Forget tax credits. They do not stir businesses to hire the jobless or those on welfare.
So what are some workable ways to attack the persistent problem of black unemployment?
Linking schools with businesses and making sure Chicago school graduates are job ready.
Connecting Chicago better with its suburbs so city residents can get to work there.
Integrating the jobless into the jobs system.
And if Washington is shrinking back from much of what it once did, then it can at least enforce anti-discrimination laws.
These are some of the possibilities raised during a roundtable discussion held by the Tribune.
The goal of the gathering was to consider solutions to one of the most intractable labor-force problems: how to bring down black unemployment.
The meeting followed several recent stories by the Tribune on what seems to be a schizophrenic economy.
On one hand, jobs are going begging, and employers are scratching for workers as unemployment in the Chicago-area and Midwest shrinks to record low levels.
At the same time, the chasm between black and white unemployment has widened. As the economy has produced a bumper crop of jobs, many black workers are not reaping the rewards.
They are falling further behind. Their families and their communities are becoming more isolated. And government data show that the racial disparity is wider in Chicago than almost anywhere else.
Taking part in the following roundtable discussion are Gerald Greenwald, chief executive of UAL Corp. and head of the federal commission on Welfare to Work; Marcus Alexis, former chairman of the Chicago Federal Reserve Board and an economist at Northwestern University; Robert Wordlaw, director of the Chicago Jobs Council, an advocacy program for job training and education agencies; and Mike Webb, counselor at the Parental Involvement Project, a program that helps jobless fathers find work in Chicago. They were interviewed by Tribune and CLTV reporters and editors.
Q. As the economy has improved, the gap in the jobless rate between black and white workers has widened in Chicago. With the transition from welfare, how are we going to find jobs, how are businesses going to cope?
Greenwald–Lots of really good people for 40 or 50 years have (been) trying to solve this problem and it hasn’t been solved. And something new has happened in our whole nation. It is that we are going through an experiment of tough love. People are being pushed off of welfare.
That is the sea-level change and it is a dramatic change. This tough love experiment is only going to succeed if there are real and meaningful jobs in the private sector. . . .
Use United Airlines, not as the best model but (as) an example. United has hired across the U.S., in a period of 2 1/2 years 14,500 people who get paid $7 to 10 an hour, roughly. Training time (is) four to seven weeks, and we are certain we have hired a lot of people off welfare.
Three months ago we said let’s not reach out for great big numbers. We’ll start out by not lowering our standards, (and we’ll) hire about 5 percent of the people we are hiring as people . . . coming off welfare.
What have we learned?
Three months, 110 people off welfare. People have said to me you are skimming (the top) and I said I want to skim. I want the first ones to be a success.
I want them to come off welfare and go back and say, “Hey, I have a real job.” And I want the people in our workplace to say, “Hey, they are not strange. They are like us. They can work.” I want to open that emotional door very wide.
What we are worried about has been transportation. The jobs are not where the people live, and people do not have cars that work. So many of our people are taking three buses (for) 1 1/2-hour one-way commutes.
I don’t want United to be the provider of that transportation.
Q. Why can’t you and your fellow airlines in Chicago work out a deal where you provide local transportation?
Greenwald–We can do anything, but if we do it all, we will limit the number of people we can do it for.
Q. Have companies come to you and said let’s share?
Greenwald–Five CEOs of five companies started a partnership five, six months ago–Monsanto, UPS, Sprint, Burger King and United. We formed the Welfare to Work partnership. As of two months ago, there were 100 of us. Our goal is to take it to 1,000 companies in six months.
Wordlaw–What we have heard is one solution. I don’t think there is a silver bullet to welfare-to-work. What we have to come up with here is a series of solutions. The business community has many solutions that they can offer. Their solutions are not always jobs. . . . Welfare-to-work is a process, a continuum.
Q. Will these solutions be self-serving or benevolent? Will they be doing it just because they can get something out of it?
Wordlaw–They can be both. Some of the businesses that we are meeting with are looking for how it is going to impact “my bottom line.” Some businesses are saying, “We are not in the social service business. We are in business to increase profits for our shareholders. . . .”
A large Loop bank has allowed organizations to use space in the bank to do pre-employment job preparation. One company said, “We don’t have any jobs at all, but maybe we get our employees to contribute their clothes to the Bottomless Closet.” This is an organization that provides clothes for women who may not have the office attire they need. What we need business to do is be creative and visionary.
Q. Why can’t the jobs be moved to where the people are?
Greenwald–We are no longer dealing in ones and twos and fives and tens. We are dealing with more than 1 million people getting pushed off of welfare. While there can be some partial solutions in smaller numbers, why can’t the jobs be where the people live? I don’t think that will work. Most of the jobs throughout America are not where the people live.
Alexis–You mean in the inner city?
Greenwald–Correct. We have it in our heads that the unemployment problem and the welfare problem are inner city and African-American. But if you look at the nation, unemployment is not necessarily in the inner city.
A number of us are trying to encourage minority suppliers of ours, saying to them we would feel a lot better if you would hire people coming off of welfare, where you are set up in the inner city. But I repeat, it is small in numbers.
Wordlaw–Here in Chicago, we have large companies that are downsizing every week, and United is an exception. Here in Chicago, a lot of the jobs are still based at the neighborhood levels. We have a lot of small manufacturing companies that are staying in the city. There are some other issues why those jobs may not be getting to people on welfare or available to unemployed men.
One of them could be the whole race issue. A lot of manufacturers in the city or close to the city have made it known that their preference for new employees is for Hispanics because of this perception of lazy, you know, unthinking black males they are afraid of. So, we have some job opportunities but they are not available to some of the population.
So, while it is commendable what United is doing, there are others who are basically not doing anything other than downsizing.
Q. Mike, when men go through your program, are employers saying “We are willing to train you, willing to help get you on your feet?”
Webb–I don’t see employers necessarily willing to train. In fact, we don’t really expect them to. We are associated with a lot of training facilities. I see Uncle Sam in this welfare-to-work situation acting under the assumption that if you lead the horse to water, the water is there and the horse will drink. But the horse doesn’t always drink.
Q. For two decades we have been talking about downsizing, manufacturing leaving the city, and African-Americans unable to find jobs. Why are we constantly hearing the same thing?
Greenwald–I think we are way off here. I think we are forgetting something really important. I don’t know who should get the credit but 12 million additional jobs were created in our country in the last four or five years. The unemployment rate is under 5 percent. Yes, big companies are downsizing, some are creating jobs in China. But the fact remains that there are more jobs in the U.S. today than there were four years ago, than 20 years ago today.
Alexis–Two-thirds of all of the jobs in the industrialized world today have been created in the U.S. You go to France, you go to Germany, and you have double-digit unemployment rates. So, in some respects the U.S. is in a very good situation and can do things other nations are unable to do.
I think our emphasis on welfare is misplaced because unemployment is not just the welfare problem. We’ve got these unemployment rates with welfare in place. And the ratio of black to white unemployment going back until at least the 1970s has been over 2 to 1.
In the 1960s, 90-plus percent of all black men of employment age were available for work. That rate has dropped today to below 70 percent. It has also dropped for white men, but not as precipitously. There has been a change in the nature of work. There are 15 million black people working. If you are taking about 1 million going off of welfare, you are talking about a very small proportion. Welfare is the sizzle, not the steak.
The real problem is that you have a lot of people who are near poor, working poor and who have unstable jobs. . . . The nature of the kind of work available today has worked against the most disadvantaged people. We have also seen a decentralization of jobs. They leave Chicago for Cook County and then they go out into the hinterland.
Q. Many organizations are funding transportation for jobs to the suburbs; why not keep more of this money in Chicago?
Alexis–Undeveloped farm land is so cheap as compared to the city. Even what you may think is a bad neighborhood in the city has relatively expensive land.
Q. If the jobs have moved out to the suburbs, why not find new ways of matching programs in the cities and suburbs?
Wordlaw–Not all of the jobs have moved to the suburbs. The city of Chicago is experiencing growth in its manufacturing jobs. We have to prepare people to perform in those jobs to keep the companies here. Some of those companies stay here because they know if they move to the northwest suburbs they would have to double the salaries.
Q. Why is the black unemployment rate four times higher than for whites in Chicago if the jobs are here?
Wordlaw–Employers have said to some of our members that their preference is not African-American men.
Alexis–And not to hire Chicago high school graduates, because the quality of the graduate is not very good. Employers will tell you, and this is not race based, people will tell you they interview 20 to 30 applicants out of Chicago high schools to find one person they could hire. If they go to the suburbs, they can find one in six or seven interviews.
Q. We have a prominent employer here, what do you think about the education?
Greenwald–Most American companies are fearful of grabbing a rope and continuing to pull to find that it gets wider and deeper. We are inclined to say, “I want to be clear about what we are going to do and I want to continue to hammer on others to do their part.” What we want is to take the responsibility for helping people who haven’t had jobs to come to work at United. . . .
The schools have to deliver a candidate, who knows the elementaries of work. What do we think about education in Chicago?
I will give you a peek into it. It is from a principal who runs a great elementary school in Chicago. She is frightened every time she has to send her graduates to the high school that all of her hard work is going to go down the drain. They go into a big school full of drugs and violence, and short on education.
Q. Several years ago the School-to-Work program began on the assumption that business be a major player. How involved has United Airlines been?
Greenwald–I think we are among the better of companies. We started our own test project–50 at-risk kids, age 10. Every one of them has a mentor. Our promise to them is if you get good grades, we will pay your way through college. We have promised to sign up 2,000 mentors from our employees all over the country for youth.
Wordlaw–As recently as yesterday (June 17), the Chicago public schools presented their overall school-to-work plan. Now, there is supposed to be a systemwide strategy which involves a coordinated curriculum. School-to-work is now being put in place in the school system this fall. There was some demonstration in eight schools this year. It was encouraging to hear the plan, but there has been no plan (up till now).
Alexis–There are examples of programs that work. They skim and I don’t think skimming is a bad word. I think you get the people in who can do the job and be a success and they can fan out and be a multiplier. People see somebody going to work in their neighborhood, buying a car, owning a home. This has tremendous demonstration effects. The way jobs get filled is largely by word of mouth.
Q. Mike, when the men come to your program, do they know where to look for jobs?
Webb–Many of the men do not have a system. They are not in touch with networks that would normally help them.
Q. Is there something the business community should do?
Webb–There is a breakdown. The men don’t have the kinds of resources to get out there. That is how I got this job, a friend told me, “Hey, they have this job, and I went there.”
Q. How do we solve that?
Alexis–We are ignoring something here. There are perceptions on the employer side that mitigate against hiring people who may be employable. You are from the city, you went to a city school, you live in a certain neighborhood–these work against people.
Wordlaw–We have a system that is not responding to the unemployed presently and now you are going to pile on another group. Black unemployment in major urban areas is somewhere around 40 percent. What is supposed to respond to that? Private industry can somewhat. But the real driving force has to be the federal government.
Q. A realistic view would seem to be that we can’t rely on Washington anymore. We have to rely upon what the business communities and local governments can do.
Alexis–Look at the CRA, the Community Reinvestment Act. Several years ago, several banks, major Chicago banks, had applications for mergers denied on the basis of their CRA records. I used to be on the Federal Reserve Bank board of Chicago, and bankers used to tell me they did not lend in the inner city. Then they discovered the South and West Sides. Now, several downtown banks are building big, stand-alone branches because they discovered there is money there. If the government were to actively enforce its anti-discrimination laws just in the financial markets, you would get some businesses starting in these communities.
Q. Is there anything we can do with the tax structure that would help solve this problem?
Greenwald–There is a federal tax credit for hiring people off of welfare. The day we announced our welfare-to-work program at the White House, a bunch of us went around Capitol Hill, and quite a number of senators and representatives asked the question, “Does this help you hire?” I never heard one businessperson say it did. That is a little example to say tax credits from the federal government are an inappropriate way to try to motivate the private sector.
Q. Could the key to building jobs be awarding contracts to black vendors who can hire people in the cities, as the Rev. Jesse Jackson has urged?
Greenwald–Things like what Jesse and others are doing are raising the attention level of companies. For example, I doubt if I would have thought of working with Jesse and his group to create supplier trade fairs in the city.
Q. Are we mistaken in expecting the business community to come forward and solve the problem of black unemployment as they are driven by pressure for higher profits?
Greenwald–I don’t see any difference in 30 years versus today in terms of pressure to profits. There is no one answer. Chicago is one of the better example of a business community, large and small companies, that really care about the city. There are other cities where there has been a sense of abandonment. No, that is the wrong word. The business community goes through the motions, but they don’t care. In Chicago, the business community cares.
Q. What about fathers, how do they get stuck in jobless situations?
Webb–Nobody wants to go to prison or get into the drug trade, but the reality is that it is easy, just easy. It is easy to grow up in an area and get involved in drugs or get involved in activities that get you locked up. The problem is that after you come through the system you have an X on your back when look for employment. That is where we have the most problems, helping men who have been through the prison system to find meaningful employment. We can get them jobs (at) Burger King or McDonald’s, employers who work with us. But there isn’t a lot men can do by working there.
Q. Are you encouraged?
Webb–I fluctuate. Sometimes I am really encouraged. I see men struggle and get a job, and they see hope and it is time to move on. Then I see men who have been working with (us) and we have (been) struggling to find decent employment (for them) and it is discouraging.
