About 75 million non-elderly individuals lived in families with combined weekly earnings below the poverty line in May, CBPP analysis of new Census Bureau data shows — far above the pre-pandemic (February) level of roughly 60 million, though below the April figure of about 80 million. (See Figure 1 and Table 1.)
This open letter from The Sadie Collective Community was published on Medium on June 11, 2020. The Sadie Collective is the first American nonprofit organization that aims to increase the representation of Black women in economics and related fields.
This letter is about whether you will choose to stand on the right side of history as your Black colleagues are hurting. Every day we do our best to show up for work, despite understanding that COVID-19 has disproportionately impacted our communities. Additionally, over the past weeks, the proliferation of news highlighting the plight of unjust police brutality plagues us. Many of us attempt to cope with the current reality and still show up for work, an all too familiar lifestyle of double consciousness, coping with the current reality of our broader lives while showing up, always at our "best," in the workplace. This letter is not a plea for your sympathy, but rather a call to action for allies who understand the systemic violence that has led to dozens of protests across the United States. As demonstrations and the movement at large are being undermined by white supremacists, accelerationism and senior economists, it is necessary that the field take deliberate measures to address the exclusion of Black economists.
Within our nation, systemic racism is an age-old problem, demonstrated most recently by the police killings of Breonna Taylor and George Floyd. The systemic oppression of Black people enables this form of direct violence at the hands of the police, along with countless other varieties throughout society at large. We need a vocal and action-oriented approach which shows you care that your Black colleagues do not walk through the world living in fear of how their lives are disregarded in America. We are reaching out because we are concerned with your immediate acknowledgment, coupled with meaningful action to address this issue.
Here are examples of institutions who have demonstrated a commitment to making or upholding change:
University of Minnesota: The institution will be scaling back ties with the Minnesota Police Department who is responsible for the death of George Floyd.
YouTube: Released a statement of concern and donated $1M in support of efforts to address issues of social injustice.
Glossier: The platform released a statement of concern and will be donating $500K in grants to Black-owned beauty supply companies and donating $500K across organizations that are committed to combating racial injustice.
Top Tech Companies: The linked companies have issued a statement and are being tracked. Note that the data on Black employees are not disaggregated, so for companies with a high number of Black employees, there is still much work to be done. We do recognize that acknowledgment is a step in the right direction
National Economic Association: The organization released a statement which condemned the disproportionate use of lethal force on Black people in a way that was not just filled with platitudes but with a denunciation of injustice, maltreatment, and racism is not only policing but in the economic and social structures of the U.S. as a whole.
As the future of the economics profession, we are demanding that institutions, such as the American Economic Association, Federal Reserve System, and National Bureau of Economic Research, commit to the following to begin addressing the racial inequities experienced by Black people:
Increased funding from the American Economic Association for Howard University, a Historically Black University, Economics Department which has been chronically underfunded and is the the only Historically Black University that offers a PhD program in Economics. Furthermore, Howard University's Economics Department is also one of the top producers of Black undergraduates majoring in economics and the top producer of Black (and Latinx) PhD students in economics. The infrastructure to support continued diversity is set up well, however, the funding remains a barrier. More can be done to support such a critical institution in sustaining an important pipeline.
Commit to multi-year financial and strategic partnerships with organizations and journals dedicated to advancing the representation of Black people in economics such as the National Economic Association, which is the only organization for Black economists, and the Sadie Collective, the first non-profit organization dedicated to increasing the representation of Black women in economics and related fields.
Every university must commit to establishing an undergraduate program, inclusive of targeted outreach to Black students, that provides students with access to tutors and resources for quantitatively demanding courses, research opportunities, doctoral students and professor talks, and the like. Universities and institutions can look to the University of Maryland System for examples of how to execute these types of programs: PADE Scholars (College Park) and Sloan Fellows (UMBC), both of which are similar to a widely-known STEM program for minorities also housed at UMBC, the Meyerhoff Scholars Program.
Each Federal Reserve Bank must publicly commit to recruiting and hiring research assistants from at least five Historically Black Colleges and Universities (HBCU) across the nation and the Sadie Collective membership annually.
Furthermore, each Bank must develop and publish publicly a robust diversity and inclusion plan that disaggregates the data with respect to race and gender while adequately addressing the dearth of Black/African-American representation within the Federal Reserve System.
The Federal Reserve System, whose 406 economists only includes one Black woman (2019), must commit to interviewing, hiring, and training qualified Black doctoral candidates through a Visiting Scholars Program. The Federal Reserve System should mandate a proportional representation of Black/African-Americans among their economists, researchers, and senior leadership within banks and the Board achieved by 2030.
Establish an equitable and inclusive environment for Black economists at your institution through access to mental health services, funding professional and academic development resources for Black faculty and economists (e.g. DITE), and access to economics research networks that determine professional outcomes (e.g. NBER, IZA, BREAD). Hiring diverse economists is not enough especially when 33% of Black economists report feeling like they have been discriminated against within the field (AEA Climate Survey: Table 2B). Cultivating an inclusive and empowering environment to keep them is where longstanding, structural change occurs.
Incorporate schools of economic thought that are designed to grapple with the current moment into undergraduate and graduate curricula. Making a concerted effort to go beyond mainstream economic thought towards those schools designed to address group-based inequality and other problems at the meso- level will both push the discipline to provide satisfactory answers to our current crises, and train the next generation of economists to address these and future crises with competency and confidence, rather than complacency and confusion. Feminist economics, stratification economics,institutional economics, and political economy all provide perspectives that could move the discipline as a whole forward but are currently understudied by the profession at large.
The American Economic Association must commit to honoring the legacy of Dr. Sadie T.M. Alexander throughout the entire year of 2021 beginning in January in conjunction with the Sadie Collective and Black scholars, by doing the following:
Publish a web page dedicated to Dr. Alexander, her journey through the economics profession, and relevant research related to her legacy on the front-page of the AEA website that is accessible via a tab;
Communicate to the AEA's membership in its entirety regarding the 100th anniversary of Sadie T.M. Alexander receiving her doctorate on June 6th, 2021 and celebrate her anniversary from henceforth; and
Publicly acknowledging the 100th anniversary of the completion of her doctoral studies, on June 6th, 2021, on social media platforms as well as the role that the economics community held in sidelining her contributions; and
Dedicate a separate and recurring session during ASSA Meetings specifically for Black women in economics and related fields to present research and honor the legacy of Black women economists beginning with the 2021 ASSA Meetings.
Here are examples of how individuals and organizations can make a change:
Check-in on your students and Black colleagues. Frankly, the toll of not knowing whether you, your sibling, or father could be the next victim at the hands of police is a heavy one. Ignoring this hefty pain makes it even harder to feel included at an institution that profits off of their labor. Show your genuine concern and interest in their well being by asking in a non-patronizing way. If you don't have Black colleagues or have not established relationships that you feel comfortable checking in on, it is critical that you acknowledge the colleagues that you have consciously or unconsciously excluded from your network. Take this moment to check your biases.
Individuals: Begin by visiting the National Economic Association and the Sadie Collective to learn more about Black economists and social scientists who are currently in the field. Read their work and reach out to them to let them know that you are here as a resource beyond the traumatic events that are occurring this week.
Organizations: Begin drafting up a diversity, equity, and inclusion plan which includes hiring an expert, such as a chief diversity officer, on these specific issues. Simply trusting that your institution is already equipped in being equitable is not enough. We all have blind spots. Diversity, Equity, and Inclusion experts have years of training to help institutions uncover theirs.
Wield your power to encourage a your institution to issue a statement publicly that defines their stance on anti-Black racism.
Encourage your institution's statement is reviewed by a Diversity, Equity, and Inclusion expert before it is released to ensure that it is wise in the language which is used. Note that you will receive pushback, but consider that since the founding of the United States, Black people, specifically African-Americans, have faced resistance from institutions. Use your privilege to move your community closer to equity and fairness. It took two days for non-Black people to destroy Black Wall Street in Tulsa, Oklahoma, which took fifteen years for Black people to build. You are a powerful ally in the advancement of diversity in the profession.
Create an open space for dialogue through employees resources groups / any other mechanisms at the institution to allow open space for dialogue. Do not ask Black colleagues who are grieving at this time to lead this session. Do not expect Black colleagues to have answers to your questions about police brutality and racism, more broadly speaking. Do not ask your Black colleagues to inform you of your discussion points with non-Black colleagues. Give them the option and space to volunteer. If they refuse, respect that decision.
Challenge the homogeneity of citations, assigned readings, and speakers — particularly in courses about race, inequality, economic development, and social welfare. Strive to include a diversity of perspectives that are just as salient, even if they don't appeal to you ideologically. Economists and social scientists such as Dr. Lisa Cook, Dr. Trevon D Logan, Sir Arthur Lewis, Walter Rodney, Dr. Eric Williams, Dr. Rhonda V Sharpe, and many more scholars have written on a wide breadth of economic and social equity issues and can be included in shaping the content of your curriculums and courses. The Journal of Black Political Economy is an excellent resource. There is no excuse for perpetuating the status quo.
Make a concerted effort to recruit, sustain, and retain Black students in Economics and related fields. At the University of Maryland, Dr. Jessica Goldberg has created a program called Promoting Achievement and Diversity and Economics (PADE). This organization provides minority students with tutors, resources, and exposure to Ph.D. programs. It ensures that Black students who are interested in pursuing fields in and related to Economics have a clear understanding of what that entails, and are provided with the proper support. A similar, but unrelated program, has been successful in STEM: The Meyerhoff Scholars, which specifically provides access to funding resources, research opportunities, resource funding, students throughout their educational journey (conferences, tuition, room, and board),
Educate yourself and do not limit your education to this moment. This moment is the culmination of years of racial oppression. Please see below a list of resources to become equipped with how to address these systemic issues:
Required reading (and listening):
News articles on anti-Black racism in economics and related fields
Anti Racism Resources: This document is intended to serve as a resource to white people and parents to deepen their anti-racism work. If you haven't engaged in anti-racism work in the past, start now. Feel free to circulate this document on social media and with your friends, family, and colleagues.
Donate to funds specifically addressing issues of racial injustice:
Stand with Bre: Support Breonna Taylor who was wrongfully killed, by signing this petition
Minnesota Freedom Fund: The Minnesota Freedom Fund pays criminal bail and immigration bond for those who cannot afford to as we seek to end discriminatory, coercive, and oppressive jailing.
NAACP Legal Defense & Education Fund: The NAACP Legal Defense and Educational Fund, Inc. is America's premier legal organization fighting for racial justice.
Unicorn Riot (grassroots news): Support Independent Journalism — Unicorn Riot is a decentralized, educational 501(c)(3) non-profit media organization of artists and journalists. Our work is dedicated to exposing root causes of dynamic social and environmental issues through amplifying stories and exploring sustainable alternatives in today's globalized world.
During this critical time, which side of history will you stand on? Consider endorsing our letter below.
If you agree with our demands, please endorse our letter here.
I want to do a bit more beating up on a NYT piece this morning on breaking ties with China. There is a widely held view in policy circles that the pandemic showed that our extensive economic ties with China are a bad thing. I will ask a simple question, how?
First to get over some obvious points, yes, China has an authoritarian government that does not respect basic human rights. That is true, but what exactly do we hope to do about it? If we cut our imports from China by half or even put a complete embargo on them, do we think it will improve their human rights record?
I suppose we could have more impact if we got most of the rest of the world to go along, but apart from a few puppet states, no one would follow the U.S. in banning trade from China. Everyone knows that the U.S. doesn't give a damn about democracy. Just last year we helped to overthrow a democratically electedgovernment in Bolivia and installed someone who got almost no votes. No one here cared.
So the question is if the U.S. and a few inconsequential puppets stopped buying stuff from China, would it prompt its leadership to show more respect for human rights? Be serious.
Okay, but the pandemic spread from China and this was in part because its government withheld information about the spread of the disease. That's true and what does it have to do with our ties to China. I suppose if we had no trade and travel with China then we would have had to get the pandemic from somewhere else, which seems to be the case.
Alright, so we would have gotten the pandemic here even if we didn't rely on China for anything. But when we were first hit with the pandemic we were short of items like face masks and other protective gear, which we were importing from China.
This is a common gotcha for those arguing the case against China reliance. But this actually shows nothing. We had a shortage of protective gear because we had not stockpiled it and saw a sudden surge in demand. The problem was that we had not stockpiled protective gear, not that it was coming from China. Suppose we made all our protective gear in the good old USA, could our factories suddenly ramp up production by a factor of five or ten? Not on this planet they couldn't. So this argument about reliance on China is an argument about maintaining stockpiles of important medical gear.
What about other items where our supply chain was interrupted because China reduced or stopped production back in January or February? Well, there were some spot shortages of some items, but these were mostly inconveniences. Did people find themselves unable to buy cars, washing machines, iPhones, or anything else during the last five months? (Okay, toilet paper was in short supply, but I don't think we can blame China.) And, for those folks who may have missed it, we also had some factories shut down here.
Janelle Jones and I have a new piece coming out wherein we explain why and how the Federal Reserve should target the Black unemployment rate in setting monetary policy.
The first figure to which we refer is the share of quarters since 1972 (when the Black jobless rate data start) that the unemployment rate for different racial groups has been below CBOs estimate of the "natural rate." Whites enjoyed full employment labor markets almost 60% of that time. The Black rate, conversely, has never fallen below the estimated full employment rate (which I've, for the record, long argued is biased up, meaning these figures are optimistic).
Source: BLS, CBO
The next figure relates to our discussion of who benefits most from tight labor markets. It shows that pre-crisis, the pace of nominal Black median weekly earnings surpassed that of Whites.
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While many recent proposals for reforming capitalism would substantially change the way our economies operate, they do not fundamentally alter the narrative about how market economies should work; nor do they represent a radical departure for economic policy. Most critically, they elide the central challenge we must address: reorganizing production.
CAMBRIDGE – COVID-19 has exacerbated deep fault lines in the global economy, starkly exposing the divisions and inequalities of our current world. It has also multiplied and amplified the voices of those calling for far-reaching reforms. When even the Davos set is issuing calls for a "global reset of capitalism," you know that changes are afoot.
There are some common threads running through the newly proposed policy agendas: To prepare the workforce for new technologies, governments must enhance education and training programs, and integrate them better with labor-market requirements. Social protection and social insurance must be improved, especially for workers in the gig economy and in non-standard work arrangements.
More broadly, the decline in workers' bargaining power in recent decades points to the need for new forms of social dialogue and cooperation between employers and employees. Better-designed progressive taxation must be introduced to address widening income inequality. Anti-monopoly policies must be reinvigorated to ensure greater competition, particularly where social media platforms and new technologies are concerned. Climate change must be tackled head-on. And governments must play a bigger role in fostering new digital and green technologies.
Taken together, these reforms would substantially change the way our economies operate. But they do not fundamentally alter the narrative about how market economies should work; nor do they represent a radical departure for economic policy. Most critically, they elide the central challenge we must address: reorganizing production.
Our core economic problems – poverty, inequality, exclusion, and insecurity – have many roots. But they are reproduced and reinforced on a daily basis in the course of production, as an immediate by-product of firms' decisions about employment, investment, and innovation.
In economist-speak, these decisions are rife with "externalities": they have consequences that spill over to other people, firms, and parts of the economy. Externalities can be positive: think of learning spillovers from research and development, which are well recognized (and form the rationale for tax credits and other public subsidies). Obvious negative externalities are environmental pollution and the effects of greenhouse-gas emissions on the climate.
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Such spillovers also include what could be called "good jobs" externalities. "Good jobs" are those that are relatively stable, pay well enough to underpin a reasonable living standard with some security and savings, ensure safe working conditions, and offer opportunities for career progression. Firms that generate them contribute to the vitality of their communities.
By contrast, a shortage of good jobs often carries high social and political costs: broken families, substance abuse, and crime, as well as declining trust in government, experts, and institutions, partisan polarization, and populist nationalism. There are also clear economic inefficiencies, as productivity-enhancing technologies remain bottled up in a few firms and do not spread, contributing to anemic overall wage growth.
Firms' decisions about how many workers to employ, how much to pay, and how to organize work do not affect only the bottom line. When a company decides to automate its production line or outsource part of its production to another country, the local community suffers long-term damage that is not "internalized" by its managers or shareholders.
The implicit assumption behind much of our current thinking, as well as that of the traditional welfare-state model, is that middle-class "good jobs" will be available to all with adequate skills. From this perspective, the appropriate strategy to foster inclusion is one that combines spending on education and training, a progressive tax and transfer system, and social insurance against idiosyncratic risks such as unemployment, illness, and disability.
But economic insecurity and inequality today are structural problems. Secular trends in technology and globalization are hollowing out the middle of the employment distribution. The result is more bad jobs that do not offer stability, sufficient pay, and career progression, and permanently depressed labor markets outside major metropolitan centers.
Addressing these problems requires a different strategy that tackles the creation of good jobs directly. The onus should be on firms to internalize the economic and social spillovers they cause. Hence, the productive sector must be at the heart of the new strategy.
Put bluntly, we must change what we produce, how we produce it, and who gets a say in these decisions. This requires not just new policies, but also the reconfiguration of existing ones.
Active labor-market policies designed to increase skills and employability should be broadened into partnerships with firms and explicitly target the creation of good jobs. Industrial and regional policies that currently center on tax incentives and investment subsidies must be replaced by customized business services and amenities to facilitate maximum employment creation.
National innovation systems need to be redesigned to orient investments in new technologies in a more employment-friendly direction. And policies to combat climate change, such as the European Green Deal, must be explicitly linked to job creation in lagging communities.
A new economic order requires an explicit quid pro quo between private firms and public authorities. To prosper, firms need a reliable and skilled workforce, good infrastructure, an ecosystem of suppliers and collaborators, easy access to technology, and a sound regime of contracts and property rights. Most of these are provided through public and collective action, which is the government's side of the bargain.
Governments, in turn, need firms to internalize the various externalities their labor, investment, and innovation decisions produce for their communities and societies. And firms must live up to their side of the bargain – not as a matter of corporate social responsibility, but as part of an explicit regulatory and governance framework.
Above all, a new strategy must abandon the traditional separation between pro-growth policies and social policies. Faster economic growth requires disseminating new technologies and productive opportunities among smaller firms and wider segments of the labor force, rather than confining their use to a narrow elite. And better employment prospects reduce inequality and economic insecurity more effectively than fiscal redistribution alone. Simply put, the growth and social agendas are one and the same
