Doug Hall is Director of the Economic Analysis and Research Network at The Economic Policy Institute. This is a slightly revised version of a post that originally appeared on EPI’s Working Economics blog.

Later today, I will pass through two of our nation’s airports, where I will see ample evidence suggesting that we collectively place a very high priority on protecting our transportation infrastructure from harm. On my way through security, I will dutifully remove my shoes, and will remove from my pockets such benign items as a marker, an extra paper napkin from lunch, and the keys to my bike lock.

Yet throughout this same country, there are nearly 70,000 bridges that the U.S. Department of Transportation has identified as “structurally deficient.” We all recall with horror the 2007 collapse of the bridge in Minneapolis, yet there are thousands of such ticking time bombs throughout America today. In three states — Iowa, Oklahoma, and Pennsylvania — there are over 5,000 bridges deemed to be structurally deficient. While not every one of those bridges is in imminent danger of collapse, these remain alarming numbers.

Fixing America’s crumbling infrastructure should be a top priority for every national, state, and local official throughout the nation. It’s easier than often is the case in public policy debates to connect the dots on this one:

• Crumbling infrastucture + alarmingly high rates of unemployment (particularly amongst construction workers) + interest rates at rates that remain at unprecedented low levels = jobs plan that helps put Americans back to work today, while laying the foundation for future economic growth and prosperity.

While there’s certainly room for debate about how to proceed with infrastructure investment at this time, there really shouldn’t be any debate about whether to do this. My colleague, John Irons, testified recently before the Congressional Progressive Caucus Ad Hoc Hearing on Job Creation. In his testimony, he noted, “Congress should immediately reauthorize the Surface Transportation Act at the higher spending levels requested by President Obama … increase[ing] transportation investments by $213 billion over the next decade [thereby] add[ing] 350,000 job-years of employment over 2012-2014.”

Michael Likosky has written at length about the need to create an infrastructure bank, leveraging both public and private sector money to strengthen America’s infrastructure, and noting that, “If we don’t find a way to build a sound foundation for growth, the American dream will survive only in our heads and history books.”

For state governments, investing in infrastructure through bonding is one of the few (and most effective) tools at their disposal to help spark a real economic recovery that helps working families today, while making investments that will contribute to future prosperity. Friday’s “Smart Brief” from the American Society of Civil Engineers highlights Massachusetts Gov. Deval Patrick’s plan to invest $10 billion over the next five years in capital spending, “focus[ing] on job creation through transportation projects, smart growth and construction and improvement of public higher-education facilities.” This is the sort of initiative that other states should emulate. Only through such aggressive investment in infrastructure will Americans in every state be confident that they are safe crossing today’s bridges, and that the road ahead leads to shared prosperity.

The opinions stated above are not necessarily those of OK Policy, its staff, or its board. This blog is a venue to help promote the discussion of ideas from various points of view and we invite your comments and contributions. To see our guidelines for blog submissions, click here.

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Fab Lab Tulsa opened on a hot September 13th in 2011 amid the bustle of central Tulsa’s Kendall-Whittier Neighborhood. It is incorporated as a 501(c)3 non-profit operating a 3,500 square foot public access fabrication facility, making it one of the largest Fab Labs in the world. Its organization, its size and its location make Fab Lab Tulsa a truly unique enterprise.

This is all the more important because we are encountering a rapidly changing social and economic world. When dealing with change I like to quote the Executive Director of the Philbrook Museum of Art in Tulsa, Randall Suffolk: “if you dislike change then you’re going to hate irrelevance.” Economically, our nation, our states and cities must confront the notion of irrelevance with a robust response. This response, I believe, should be in the form and practice of personal fabrication.

Personal fabrication, like in a Fab Lab or Hackerspace or Makerspace, is making things you need with tools which are accessible to you. This IS the next industrial revolution, except that it won’t be industrial, it will be personal. People will use and develop custom products or technology which will impact their lives in ways profound and ordinary…from creating your own smart phone to building a kitchen table so your family can enjoy a meal together.

Fab Lab is short for “fabrication laboratory”. It originated with Dr. Neil Gershenfeld in 2001 at MIT and has since spread around the world embodied as over 100 Fab Labs where people “make (almost) anything.” Projects made in the lab range from furniture, to stickers, to environmental sensors, to robots, to UAVs, to sculptures, to small houses. Really you can make almost anything. Hackerspaces and Makerspaces function on similar principles as clubs or co-ops, and number in the hundreds as well.

In a broader context, making things you need using a local fabrication shop, like a Fab Lab, has radical economic consequences, analogous to the automobile and its effects on the formerly ubiquitous horse and buggy. We live in a world now with fragile global supply chains, expensive fuel, increasingly complicated products and systems, and a growing ignorance about the basic computing tools and technology luxuries in our lives. Natural disasters, wars and the like show us that our lives are intertwined with global events.

Personal fabrication presents another outlook. If you can make almost anything from readily available raw materials then long, fragile and expensive supply chains could almost be eradicated. Fuel costs could be drastically reduced because only raw materials and supplies are shipped, not finished goods. The benefit is that raw materials are typically durable, compact and cheap, while finished goods are typically bulky, fragile and expensive. Further, knowledge and expertise of our everyday tools becomes pervasive because we either produce or see the production of our own goods. Not only does production become personal, on a human scale; education becomes personal, through experiential and peer-to-peer learning.

The key opportunity is not the transmission of physical goods, as is our economy today, but the transmission of data, designs and ideas. For example, a transaction in today’s economy might be the purchase of a bicycle. Presently, the bike is bought “ready to ride” at one of several retail shops. In the fab economy, the transaction might be in a Fab Lab where the computer design files and raw materials are purchased, but fabrication happens right in front of you, either by you or by someone else. A bicycle is a simple example, but complicated technology or robotic devices could be done the same way.

The implications for our economy are far-reaching. City zoning for industry could be discretized from large and monolithic production sites into multiple micro-sites which, by comparison, are exceptionally scalable for output and product type. Industrial parks and long commutes could be reduced or eliminated. In essence, because the conventional centralized factory concept is democratized into many mini-production sites, the paradigm of the industrial revolution is broken. Data and information, which is very cheap to transmit, becomes the primary focus of the supply chain. The notion of the retail economy is changed forever because the functions of production, distribution and retail are no longer separated. They are combined into a single personal fabrication micro-site.

The fab economy is already growing in the US and internationally. Fab Lab Tulsa is among about 34 in the US. In other regions, there are three Fab Labs in Detroit alone and five in the state of Ohio. These are “rust-belt” regions which now recognize the step change which is required to leap-frog national and global competitors. The most ambitious global Fab Lab project is in Barcelona, Spain. Spain, as the news reports, is an economy and government in crises. However, the city leaders in Barcelona, working with the four Fab Labs there, have devised a plan to bring Fab Labs to nearly every corner of their metro. Quite simply, Barcelona will be the world’s first Fab City.

The city planners in Barcelona would tell you that a Fab City can be considered City 5.0. Version 1.0 was an agrarian settlement. Version 2.0 had basic transportation infrastructure but no utilities. Version 3.0 has modern utilities and infrastructure. Version 4.0 of the city, today, is electrified with modern internet communications and zoning ordinances. Version 5.0 is a city networked with fab labs which import raw materials and data for producing the city’s needs ranging from environmental sensors to kitchen utensils, and which exports designs, data and intellectual property to be used in production in other locales.

The next evolution in our cities and in our economy is the adoption of personal fabrication. This approach to commerce is the ultimate just-in-time system which minimizes environmental impact, empowers entrepreneurship and education with cutting edge technology, and brings resources to the public the likes of which they’ve never experienced before.

Using a Fab Lab like the one in Tulsa is simple…don’t postpone your first visit until you have an idea. Come by Fab Lab Tulsa right now to see the machines, enjoy a tour and make a sample project like a key chain or bumper sticker.

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Wage theft, or an employer’s failure to pay a worker for completed labor, has emerged as a serious danger in the 21st century labor market.  According to a 2011 report by the National Employment Law Project (NELP), wage theft is widespread. It is not limited to a specific industry or employer, and it is frequently deliberate.  It can take many forms, including “being paid less than the minimum wage, working off the clock without pay, getting less than time and a half for overtime hours, having tips stolen, and seeing illegal deductions taken out of paychecks.”

Despite basic protections guaranteed to workers by minimum wage and overtime laws, waning resources for enforcement make these protections inadequate.  Ever-changing forms of employment, including outsourcing to subcontractors and classifying workers as independent contractors, have moved growing numbers outside the protection of the law. All workers are at risk, but the most vulnerable groups are women, immigrants, and people of color.

The Fair Labor Standards Act establishes a nationwide minimum wage floor of $7.25 an hour, as well as record-keeping requirements and child-labor protections.  States are not allowed to weaken federal standards, but they may enact stronger standards or cover more workers.  Minimum wage has been set higher than the federal level in 17 states and the District of Columbia. Nine states provide for automatic minimum wage increases to keep pace with inflation, so its buying power does not go down every year. Oklahoma is not one of those states.

Even if we don’t increase the minimum wage above federal levels, we should make sure that it is enforced. The National Employment Law Project outlines the importance of enacting additional wage theft policies at the state and municipal level, such as:

raising the cost to employers for violating the law; making government agencies effective enforcers of the law; providing better worker protection from retaliation; ensuring workers are paid for all hours worked; ending exclusions in minimum wage and overtimes laws; putting an end to independent contractor misclassification and holding subcontracting employers accountable; and guaranteeing that workers can collect from their employers.

One troubling gap is that Oklahoma denies minimum wage and overtime protections to domestic workers, a category that lumps in teenage babysitters with full-time home health care aides. Comprehensive protections for all workers in the state, and especially for vulnerable groups, are critical to make sure workers are paid what they deserve.

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Several state leaders have taken to promoting more income tax cuts as the best way to improve Oklahoma’s economy. But is that true? We recently heard Timothy Bartik, senior economist at the Upjohn Institute for Employment Research, discuss the latest research on which state-level policies are most effective at boosting the economy. [You can see the full transcript of his remarks here.]

Bartik explained that across-the-board business tax cuts are usually not the most cost-effective tool for economic development. Because state government resources are small relative to the size of a state’s economy, we need policies with a high “bang-for- the-buck” to see meaningful increases in per capita earnings. Across-the-board cuts are not targeted enough to account for the opportunity cost of paying for them though reductions in public services or increases in other taxes.

Instead, Bartik recommended five policies with proven effectiveness and high bang-for-the-buck:

1) Customized Job Training

In this program, state governments subsidize job training that is customized to the particular needs of an employer. This customized training is frequently delivered by local community colleges. Bartik says the key for a successful job training program is to target unemployed or disadvantaged workers with good basic skills and directly involve employers.

2) Manufacturing Extension Services

Manufacturing extension services provide businesses with free or subsidized advice on how to improve their productivity and find new markets. Both extension services and customized job training tend to provide the greatest benefits to small and medium sized businesses, which have fewer resources than big business to train specialized skills or research productivity improvements. Bartik estimates that these specialized services can achieve the same benefit as across-the-board business tax cuts at 1/60th the cost.

3) Early Childhood Education

High-quality early childhood education has been shown to be the most effective long-term strategy for economic development. That’s because the benefits multiply over time, with a strong start helping kids to get more out of school throughout their educational careers. The economic benefit is primarily long-term, though Bartik calculates some short-term benefit as well, since improved schools will increase local property values. He also cited high-quality summer school in the early elementary years as a program with good evidence of success.

4) Career Academies

For older students, Bartik pointed to high school career academies. These are programs within high schools that partner with local businesses in a specific career field. Businesses help tutor students, provide internships, and give advice on coursework and student activities. The Oklahoma City School District has already embraced this approach and is expanding next fall with academies in engineering, health sciences, finance, information technology, and hospitality and tourism. Bartik said studies have found an 11 to 1 benefit-cost ratio for career academies, and they work especially well for students who would otherwise drop out of school or not attend college.

5) Wage Subsidies

Finally, Bartik said the most effective short-term strategy for creating jobs is wage subsidies that target job creation for the unemployed. He said the key for this program is a significant subsidy, perhaps as much as $10 per hour, but also stringent requirements for both public and private sector employers. These include mandates that workers are hired into newly created jobs, not existing vacancies, that employers keep workers for at least a year after the six month subsidy period, and that the employers and workers receiving subsidies are chosen by a local job training agency that identifies what new jobs will provide the most useful experience.

Bartik’s ideas point the way to the real path to prosperity for Oklahoma. We are already a low-tax state, and state and local taxes make up an insignificant part of business costs. Therefore we have little to gain by pursuing the low tax extreme even further. On the other hand, by combining our resources to invest in proven strategies, we can multiply the impact of every dollar we spend.

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This blog post was excerpted from remarks by Angela Glover Blackwell, founder and CEO of PolicyLink, during the opening session of PolicyLink’s 2011 Equity Summit in Detroit, Michigan.  The speech presented a new framework for creating an equitable economy.  Click here for a new report from PolicyLink looking at how demographic changes and deepening inequality demand an urgent re-imagining of our economy.

This is a critical moment.  The economy is in crisis.  The middle class is shrinking.  Inequality has come front and center in our conversation in America and we have rapidly changing demographics in which the racial and ethnic composition of the country is changing fast.  This economic crisis really represents a failed growth model, one that was based on a housing bubble; one that was allowed to present itself as opportunity when it was really only credit-fueled consumption that was improving the lifestyles of people [..]

We have a moment in time in which everyone is looking up and deciding that it’s okay to talk about inequality.  That we have to talk about inequality.  That as we struggle and work together as a nation to find our footing again in the global economy, as we try to reverse this crisis that we’re in, we need to make it clear that we cannot be nostalgic for a time that never was, while avoiding a future that is inevitable.  We cannot go back to what we had [..]

We are changing more rapidly than anybody expected that we would.  Already, 46.5 percent of all children under 18 in this country are children of color.  By the end of this decade, the majority of all children in this country will be children of color.  By 2030, the majority of young workers under 25 will be young workers of color and by 2040, the majority of people in this nation will be people of color.  This represents an incredible gift to America – an incredible gift [..]  But the sad, the troubling thing, is so many of those people that represent that gift are being left behind.

We have over a third of black and Latino children who are overweight or obese.  One third of all black teenage girls are obese.  Serious problems in terms of what that represents.  We know that our educational system is leaving millions and millions of children that are Latino and African-American behind.  They’re behind when they begin school, they’re behind by 4^th grade, they’re dropping out before they finish high school.  They’re entering a work system that has no place for a worker that has at least a high school diploma.  While we look at this gift, we know that it will not be viewed as an asset if we don’t deal with these issues.

The United States has invested in equity before.  Right after World War II, California looked at its population and what it saw was a population that was very poor, with a quarter of the people there living below the official poverty level.  Only half of the adults had a high school diploma.  This state looked at its population – that was white – and viewed it as an asset.  Under Republican Governor, Earl Warren, and Democratic governor, Pat Brown, California rolled up its sleeves and it built the best educational system in the country.  It built the best healthcare system.  It built the best system of roads and parks and infrastructure. By 1960, California had a 25 percent advantage in terms of growth and salaries over the rest of the nation.

That is a story about what happens when government and the private sector look at the population that it has, views that population as an asset, and steps up.  We’ve got to step up as a nation [..]  For all of the years that I’ve been working on equity I have felt that it was the right thing to do.  The moral thing to do.  That there was something immoral about a nation that systematically leaves people behind [..] It continues to be the right and moral thing to do, but it has now become an economic imperative.

This nation has no future worth mentioning [..] if it doesn’t figure out how to be competitive in the global economy, how to unleash the creativity and the entrepreneurial spirit that is here [..] That agenda, that equity agenda, has become an imperative for the nation.  Equity no longer stands out there as the thing to do because it’s the right thing to do – begging and pleading for people to find a heart, find a conscience, do the right thing.  Equity is the only way forward.  Equity is the superior growth model for the nation.  [..]

This is not a poor country.  We have more wealthy people than anyone could ever think would be possible.  We have more infrastructure – crumbling as it is – than most places ever dream of [..]  We have the ability; we have the money to do what we need to do [..]  We have a crisis, but it’s not a crisis that comes of not having any resources to address it.  How should we use all that money that we do have?  We need to use it to invest in the nation’s infrastructure because it’s win, win, win [..]  We target the places that need it – rural communities without broadband, urban communities where people are isolated from opportunity because of the absence of transportation.  We invest in the places, we invest the projects, and ultimately we invest in the people.

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The first two posts in this series established the existence of a nation-wide, decades-old disparity in the unemployment rate between black and white workers. Black Oklahomans were unemployed at more than twice the rate (13.1 percent) of their white counterparts (5.9 percent) in 2010. The unemployment rate among black men is exceptionally high, about two and half times higher in Oklahoma.  While the reasons for the disparity are numerous, our last post focused on two explanations around which evidence seems to converge:  the high incarceration rate among blacks and discrimination in the hiring process.  This post explores solutions for closing the unemployment gap in Oklahoma, with an emphasis on reducing incarceration rates and strategies for preserving equal opportunity employment.

One thing we know about the unemployment gap in Oklahoma is that black workers are jobless for much longer than white workers.  Long-term joblessness is a severe impediment to employment.  How do we get the long-term unemployed back on the job?  One effective approach is to incentivize employers to hire them.  Some Workforce Oklahoma centers participate in a temporary program that reimburses employers for hiring workers who have been laid-off or unemployed for an extended period.  The program reimburses employers for ninety percent of the payroll costs of hiring a qualified worker for three months, and sixty percent of the costs for an additional six months.  The employer wins because they get to write off the costs and risk of hiring an untrained new worker, and the employee wins by gaining employment and training under an employer that might not have hired them otherwise.  Employers can also partner with Workforce Oklahoma centers to purchase bonds that cover the perceived risk of employing ex-offenders.  Workforce centers provide myriad other valuable services to the unemployed, like job training and soft skills workshops.

Another thing we know is that at the root of the unemployment gap is the incarceration gap, and solving the former requires understanding the latter.  The rate at which black men were admitted to prison for drug offenses was nearly five times higher than the rate for white men in Oklahoma in 2003.  Overall, thirty-four percent of the state’s prisoners are being held for non-violent drug-related offenses – that’s about nine thousand people this past year.  Aggressive prosecutions for drug offenses increased incarceration rates for all races during the 1980s and early 1990s, but the affect on minority incarceration rates was wildly disproportionate.  By 1992, African-Americans and Hispanics comprised nearly ninety percent of all those sentenced to state prison for drug possession offenses, despite comparable usage rates of illicit drug among whites and blacks.

Some of the incarceration gap is a consequence of idiosyncratic sentencing laws.  For instance, Oklahoma is one of thirteen states with sentencing disparities between crack and powder cocaine offenses; five grams of crack cocaine triggers a ten-year mandatory minimum sentence versus twenty-eight grams of powder cocaine.  The consequence of this discrepancy is that a person booked on crack cocaine possession (more likely to be a person of color) faces systematically stiffer penalties than a person booked on powder cocaine possession (more likely to be white).  One recently initiated effort to streamline the criminal justice system in Oklahoma is the Justice Reinvestment Initiative.  Experts will research and evaluate criminal cases in the state and make comprehensive recommendations for reform with the ultimate goal of keeping first-time, non-violent offenders out of prison.

Finally, giving black workers an equal opportunity in the labor market means investing in diversity education and outreach in the public and private sectors.  The private sector has made great strides in valuing and improving the diversity of their workforce.  One example in Oklahoma is the Williams Company, which place a premium on maintaining a strong and diverse pool of employees by actively recruiting minority applicants and retaining minority employees.  The public workforce benefits from similar diversity efforts through the Office of Personnel Management’s affirmative action employment plans.  State agencies calculate and report their hiring rates by race and gender and annually asses any deficiencies in their staff.  If agencies notice a gap, i.e., an absence or under-representation of non-white or female employees, they can take corrective action and reach out to those under-represented groups as they grow their workforce.

If Oklahoma wants to achieve employment parity for all of its workers, we have to allocate more resources to reaching out to the thousands of long-term unemployed and ex-offenders who struggle to find permanent well-paid work.  The loss of wealth and income associated with extended unemployment, whether because of incarceration or persistent joblessness, devastates working families and disadvantages those workers in the job market for years to come.  Through a combination of job-training and education and incentivizing employers, we can reduce an unemployment backlog that weighs on the state’s potential for productivity and prosperity.

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David Blatt: How would you characterize the current state of Oklahoma’s economy?

Chad Wilkerson: I would say things are still pretty solid for us. We’ve had fairly solid job growth over the past year. Unemployment’s down to 5.5 percent, and in some parts of the state… it’s less than 5 percent.

However, I think that measure may be overstating the degree to which we’ve recovered from the recent recession. There’s been a fairly sizable number of people drop out of the labor force in the last couple of years. This has been interesting me of late because of the fact that Oklahoma’s unemployment rates are down to a level that many economists consider full employment levels, 5 – 6 percent. But if the same share of the adult population was looking for jobs today as in 2007, our unemployment rate for the state would be a little over 8 percent. That’s probably too high because I think the share of the population that was looking for jobs in 2007 was also a bit abnormal – the boom was going on, perhaps too many people were looking for jobs from a productivity standpoint. So our actual unemployment is probably somewhere between 5 and 8 percent. We’re probably not quite fully recovered, but we’re still doing much better than the nation.

DB: We’ve seen that manufacturing has actually been a bright spot over the past year. How do you account for the increase in manufacturing jobs?

CW: I think there are a couple of things. One is, there was  a huge decline in manufacturing jobs during the recession, so part of it is a bounce-back effect. There’s more room and need to bounce back in manufacturing. Another is that much of the global economy has continued to grow, and in emerging markets grow solidly, so exports have been very strong – that’s boosted manufacturing. In our region, and in Oklahoma specifically, those manufacturers that have done the best, especially in recent months, have been those associated with the energy and agricultural markets, which continue to be very strong. Our region’s manufacturing survey has held up better than other Fed regional surveys that have been getting a lot of press recently. A big reason for that is our high concentration of energy and agriculture-related manufacturing.

DB: How vulnerable is Oklahoma to the softening of the national economy?

CW: I think the experience of a few years ago may be the best analogy. We continued to grow for 3 to 4 quarters after the nation started  to decline, primarily because energy activity was still strong. Despite the recent slowing in some of the national economic indicators, some of the market turmoil in the last couple of weeks, oil prices have stayed highly profitable. Natural gas prices have stayed steady at around $4, which isn’t high enough for long-term growth, but still is not a horrible price. So, as long as energy stays strong and the national slowing stays moderate, we should hold on fairly well.

DB: Final question – a recent report that came out of the Kansas City Federal Reserve Bank referred to the ongoing weakening of economic and social conditions among low and moderate-income populations. What factors do you see contributing to continued stress among lower-income households?

CW: Higher education levels have had unemployment stay lower than groups with lower educational attainment. That’s typically fairly highly correlated with incomes. Some of the rising prices that we’ve seen over the past year, much of that has been driven by food and energy prices. Energy prices have come down a little bit in the past couple of months but food prices remain high, and of course that’s a much higher share of low and moderate-income families’ monthly purchase basket. So that’s been a strain, and so long as energy prices and food prices stay high that could continue to be more of a strain for groups that have a higher share of their income devoted to those goods.

This is the second in a series of OK Policy interviews with experts on the economy. Click here for our interview with Lynn Gray of the Oklahoma Employment Security Commission

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The article, by features editor Don Peck, provides a powerful and sobering look at how economic opportunity and financial security are increasingly out of reach for a growing segment of the American population. He argues that:

Arguably, the most important economic trend in the United States over the past couple of generations has been the ever more distinct sorting of Americans into winners and losers, and the slow hollowing-out of the middle class.

While Peck provides lots of data about widening income inequality and the ever-greater concentration of wealth in the hands of the few, his essay is most compelling in its focus on the fading fortunes of the majority of Americans who are without a college degree and who make up the ranks of the non-professional middle class.

The true center of American society has always been its nonprofessionals—high-school graduates who didn’t go on to get a bachelor’s degree make up 58 percent of the adult population. And as manufacturing jobs and semiskilled office positions disappear, much of this vast, nonprofessional middle class is drifting downward.

The loss of nonprofessional jobs has hit men especially hard: whereas in 1967, 97 percent of 30-to-50 year-old men with only a high school diploma were working, by 2010, just 76 percent of this population were (see our blog post on how the Great Recession hit men hardest). Job losses among the moderately educated are not only leading to financial strain on families, but are having profound social and cultural consequences. Citing the research of sociologist W. Bradford Wilcox, director of the National Marriage Project, Peck writes:

(A)mong “Middle Americans”—people with a high-school diploma but not a college degree—an array of signals of family dysfunction have begun to blink red. “The family lives of today’s moderately educated Americans,” which in the 1970s closely resembled those of college graduates, now “increasingly resemble those of high-school dropouts, too often burdened by financial stress, partner conflict, single parenting, and troubled children.”

Peck concludes his essay by presenting a range of proposals to revitalize the middle class, including renewed investment in research and development, support for vocational training, career ladders for service sector employees, expansion of the Earned Income Tax Credit, and higher taxes on the wealthy. He recognizes that his proposals are not a panacea and are not without drawbacks. But he also reminds us of the threat of doing nothing: the erosion of the middle-class and the ever-growing economic, cultural and physical separation between the fortunate few and the struggling many. It is not an America most of would recognize or wish to see.

In addition to the Atlantic article, you can listen to a 30-minute interview with Don Peck by Rich Fisher for Studio Tulsa on KWGS, Tulsa’s NPR station.

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Part One of this series examined the stubborn persistence of the unemployment gap between black and white workers.  Despite decades of improvement in social, political, and economic status, black Americans are still unemployed at twice the rate of their white counterparts, a ratio that hasn’t changed since the 1940s.  Why aren’t black workers achieving employment parity?  Researchers point to two factors: (1) the high incarceration rate among blacks, especially black men; and (2) discrimination in the hiring process.

Oklahoma incarcerated 25,476 people in 2010, 30.5 percent of whom were black.  Since only 7.4 percent of the population of Oklahoma are African-American, there are more than four times as many blacks in the prison system as there are in the state’s general population.  This is an even larger disparity than the national average, where three times more black people are incarcerated than their population would predict.  Oklahoma ranked 9th in black incarceration rates in a 2005 comprehensive census of state and federal correctional facilities.  These exceptionally high rates of incarceration amount to a double whammy for black joblessness.  Researchers Bruce Western and Katherine Beckett explain:

The impact of incarceration on unemployment has two conflicting dynamics. In the short run, U.S. incarceration lowers conventional unemployment measures by removing able‐bodied, working‐age men from labor force counts. In the long run, social survey data show that incarceration raises unemployment by reducing the job prospects of ex‐convicts.

Since the Labor Department doesn’t include prison populations when calculating unemployment statistics, the already sky-high black jobless rate is actually even higher than the reported figure.  Also, higher black incarceration rates multiplies the effects of hiring discrimination on black unemployment.

Hiring discrimination against ex-offenders is well-documented and widespread.  In Oklahoma, it’s even explicitly permitted by statute.  As we previously blogged about here, state law puts up barriers to ex-felons pursuing a long list of professions, including cosmetologists, funeral directors, athletic trainers, pawnbrokers, marital and family therapists, and more.  Unfortunately, hiring discrimination is not limited to black ex-offenders, but is a problem that has faced black job-seekers in this country for more than a century.

Despite a litany of post-election commentary in 2008 and high-profile best-selling books heralding the end of racism in America, scholarly research is unequivocal on the question of hiring discrimination against black applicants: it’s alive and well.  Sociologist Devah Pager’s groundbreaking peer-reviewed research has demonstrated that black applicants without a criminal record are less likely to get call-backs from prospective employers than white applicants with a criminal record and just released from prison.  Economics professors at MIT report a sizable gap in callbacks for job applicants with white-sounding names versus black-sounding names.  Submitting identical resumes online - Brendan, Gregg, Emily and Anne received 50 percent more call-backs across the board than Tamika, Aisha, Rasheed and Tyrone.

These two explanations – incarceration and discrimination – stand out above the others as best able to account for the unemployment gap.  While some have suggested that differences in education might be to blame, black unemployment is significantly higher than that of whites at all levels of educational attainment.  Algernon Austin, an economist at the Economic Policy Institute explains further:

Over the course of the recession, the unemployment disparity between college educated blacks and whites actually widened.  If black workers who are the most prepared to compete and work in the new economy can’t find jobs, that’s something that we as a country have to take seriously.

The sobering reality is that black unemployment is probably even worse than the data documents and is perpetuated by high incarceration rates and deeply entrenched prejudice.  Oklahoma’s problem is acute, faring worse than most other states in terms of black incarceration and black unemployment, as this series has documented.  Stay tuned for Part Three, which will review potential strategies for narrowing the racial unemployment gap in Oklahoma.

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The FRB of Kansas City conducts a quarterly survey of non-profit and community organizations that serve low- and moderate-income (LMI) populations in the Tenth District.* Respondents are asked about the economic conditions of the clients they serve. The results are used to construct indices measuring the financial condition, service needs, jobs availability, affordable housing, and credit access of LMI populations.  The June report found conditions continuing to worsen for LMI populations in the 2nd quarter of 2011, although in some sectors the gap between the number of respondents reporting things are getting worse and those reporting things getting better is narrowing :

• The Financial Condition Index, which is the broadest measure of the financial health of the LMI population, revealed significant deterioration. The report states that, “Persistent unemployment, diminished credit standing, and rising costs for basic needs were noted as impediments to financial recovery in the LMI community.”
• The Service Needs Index revealed growing demands for services by organizations serving the LMI population. Increased demand was attributed to rising costs for essential items, an exhaustion of financial resources by the long-term unemployed, and a rash of natural disasters, including flooding and tornadoes.
• The Jobs Availability, Affordable Housing, and Credit Access indices all showed slight improvements in the latest report but remain in negative territory. In the employment arena, “District contacts observed that employers in the LMI community have been relying heavily on part-time workers and that pay and hours have been reduced for many.” In the area of affordable housing, impediments included tighter mortgage lending standards and reductions in government funds available to assist LMI families buy homes. Regarding credit, poor credit histories and other obstacles to affordable credit have led to reports of greater borrowing from payday lenders.

In addition to questions about their clients, respondents also reported on the strength of their own organizations, which were aggregated into two additional indices: the Organization Funding Index and the Organization Capacity Index. Most organizations reported a worsening of their financial situation. The report notes:

While many contributors made efforts to maintain their giving during the recession and early recovery, donations have waned as they have struggled to meet other financial obligations. Recent government budget cuts have exacerbated the funding situation.

The survey not only found that the situation of low- and moderate-income clients and organizations had worsened in the past quarter, it also found general pessimism about the direction things were expected to go in the months ahead. In particular, little faith in the economic recovery  and the expectation of persistent federal, state, and local budget cuts are dampening the outlook of those who serve low- and moderate-income populations.

The Federal Reserve Bank of Kansas City was the first of the Fed’s regional banks to conduct a survey specifically exploring conditions for low- and moderate-income populations, a path which several other banks have now followed. Although the results of the survey should be interpreted with caution – the indices are based on responses from some 100 to 150 organizations and are a measure of the perception, rather than the actual prevalence, of hardship – they clearly suggest that the recession to date has been far too weak to lift up those huddled on the bottom rungs of the economic ladder.

* The Tenth Federal Reserve District encompasses Oklahoma, western Missouri, Nebraska, Kansas, Wyoming, Colorado, and northern New Mexico. LMI individuals have incomes below 80 percent of the area median income, which is defined as the metropolitan median income for urban residents and state median income for rural residents

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