The conservative Republicans are about as anti-human rights and as non-compassionate as you can get unless they are helping rich people get even richer in its compassion to the already wealthy. The Republican Party is the GIG party, the Greed Is Good Party. They have the dark soul of the fictional character in Star Wars, the Emperor. The Republican party is evil personified, and I would tell that to my representative Lynn Jenkins who takes every opportunity she has on public radio to verbally pound Democrats to bits. Whatever it takes, I will see to it that her political career ends up like our former 2nd District Congressman, Jim Ryun, whose career is aground. He can't even beat the locals anymore. Republicans swiftboated the better Presidential candidate of the two in 2004, I will publicly badmouth Jenkins every chance I get. It's called giving them a dose of their own medicine.

9:31PM PDT on Jul 14, 2010

a light-hearted yet serious and very real foreclosure example... http://typobounty.com/Funny/Foreclosure.htm

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