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Black Unemployment Crisis: Loss Of Government Jobs Hurts African Americans Hardest

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    Black Unemployment Crisis: Loss Of Government Jobs Hurts African Americans Hardest

    June 7, 2011

    Kenneth Mathis is the kind of man who values stability.

    More than three decades ago, when he was 19, Mathis was hired by the Federal Deposit Insurance Corporation, a government position that seemed to confer assurance of middle class comforts.

    As an African American, he figured a job with a government agency would be a way around "the good old boy networks" that seemed to preclude his employment at many private businesses. He reckoned that a government job would spare him from the volatility faced by private companies, meaning his paycheck would continue through good times and bad.

    Mathis later took a job that kept him at home in Houston, joining the city’s Housing and Community Development Department, a position that he figured would last until retirement.

    But his vision of a steady career culminating in a farewell cake and a pension came to an abrupt end last August, when his boss summoned him into his office, closed the door and told him that his job was being eliminated.

    Within minutes, a pair of plain-clothes police led Mathis to another office, where he was forced to surrender his government identification card and city-issued-cell phone. He grabbed his bag and a picture of his wife before being escorted to the elevator door.

    "Working for the government was supposed to have been the safe route," said Mathis, 55. "Somehow, I fell through a trap door."

    Such a sentiment has echoed throughout the nation, as the red ink left in the wake of the Great Recession prompts federal, state and local government agencies to pare down payrolls and eliminate positions that have sustained middle class dreams for decades. Since the beginning of 2008, some 375,000 government jobs have been eliminated, according to the Labor Department.

    The cuts fall with marked impact on African Americans such as Mathis. Nearly 21 percent of the nation’s working black adults hold government jobs, as compared to some 17 percent of white workers and 15 percent of Latinos. Public agencies are the single largest employer for black men, and the second most common for black women.

    The disproportionate vulnerability of African American employees to the impacts of government budget cuts helps explain why black workers have fared so much worse than other slices of the population since the recession’s end. In May, the unemployment rate among black Americans reached 16.2 percent, up from 15.5 percent a year earlier. By contrast, white unemployment was eight percent, an improvement from the 8.8 percent level of a year earlier.

    The loss of government paychecks erodes one of the great equalizing forces at play in the American economy for more than a century. A government job has long offered a pathway for African Americans to sidestep discrimination that has impeded progress in the private sector, where social networks often determine who has a shot at the best jobs, say experts.

    The 1987 film Hollywood Shuffle embodies the crucial importance of government work for black families. In one scene, a struggling black actor is reminded by his grandmother that he can always get work at the post office.

    "Something similar but maybe less pronounced can be said about a lot of government agencies," said Philip Rubio, a labor historian at the University of North Carolina A&T State University, who took that movie scene as the title for an academic book on the subject, "There’s Always Work at the Post Office."

    African Americans first gained employment in the postal service in the 1860s, in the wake of the Civil War. Two decades later, the post office began hiring through the civil service exam, creating equal access to jobs and equal pay regardless of race or gender. And civil service protections allowed postal workers to get involved in controversial issues such as the earliest stages of the Civil Rights Movement without risking their jobs.

    By 1940, 14 percent of the black middle class worked for the postal service, according to Rubio. In the decades since, other government departments, from housing to public works to sanitation, became major employers.

    But now, with the broader economy stuck in a deep rut and working opportunities chronically lean, those government jobs are diminishing, too.

    "Many of the black people you don’t hear about on the news, the black people who own homes, who can afford to send their children to college and have modest savings, many of them worked for some branch of government before the recession began," said Steven Pitts, a labor economist at the University of California, Berkeley’s Center for Labor Research and Education. "There is good reason to be very concerned about what will happen when this work disappears."

    Houston does not, at first glance, seem like the sort of place where workers would be suffering. A sprawling metropolis defined by big oil, big malls and big freeways, the Texas city seemed impervious to the forces of decline that have beset so much of the country in recent years.

    "To explain that I just need one word: oil," said Mike Valant, survey chairman with the Houston branch of the Institute for Supply Chain Management, who issues a monthly report on Houston’s economy monitored closely by the Federal Reserve. "Oil hasn’t taken much of a hit. Also the health care industry just kept growing."

    The Houston area’s roughly two million residents –- about 23 percent of them black –- work largely in three industries: oil, health care and government.

    But like every major American metropolitan area, Houston suffered the end of the speculative frenzy in real estate. By the end of 2010, some 12 percent of the city’s housing sat vacant, according to Census data. With so many houses empty and real estate transactions stagnant, the city saw its revenues decline as development fees fell off, along with sales and property taxes.

    By March it became clear. The city faced a budget shortfall of $130 million, and given that Houston is legally required to balance its budget, cuts became virtually unavoidable. The majority of Houston’s government workers are black, so those cuts would almost certainly fall heavily on the African American community.

    Mathis was among 60 city government workers who lost their jobs in the course of department consolidations during 2010. A similar fate now confronts 750 additional municipal employees who will be laid off on July 1.

    Most major American cities have been eliminating government jobs. Local governments have shed 446,000 employees since employment in the sector hit its peak in September 2008. They plan to cut nearly 500,000 more over the next two years, according to a national survey of governments.

    The impact of those cuts seems certain to fall disproportionately on African Americans, exacerbating already extreme rates of joblessness. It's no coincidence, some black union activists say. Many think the preponderance of African Americans in the government workforce makes them a useful target for some politicians –- particularly Republicans, cognizant that the black vote trends overwhelmingly Democratic.

    "In some states I think it’s a power play, pure and simple," said Lee Saunders, secretary treasurer of the American Federation of State County and Municipal Employees, a public sector union, and the son of a union bus driver. "In some sort of sick way, some of these ultra conservatives think that if you hurt African Americans and they are laid off and can't find work that there may be negative implications for the 2012 presidential election. If you have a lot of people who are frustrated, maybe it is going to be very hard to get your base out to vote."

    The first time Cassandra Marshall walked though the doors at 640 Temple Street in downtown Detroit, it was the early 1970s. A 19-year-old welfare mother, she was summoned to answer her social worker’s questions.

    More than a quarter-century later, in 2009, Marshall worked in the very same office as her social worker. Now a manager with a master’s degree, she earned $62,000 a year and had a six-figure balance in her 401(k) retirement account. Her two children had nearly completed college.

    But in March 2009, Wayne County executive Robert Ficano announced the need to reduce its payroll as the local government contended with a projected budget deficit of at least $90 million. The cash-strapped county would first offer buyouts. If that didn’t close the gap, layoffs would follow.

    Marshall absorbed this news and realized that she might wind up on the layoff list.

    "There are still office politics when you work for the government," said Marshall. "I really had to think about my odds, my needs, where I was at. I realized I had accomplished what I set out to do –- put my babies through school. So I didn’t have to keep fighting to hang on."

    So, on June 1, 2009, she reluctantly accepted a buyout. She traded in her career for about $3,000 in severance, plus the assurance that she would be eligible for unemployment benefits while she looked for work.

    The next day, Marshall suffered what she refers to as her first panic attack.

    "I absolutely could not breathe," she said. "I was like, 'What have I done? This is Wayne County.' If you aren’t UAW (a United Auto Workers union member), Wayne County is the absolute best you are going to do, especially if you are a black woman who came up when I did. I was 56 years old and really thinking, 'where in God’s name am I am going to work?' I was in uncharted waters."

    Today, Marshall’s children are college graduates with careers. She works for a private social service agency, a federal government contractor, operating a prisoner reentry program. She loves her work, she says, calling it, "The job I was born to do." Yet it pays nearly $20,000 less than her old job with Wayne County.

    "I’m living a life I never would have imagined," Marshall said, and not for the first time.

    For Marshall, the lost income means that she may not be able to hold on to her home. She is already underwater and the payments are difficult to make. But Marshall said she is at peace with whatever comes next. And she is thankful to have once worked for Wayne County.

    "That allowed a single mother like me to build a retirement," she said. "If I had never worked there, the plan would be that I would work until I die. That’s how important that job was."

    In Houston, Mathis still struggles to adjust to a life shorn of the stability he had always sought and mostly known.

    He feels the burden of financial responsibility, a house to maintain and two cars. He and his wife, who works as a placement agent at a staffing company, were accustomed to a household income of $90,000 a year. Mathis’ paycheck made up more than half that income. The cuts to the city’s budgets triggered deep cuts in their own spending.

    "I can honestly say that this is the first time since probably my 20s that I’ve had to monitor my lights," said Mathis. "We are watching our pennies."

    Mathis tried to use his job loss as a chance to focus on gaining new skills. He resumed studies toward an MBA, graduating in January. Since then, he has applied for all sorts of jobs: public and private positions, jobs in the financial industry, in insurance and in sales.

    Two weeks ago, Mathis landed a contract accounting job with Houston’s health department. The job is set to end July 31 but could be extended, Mathis has been told. He’s also in the running for another contract job with a private company. Neither job comes with any benefits, a major loss for a 55-year-old man.

    In February, Mathis also started up a trio of online retail businesses, selling essential oils and gifts over the Internet. Mathis says they are moving along "slowly." They have not turned a profit yet, but the contract work has given him a bit of money to help promote the sites.

    That puts Mathis in at the edge of a new trend. Depending on your perspective, he's a man who has lost the safety net of a public sector job and now scrambling to replace the income, or a reluctant yet eager fledgling member of the business world.

    "Probably, many more of us who are going to have to become entrepreneurs," he said. "Pray, let it ride, and see what happens."

    Filed/discharged/closed Chapter 7 in 2010!

    The slow moving car crash keeps crashing.


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