As the Dow Jones Industrial Average inches upward, there will be a strong temptation--especially from financial news outlets--to equate recovery by shareholders with the recovery of economic security in our country. When the Dow returns to, say, 10,000, we're likely to see "Mission Accomplished" signs going up in a number of media and financial quarters. Undoubtedly some in the administration, too, will begin patting themselves on the back.
That would be a mistake. New research from The Opportunity Agenda shows why the Dow--and even average unemployment rates--cannot be the primary measures of our national economic health. The State of Opportunity in America analyzes government data across a range of sectors--from jobs to education to housing to poverty and beyond--to measure our national progress in fulfilling the promise of Opportunity.
Opportunity is the profoundly American idea that everyone deserves a fair chance to achieve his or her full potential, and that affording that fair chance to everyone is key to our common national prosperity. Opportunity is about national conditions, but viewed in the context of national values like equal treatment, economic security and mobility, a voice in decisions that affect us, and a chance to start over after misfortune or missteps.
This year's State of Opportunity report is particularly revealing, because it looks primarily at economic and social conditions from 2006 to 2007--the year before the current economic recession, which economists say began in December 2007. The report makes clear that our national infrastructure of opportunity was fractured and unequal before the current crisis took hold, and that a meaningful national recovery will require attending to structural reforms as well as short-term job creation. Simply restoring the economy to its 2007 conditions will fall far short of the change we need.
The Dow topped 14,000 in 2007. Yet, in 2007, 11% of full-time, year-round workers lived in poverty. Eighteen percent of U.S children (over 13 million kids) shared that condition, despite a still-humming stock market. Almost as many American kids (17%) experienced "food insecurity," meaning that their eating was disrupted because their families could not afford adequate food. Over 45 million Americans--15 out of every 100--lacked health insurance.
The report also reveals stark inequality of opportunity before the dawn of today's crisis. College educated women, for example, received just 65 cents for every dollar earned by college educated men. Latinos at all educational levels earned just 73% of the white median wage, while African Americans earned 75%. Hispanic women earned just 59 cents of the average dollar in wages earned by all men.
While overall unemployment rates for all men were at 4.7% in 2007, the rate for African-American men was 9.1%. Unemployment rates on some Indian reservations topped 80%. In those communities of color, in other words, unemployment was at Great Depression rates that far exceed today's overall unemployment rate of 8.5%.
These and other trends, in turn, contributed to a major racial gap in assets. For every dollar of "wealth"--meaning assets minus debt--held by whites, Americans of color held only 15 cents.
In short, this research shows that there was a stark and growing opportunity crisis before today's more visible crisis in lending, hiring, and consumer confidence. It spells out in numerical terms what millions of Americans knew from experience; that it won't be enough for the President and Congress to restore our economy to 2007 levels. Instead, securing our nation's future prosperity will require new rules for our 21st century economy, and deliberate investment in opportunity for all.
The President's economic stimulus package and proposed budget are steps in the right direction, because they combine short-term job creation with longer-term investments in education and health care. But more transformative change is needed to set our country on the right course.
An immediate first step is to implement the economic stimulus package--the American Recovery and Reinvestment Act--through the lens of greater and more equal opportunity. As I recently outlined in the Progressive Ideas Network's new book, Thinking Big (as well as in The State of Opportunity report itself), that must include:
*Using an Opportunity Impact Statement to ensure that taxpayer-funded projects such as mass transit, hospitals and schools create greater and more equal opportunities through job creation, affordable housing, health care infrastructure, and economic development.
*Targeting job training and financial literacy programs in low-income communities and communities of color that have been the victims of predatory lending;
*Investing in community health clinics, effective public transportation, and affordable, mixed-income housing; and
*Reinvigorating our nation's equal opportunity infrastructure, including the Justice Department, the Equal Employment Opportunity Commission, and the US Civil Rights Commission--this set of recommendations is important, because the Bush administration largely ignored equal opportunity enforcement and that's part of why these numbers are what they are.
The first hundred days of the Obama Administration have been promising ones for opportunity, including the Ledbetter Equal Pay Act, strides toward universal health care and fixing our broken immigration system, and a visionary stimulus plan and budget. But the next 100 days and beyond must include building the systems and political will necessary to fulfill the promise of opportunity for everyone in our country.