Things You Will Not Read In The New York Times -- Income Down, Poverty Up For Blacks Under Obama

In an article today appearing in both Town Hall and Real Clear Politics, Larry Elder does a real service in compiling statistics about the economic condition of African Americans in the United States in the age of Obama.

Perhaps you might think that Obama's economic program has been "helping" blacks.  The big "stimulus" of 2009-11; Obamacare with its maze of subsidies for the low income; big increases in welfare and handout programs like TANF, SNAP, EITC, Obamaphones,  Medicaid and SSDI; increased support for labor unions; and so forth.  All these things at least are designed to sound like they are "helping" the poor and the little guy against the rich and/or powerful.  Surely that should mean that the economic position of African Americans would be improved.  Right?

But actually, anybody who understands our economic statistics would immediately realize that additional spending on such programs would harm the measured economic position of the supposed intended beneficiaries.  That's because the economic statistics measure things like "income" and "employment," which are not improved by subsidy and handout programs.  Most of the handout programs do not count at all in measured income; that's certainly true of Obamacare subsidies, Medicaid, Obamaphones, SNAP, and EITC, just for starters.  And then there are the negative incentives that all of these programs provide to keep incomes (or at least visible incomes) low so that the benefits will continue to flow.  Put those factors together and it is almost certain that measured income and employment will decline as the handouts increase.  And that is exactly what we see.

And I'm not saying that the decline in the economic condition of blacks is just an artifact of the statistics.  You could argue about whether the statistics as defined give an accurate picture of economic well-being, and I have certainly done that.  But I would still agree that "income" earned at a job is a fundamentally different thing from a government handout.  Handouts are very restricted and just not worth nearly as much to the recipients as cash from a job.  For example, New York spends some $10,000 per year per Medicaid beneficiary.  I'll bet not one in ten of the "beneficiaries" would take the Medicaid enrollment if given the choice between that and the $10,000 cash.

So with that introduction, here are some of Elder's findings about the changing economic condition of African Americans since 2009:

  • Poverty.  "In 2009, when Obama took office, the black poverty rate was 25.8 percent. As of 2014, according to Pew Research Center, the black poverty rate was 27.2 percent."
  • Income.   "CNNMoney says, 'Minority households' median income fell 9 percent between 2010 and 2013, compared to a drop of only 1 percent for whites.' The Financial Times wrote last October: 'Since 2009, median non-white household income has dropped by almost a 10th to $33,000 a year, according to the U.S. Federal Reserve's survey of consumer finances.'" 
  • Unemployment.  Elder acknowledges that  "[i]n 2009, black unemployment was 12.7 percent, and by 2014, it had fallen to 10.1 percent," but points to a very different story told by labor force participation:   "The drop in labor force participation was sharpest for African Americans, who saw a decline . . . [under Obama] to 60.2 percent."   Another way of looking at this is that if black labor force participation were "normalized" to the overall U.S. rate of about 63%, they would have an unemployment rate of close to 15% today.
  • Home ownership.  "According to Harvard University's Joint Center for Housing Studies, the picture is ugly: 'Homeownership rates have fallen six percentage points among black households -- double that among white households. ... More than 25 percent of mortgage homeowners in both high-poverty and minority neighborhoods were underwater. . . .'" 

So to what extent has the decline in blacks' economic condition been driven by the explosion of government programs intended to "help"?  I'll let you draw your own conclusions, but it is clear that the government programs have indeed exploded.  HHS puts out an annual report called Welfare Indicators and Risk Factors.  The latest one I can find is about a year old from July 2014, and I can't find one for this year yet.  The information in the Report is somewhat dated depending on the category.  A few examples from various sources:  SNAP recipients from 27 million to 46 million; Obamaphone expenditures from $800 million to $2.2 billion; Medicaid expenditures from $375 billion (2009) to $449 billion (2013)(follow link to NHE Tables); SSDI from about $110 billion to about $160 billion (chart at the link); and so forth.