Any Downturn Likely to Hurt Minorities First
Dina Owens has already spent two weeks without a job this year, the result of a temporary layoff by DaimlerChrysler AG. She doesn’t like how it feels.
Owens, a 32-year-old assembly-line worker at the aging Jefferson North plant in Detroit, is worried about her company’s plans to shut down six Chrysler plants and eliminate 26,000 jobs, most of them this year.
“I’m concerned because I need benefits,” said Owens, who was furloughed from her $20-an-hour job in late January. “I don’t know if I’m vulnerable or not.”
Owens, who is black, has been at Jefferson North for two years.
America’s minority workers were late in getting a piece of the nation’s long economic boom, and some experts say they would be the first hit by a major downturn.
The nation’s unemployment rate climbed a bit to 4.2% in January, but the Bureau of Labor Statistics showed unemployment for blacks was double that rate at 8.4%, and the Hispanic rate was 6%.
“I’m still hopeful that what we’re seeing is a blip and not a full-scale recession,” said Bill Dickens, senior economics fellow at the Brookings Institution in Washington. “[But] if there is a recession, I’m quite convinced that it will hit first and hardest on the least advantaged, as it always has.”
As the U.S. economy steadily improved in the 1990s, many minorities joined the work force in entry-level positions, began to get wage increases and built up debt to buy homes and other property. But because minorities tend to be the last hired, Dickens said, they’re the first fired when times get tough.
Generally, those furthest from the skilled jobs that promise development will be the ones affected. And for minorities without a college degree, Dickens said manufacturing jobs “are way disproportionally the best jobs.”
Owens learned her industrial skills through Focus:HOPE, a program that provides education and job skills to young people in Detroit.
“I came to the plant with some kind of machinist skills and I know I still have to further it,” she said.
Besides manufacturing, minorities are heavily concentrated in service industry jobs, said Pao-Yu Chou, professor of economics at Marygrove College in Detroit.
Chou said those layoffs can be expected to come a bit later than in the manufacturing industry, which announced 65,000 layoffs last month. The automotive sector took the biggest hit, accounting for more than half of those layoffs. And more job cuts are expected.
James Phillips, a black man from Dayton, Ohio, has worked as a solderer at Dayton Thermal Products for five years. The company manufactures automotive heating and air-conditioning systems.
Phillips, 43, was laid off briefly last month, and he fears he will be sent home again because the company is rotating the furloughs. He has started looking for a part-time job.
“I’m very much worried about the future,” said Phillips, who makes $11.50 an hour at Dayton Thermal. “It’s very, very scary right now. Cars are not selling. I’m hitting the streets.”
Phillips and his wife, a schoolteacher, have five children, ages 6 to 18. They own a home and cars. He said he is now worried about mortgage payments.
“What if I don’t get called back? Then the car goes,” he said. “The bills keep coming. The kids need food. They want clothes. My heating bill just doubled. It’s a scary situation.”
Conscious Effort to Keep Diversity
DaimlerChrysler wants to retain its top talent by looking at documented performance and worker skills as it cuts its payroll, but a diverse work force also is important, said Monica Emerson, director of staffing development and diversity for the German-American auto maker.
“We believe that in our recruitment effort that we have cast a very wide net and attained a very capable, diverse talent,” she said. “In making the reduction, we will not erode the gains that we have made in diversity.”
During the economic boom, the tight labor market put an increasing number of welfare recipients to work in jobs paying more than the minimum wage and with health insurance benefits, according to a study released last month by the Public Policy Institute of California.
More than 3,000 employers were surveyed in Los Angeles, Chicago, Cleveland and Milwaukee during 1998 and 1999. In all four cities, the study found that jobs filled by welfare recipients pay an average of $7 per hour and generally provide 40 hours of work each week. Employers were also willing to provide health care coverage in two-thirds of the jobs.
But the welfare-to-work programs could backfire as the economy slows, some economists say.
“I think African Americans are going to have the hardest time because they’re economically the most vulnerable,” said Peter Dreier, professor of politics and public policy at Occidental College in Los Angeles.
Taking welfare recipients with few job skills was a good concept during a strong economy, Dreier said.
But now he fears for them because of the slowing economy and welfare reform under the Clinton administration.
“Now they’re going to be laid off with no welfare or health care safety net,” Dreier said. “So the poor are going to be poorer.”
To combat the vicious cycle, those new to the work force need to get an education, develop valuable job skills and build social connections, he said.
