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To Be Equal

Guest Editorials

The State Of Black America—By The Numbers: Part 2, Jobs

The hardest work in the world is being out of work.” —Whitney M. Young, National Urban League President 1961-1971

One of the advantages of my position as the president and CEO of the National Urban League is that I have both the opportunity and platform to speak to so many of our nation’s young people. I was presented with that same opportunity last week as a featured speaker of the Medgar Evers College Global Lecture Series. As I addressed that crowd of future lawyers, IT professionals and perhaps even a president of the National Urban League, it struck me that for a number of these students—our future workforce—they may encounter an America, and a job market, that is hostile to the principles of economic mobility on which our country was founded.

Five years after the widely-accepted end of the global economic downturn commonly known as the Great Recession, America’s economy inches ever closer to full recovery. In fact, the start of 2015 saw the most sustained period of job creation this century. But the dark cloud inside this silver lining is that too many people are still being left behind—particularly in our communities of color, where unemployment remains at a crisis level, even as our economy continues to rebound.

For Blacks and Latinos in America, the economic devastation of the Great Recession is as real today as it was when it began in 2007 and what we’ve found in our newly released 2015 State of Black America® report - “Save our Cities: Education, Jobs + Justice” is a mixed economics bag that reflects a stark tale of two Americas.

The U.S. economy added 295,000 jobs in February of this year. For the first time since 1997, we have seen 12 straight months of private-sector job growth above 200,000 and unemployment is down to 5.5 percent—its lowest rate since May 2008. But despite this encouraging news, the Black unemployment is twice that of white unemployment, wages are stagnant and many working people are not earning enough to make ends meet.

The Equality Index in the State of Black America® report catalogued Black, Hispanic and white unemployment and income inequality in the nation’s largest metropolitan areas. Overall, the Black unemployment rate was at 11.3 percent and the Latino unemployment rate stood at 7.4 percent versus a white unemployment rate of 5.3 percent. Of the 70 cities ranked for Black-white unemployment, almost half (33 cities) had a Black unemployment rate above 15 percent. In seven of those cities we discovered Great Depression era Black unemployment rates of 20 percent or higher.

It is clear that for far too many Blacks and Latinos, our nation’s economic recovery is only something they read or hear about. According to our analysis, America’s comeback is bypassing large swaths of people in Black and Brown neighborhoods—and that is dangerous—not only to those communities, but to our nation. A recovery that leaves millions of its citizens behind will ultimately threaten America’s sustained growth.

In a recent report on jobs and unemployment in the Black community, Economic Policy Institute economist Valerie Wilson said, “Even before the Great Recession, black unemployment has consistently been twice as high as white unemployment. To address this problem, we need to look beyond simply returning to the pre-recession status quo and implement policies aimed at ensuring that everyone who is willing and able to work has a job.” A central focus of the National Urban League is workforce development, and being in the business of creating jobs and proposing solutions to our longstanding challenges, our organization has advanced the following public-policy recommendations:

• Passage of a transportation infrastructure bill with a targeted jobs component.

• Passage a targeted, large-scale summer youth/young adult jobs bill.

• Raising the minimum wage to a living wage.

This week the U.S. Department of Labor will publish the March jobs report. Experts are predicting the numbers will show another strong month of job creation. While we applaud every stride our country makes in resuscitating our once battered economy, we remain vigilant—and concerned—about the disparity of access to these benefits among our nation’s citizens as revealed in the State of Black America® report (for more details and essays from leading figures on the economy, be sure to visit www.stateofblackamerica.org). I am concerned for all Americans, but especially for all the students I meet who live in those communities in crisis and are working so hard in their classrooms now while they dream of a better future.

Marc H. Morial? is president and CEO of the ?National Urban League.


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Is Your Student Enrolled at an Overdraft U?

BY CHARLENE CROWELL

It’s an encouraging sign that an increasing number of students are completing high school and then enrolling in college. That’s a good thing.

But it’s a bad thing when student bank accounts come with abusive overdraft fees and place their financial aid at risk. Dollars intended to pay for textbooks and other course materials should not be stripped away by high-cost fees. Depending upon bank account terms, students could incur over $100 in fees in a single day. For those learning to manage their own finances, these fees could run as high as $700 a year.

New research by the Center for Responsible Lending (CRL) finds that more often than not, students would do better finding their own financial institution of choice, instead of relying on the convenience of a student bank account offered through an exclusive marketing agreement the school has with a given bank.

“What this means is that financial aid dollars are being diverted from educational uses to pay bank fees,” said Leslie Parrish, CRL’s deputy director of research and co-author of the report. “So in a sense, overdraft fees are a loan on a loan – a loan from the bank financed by a student. This is a cycle that’s abusive, that costs young people dearly, and that can easily be remedied by more responsible financial products.”

It’s a clever move by financial institutions always on the lookout for new revenue streams and new customers. Who better to focus on than students, usually away from home for the first time, and equally unaware of potential financial pit falls. Even better, if a banking relationship is formed during collegiate years, the looming hope is that these young adults will become life-long customers.

For colleges and universities, these relationships are often exclusive and come with measurable financial benefits. Some schools receive a share of the revenue generated –as greater numbers of students sign up for these bank accounts, the more money schools receive. Colleges may also receive in-kind benefits from their bank partner, like helping with federal financial aid disbursements.

Can you hear ‘cha-ching’ yet?

Somewhere on campus or beyond, a student is likely enjoying the freedom of being away from home, with the illusion of a financial independence. Overdrafts – with an average cost of $35 per transaction – can also lead to ‘extended overdraft fees’ that put the student even deeper into the red if they cannot repay the overdrawn amount quickly enough.

Fortunately, the growing prevalence of student bank accounts at colleges and universities has caught the attention of the Department of Education (DoE) and the Consumer Financial Protection Bureau (CFPB). The two agencies are deliberating on how to best improve safeguards for students with these types of bank accounts.

DoE is updating an important “Cash Management” rule that will govern how banks market their services to students. New requirements are expected to provide greater consumer protections.

At the same time, CFPB has drafted a “Safe Student Account Scorecard”. Designed to be used by colleges and universities, it is intended to be a guide to negotiating better terms when beginning partnerships with banks. With the March 30 deadline for public input being past, CFPB will move forward towards a final document.

The goal, according to CRL, is swift and effective actions to cease abusive overdraft practices on student bank accounts. CFPB’s banning overdraft fees on student bank accounts would be a strong step forward. Further, as DoE revisits its rules, CRL believes that at a minimum, banks should not be allowed to charge overdraft fees on transactions that otherwise could be declined at no cost to students.

“Schools are failing to take full advantage of their bargaining power to best serve the interests of their students,” said Maura Dundon, CRL senior policy analyst and co-author of the report. “Colleges have a responsibility to ensure the safety of their students – and this should include financial safety as well. Ensuring that the products marketed on campus reflect students’ best interests’ falls well within the scope of that crucial responsibility.”

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.


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Equal Pay Day

BY LINDA D. HALLMAN and SONIA SYNGAL

When Doris and Don Fisher opened their small retail store in 1969, they each put up $21,000 in savings and, without even discussing it, paid each other the same salary. That’s how equal partnerships work.

Today, you know the Fishers’ company as Gap Inc. Following Doris and Don’s lead, the company continues to pay the women and men who work there dollar for dollar for the same day’s work—from sales associate to senior executive and every level in between. This story is especially important now as we mark another Equal Pay Day, the symbolic date when women’s salaries finally catch up to men’s salaries from the previous year.

At state and local levels across the nation, mayors and governors are issuing Equal Pay Day proclamations, while equal pay advocates gather at rallies, press conferences, lobby days, and other events. We all want a world in which our daughters and sons are paid fairly, but today women typically lose out on more than $500,000 in income over the course of their careers due to the pay gap.

In the United States the pay gap has narrowed since the 1970s, largely because of women’s progress in education and workforce participation and because men’s wages have also been rising at a slower rate. But progress has stalled in recent years, and the pay gap doesn’t appear likely to go away on its own. In 2013, women working full time were paid just 78 percent of what men were paid.

At the current rate, it will take more than 100 years until we finally see equal pay.

But not at Gap Inc. A 2014 in-depth compensation analysis by Exponential Talent, followed by a 2015 revalidation, confirms that every day is already Equal Pay Day for Gap Inc.’s workers. By paying people based on the work they do and not their gender, the company communicates to its 140,000 employees—74 percent of whom are women—that it values their contributions.

And now Gap Inc. is encouraging other companies to follow its lead. The simple message that equality matters is critical. Commitment to pay equality should start at the top and be an explicit part of every company’s mission and goals. Yes, it’s the right thing to do—but it’s also good for the bottom line.

A 2015 study, The Simple Truth about The Gender Pay Gap, by the American Association of University Women (AAUW) reports that equal pay isn’t simply a women’s issue—it’s a family issue. Between 1967 and 2012, the percentage of mothers who brought home at least a quarter of their family’s income rose from less than a third (28 percent) to nearly two-thirds (63 percent). Most families depend on women’s wages to make ends meet.

A large majority of mothers are in the paid labor force and are responsible for supporting their families. For the 40 percent of mothers who are their family’s sole or primary breadwinner, the gender pay gap can contribute to poor living conditions, poor nutrition, and fewer opportunities for their children. For these women, closing the gender pay gap is much more than a point of pride—it’s a potentially life-altering change for them and their families.

In today’s society, equal pay should be the price of entry for any business. Companies should know by now that paying workers fairly is not only legally and ethically sound, but financially savvy. Follow the AAUW research and the Gap Inc. model. Put women in leadership at all levels from the beginning.

Be open and honest about how much you value your employees and their contributions, because equal work deserves equal pay.

Linda D. Hallman, CAE, is Executive Director and CEO of AAUW. Sonia Syngal is EVP of Global Supply Chain and Product Operations at Gap Inc.