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Financial crisis brutal on middle-class blacks

Zenitha Prince

“A lot of discouraged black workers who have looked month after month for jobs have just given up,” Austin said.

Joblessness is the “tip of a very large iceberg,” Schmitt added.

“Even people who keep their jobs will find wages and benefits under pressure, and they’ll be reluctant to ask their bosses for a raise or an increase in benefits because they’ll be afraid to lose their jobs,” Schmitt said. All of this is “taking place alongside some longstanding problems, like health care cost and coverage, which add additional pressure on families.”

Black-owned firms — a source of employment and revenue for black communities — are also suffering, adding to the bleak forecast.

“The No.1 issue is that financing has all but dried up,” said Wayne Frazier, president of the Maryland/Washington Minority Contractors. “For businesses that do contracting work — not necessarily construction — most of the owners require performance bonds of more than $100,000, and the bonding has dried up, [too].”

In addition, as local, state and federal government agencies freeze spending, fewer contracts are being generated, and competition has grown even stiffer.

“With less work, you’ll have larger, healthier firms who wouldn’t have touched small contracts before competing with smaller minority firms,” Frazier said. “And by virtue of those larger firms being stronger … they can cut prices, bid lower than the minority companies and win the contracts … They’re just gobbling up all the work.”

Frazier, Schmitt and Austin all said they see some promise in President-elect Barack Obama’s plan to jumpstart the economy and create millions of jobs through a sizable investment in infrastructure projects such as fixing roads, bridges, school construction and modernization, as well as investment in greener more efficient energy.

House Speaker Nancy Pelosi, D-Calif., has already pledged the quick passage of an economic stimulus package worth hundreds of billions of dollars that will include those elements.

Austin said such a plan is a good step, but only if it is properly implemented.

“Out of this crisis comes an opportunity,” he said. “If we use the economic stimulus wisely, there is a potential to decrease economic disparity if job creation and investments go to communities that suffer the most economically.

“It’s very important for the public to ask: When we get these jobs, will blacks get their fair share?” Austin added.

Schmitt warned, however, that even if government leaders do everything right, the forecast for African Americans and all Americans will not turn rosy overnight, especially in the labor market, which usually lags behind the rest of the economy.

“It’s going to be a long and tough one. It’s definitely going to get worse before it gets better,” he said. “The economy is a battleship — if you want to turn it, it takes a lot of time and a lot of energy.”

Zenitha Prince is the Washington bureau chief for the Afro-American Newspapers.

(National Newspaper Publishers Association)