Looking Ahead to 2012

by Ralph Everett, Esq.
originally published in The Washington Informer

Elections are about opportunity. And with so many critical issues hanging in the balance at present, 2012 will be an especially important time for Americans themselves to influence the direction of our country.

With the recovery just beginning to pick up the pace, 2011 was a challenging year for most everyone, regardless of their race, across nearly all economic indicators – jobs, net worth, home values. And while it is true that black unemployment runs almost twice that of the general population – at more than 16 percent – some studies now show that as a direct result of the American Recovery and Reinvestment Act, some 6.9 million Americans were kept above the poverty line, including 1.3 million African Americans.

It is also true that President Obama inherited an economy that was in almost unprecedented free-fall and acted quickly to stop the hemorrhaging and began to rebuild. He has been working to help create the economic conditions for employment growth through efforts to rebuild critical infrastructure and our public education system.

And while current economic conditions point to job creation and economic recovery as the premier issue for the 2012 campaign, the past year has not been devoid of hope and the outlook is not without considerable promise for the African American community.

For example, at the Joint Center for Political and Economic Studies we have been encouraged by our progress in directing greater focus under the new health care law toward addressing longstanding racial disparities in health outcomes and access to health services.

On other fronts, despite all the problems afflicting areas of concentrated poverty, the numbers of young, educated African American adults are growing. A recent Washington Post poll showed that their optimism is on the upswing, with most of them saying they are better off than their parents, and that their children will be better off than they themselves are now.

Further, young African Americans are adopting broadband and mobile Internet technologies at among the highest rates of any group. As the new online technologies continue to revolutionize how people receive information, interact with each other and take part in civic and political dialogue, we are seeing exceptional potential for enabling more people of color to participate and to engage in our civic and political life.

But we need to be mindful that political trends sometimes work at cross-purposes. A report the Joint Center issued recently pointed to a precipitous drop in the number of African American state legislators in the South who serve in the majority party – from more than half to fewer than five percent in just past few years. The result is that black voters and black elected officials in that region have less influence now than at any time since the civil rights era. On top of this, there is a strong move in these and other states to make it more difficult for people to register and vote, either through tougher identification requirements at the polls, shortening of the early voting periods or through restrictions on voter registration drives and other such measures.

Accordingly, 2012 will be a critical year for voting rights and political participation, which should be at the core of our efforts to put America back on track toward ever-expanding opportunity and a better quality of life for all. African Americans in particular need to engage and participate and take full advantage of this precious right that our parents and grandparents fought so vigorously for a half-century ago. Whether you vote Democrat or Republican is not the issue. What matters is that you get to the polls and cast your ballot.

Accordingly, we need a more concerted effort to address the apathy that many of our fellow citizens feel, and to find ways to expand political participation, which is so vital to the successful functioning of our democracy. To help accomplish this, the Joint Center this year established our Civic Engagement and Governance Institute, which will work to improve the quality and quantity of the interaction between citizens and their government, and to provide space for analysis, ideas and dialogue aimed at bringing more people into the process – and ultimately driving the solutions that will improve lives and build futures.

Elections matter. Fully participating in elections and exercising the right to vote matter even more. Nothing less than the American Dream will hang in the balance in 2012.

Ralph Everett, Esq., is the President and CEO of the Joint Center for Political and Economic Studies in Washington, DC. More information on Mr. Everett and his work can be found on the Joint Center website.

How Can Community Colleges Change the Way we Think About Talent?

by Joseph Miller, Esq

Believe it or not, some high school graduates not bound for four-year colleges still want to pursue higher education.  But our system of higher education has other plans in mind for these students.  In the United States, if you don’t attend a four-year college immediately after high school, you essentially become red meat for employers seeking low-wage workers (if you’re fortunate enough to find a job at all) or for-profit colleges whose duty is to the bottom line, whether or not they meet the unique needs of each student.   In too many cases, community colleges have become either a choice of last resort or a choice that has lost so much credibility that many students no longer consider it an option.  Why attend community college for two years, if you can “get the training you need for a job with a future in as little a nine months,” as Everest College heralds on its website?

Raising the standards of community colleges would raise standards across-the-board by forcing for-profits to compete by providing student-centered learning, providing four-year colleges with a more diverse pool of quality applicants seeking additional education beyond the Associates degree, and raising the standards of the American workforce.  In a nation in which people of color are expected to make up more than 50% of the population by 2050, it is critically important to reform higher education in a way that teaches students of varying learning styles the science, technology, engineering and mathematics (STEM) skills they will need to compete in a global economy.

This will require us to shift the way we think about the potential of workers beyond the age of seventeen. By some accounts, age eighty is the new sixty-five for retirement.  Paradoxically, American workers internalize the message that their abilities are written in stone and what they have accomplished from age 0 to 17 will irreversibly determine the next 63 years of their working lives.  This myth provides justification to plutocrats, but is holding the rest of the country back.  It also flies in the face of a growing body of research suggesting that IQs are not fixed at birth, but can be improved with education.

On December 16, the Joint Center for Political and Economic Studies convened a roundtable discussion among education policy stakeholders for a results-driven dialogue to improve community colleges’ ability to educate the next generation of American innovators.  In the keynote, Federal Communications Commission Commissioner Mignon Clyburn urged participants to empathize with individuals who have the potential to excel but not the opportunities. Thomas Kalil, Deputy Director for Policy in the Office of Science and Technology Policy at the White House, stressed President Obama’s goal to move America from the middle to the top of the pack of the world’s most innovative countries.   To do this, the White House has partnered with Change the Equation, the National Academy Foundation, and Skills for America’s Future to improve high schools and community colleges and strengthen ties between community colleges and employers.  The White House has also produced an inventory of STEM programs nationwide through the post-doctoral level.  According to Kalil, over $1 billion of federal investments in STEM are allocated to broaden participation by underrepresented groups.  Kalil acknowledged the critical importance of improving STEM education in early grades, but also said that retaining STEM students by reducing class sizes is important to keep students interested and engaged in STEM. A book entitled “Rising Above the Gathering Storm” summarizes other efforts to improve American competitiveness.

The nation’s challenge to improve STEM education is multifaceted and will not be overcome without significant effort from a variety of stakeholders.  Living conditions play a major role in academic achievement. Thus, any approach to reducing achievement gaps must address the circumstances of poverty and the circumstances of working while attending school.  Several roundtable participants raised other important issues that must not be overlooked.  Ajenai Clemmons, Policy Director of the National Black Caucus of State Legislators and a roundtable participant, urged policy makers to include local elected officials in the discussion. Quentin Lawson, Executive Director of the National Alliance of Black School Educators, another roundtable participant, expressed the need to develop better ways to develop STEM instructors, especially STEM instructors from underrepresented backgrounds.  Linda Rosen of Change the Equation raised the issue that many elementary school teachers think of themselves as generalists, rather than science and mathematics teachers.  John Horrigan, Vice President of Policy Research at TechNet, said that data needs to be made available to the research community in order to understand where the “outliers” are that have been successful and develop initiatives to apply what works.

These issues only skim the surface of the many problems that need to be addressed before we accomplish true STEM reform.  It is only through a persistent and interdisciplinary effort that it will be achieved.  Accordingly, the Joint Center announced the formation of a task force to make specific recommendations to improve STEM education.  This effort must be results-oriented rather than simply another Washington discussion in which people drink coffee, eat cookies and go home.  The future of American innovation depends on creating a culture of lifelong learning that makes fewer reductionist assumptions about students’ intrinsic abilities.

Joseph Miller, Esq. is Deputy Director and Senior Policy Director of the Media and Technology Institute of the Joint Center for Political and Economic Studies in Washington, DC.  More information on Joseph Miller and his work can be found at the Joint Center website.

Mayor Emanuel Must Shed Old Paradigms for True Transparency Reform

by Nicol Turner Lee, Ph.D.

Chicago Mayor Rahm Emanuel is under fire for his office’s denial of Freedom of Information Act requests, with critics in the local and national press and blogs taking the mayor to task for shielding public records from public view. Underscoring this lapse in transparency is Emanuel’s vow to foster “the most open, accountable and transparent government that the City of Chicago has ever seen.” Cities like Boston, Phoenix, and Seattle all routinely release such information, according to reporting by the Chicago Tribune’s David Kidwell, implying that they do transparency better.

This is not to suggest there has been no progress on transparency under Mayor Emanuel. Indeed, he has backed the release of large amounts of government data, including the June release of salary information for all city employees. The city’s September release of city-wide crime statistics for the past decade not only helps crime-fighting agencies, but also journalists, advocates and businesses create more targeted programs to address local concerns.

Chicago, like its big city peers, just needs to decide if government transparency is a core attribute of its government. For the Emanuel Administration, releasing some data and not others does little to shed the old paradigms of closed door politics where waste, government fraud and abuse were the norm.

State and local governments lag severely behind federal government due to fragmented policies and technical systems. Consequently, citizens are deprived of opportunities to participate in the processes and deliberations of local government. This is ironic since our democracy has always been grounded in localism.

Releasing government data is only one way of ensuring effective open government. The White House and federal agencies regularly solicit citizen feedback on pending policy matters and use the Internet to embrace the public’s expertise by encouraging citizens to turn government data into useful online tools and applications. The Recovery.gov website allows residents to track Recovery Act spending and report abuse or fraud. The Data.gov website is regularly updated with data sets provided by federal agencies and showcases citizen-developed apps by winners of contests and other challenges.

As the former architect of President Obama’s open government plans, Mayor Emanuel can go even further by consulting the following recommendations on how to put government content to creative use, as other American cities are doing.

Create opportunities for developing public good applications. New York is a prime example of a city developing public good applications. Mayor Bloomberg recently announced New York’s third application development competition, NYC BigApps 3.0, with over 750 datasets for developers to create web or mobile applications using official city data. The NYC Open Data site includes datasets as varied as maps of city parks and parking facilities, restaurant inspection reports and school attendance and enrollment statistics by district. Public-private-citizen partnerships can generate ideas for meaningful public purpose apps that can improve the quality of life within communities, but that can’t happen if cities don’t open up information to the public in the first place and make data available in standardized formats.

Establish flexible procurement procedures that allow for more off-the-shelf purchasing and easier contracting and promote innovative application solutions. Easing the burden of excessive paperwork and lengthy bureaucratic approvals associated with the purchase of information technology and data management software can strengthen innovation in local governments interested in improving their transparency. In Washington, D.C., the Apps for Democracy program funded the development of apps outside of normal procurement process. Structured as a contest, the innovative program was aimed at developers where mash-up data and software existed alongside traditional procurement processes.

By following just these two recommendations, government services and operations can become more efficient. For example, the city could lower transaction costs for procedures such as business license renewals and property tax payments by using updated, open data tools. Innovative applications geared toward the transit, health care and employment sectors can also minimize harms produced by over-congested roadways, busy emergency waiting rooms and busy job centers.

Tackling open government also helps cities address a more critical issue impacting local economies and quality of life- low broadband adoption rates among our nation’s citizens. Nationwide, two-thirds of households currently subscribe to broadband service. However, only about half of minority and low-income households have adopted this increasingly vital technology. Many non-adopters do not see the Internet’s value. Increasing the availability of resident-focused government content and services at the local level could offer non-users a clear, tangible value proposition for adopting broadband.

Having run for and won office as a reformer, Mayor Emanuel has a broad mandate for making Chicago’s government more transparent and accountable by making a commitment to digital openness that furthers the interests of this great city. Making civic and social data available in standardized formats that lead to the productive public use of public information is something that everyone can agree is a public benefit.

If Mayor Emanuel wishes to foster a more transparent Chicago, he must not only continue the release of city data, but ensure that it is put to creative uses that serve the public.

Nicol Turner-Lee is Vice President and Director, Media and Technology Institute of the Joint Center for Political and Economic Studies in Washington, D.C. More information on Nicol Turner-Lee and her work can be found at the Joint Center website.

In the Interest of Social Security

by Wilhelmina Leigh, Ph.D.

In its deliberations to develop a plan to reduce the federal deficit by more than a trillion dollars over the next decade, the Joint Select Committee on Deficit Reduction considered a proposal to calculate cost-of-living adjustments (COLAs) in all government programs using the “chained” CPI-U (Consumer Price Index-Urban), rather than the CPI-U.  Implementing this proposal would dramatically reduce Social Security benefits for recipients.  Although reducing federal program benefits by changing the COLA computation is indeed one way to reduce the deficit, reducing benefits is not the only way to eliminate the 75-year projected shortfall (of 2.2 percent of taxable payroll) for the Social Security system.  The shortfall can be closed by holding benefit levels harmless and, instead, increasing revenue directed to the system.  A recent report of the Commission to Modernize Social Security (Plan for A New Future: The Impact of Social Security Reform on People of Color) offers recommendations for doing just that.

According to a brief by the National Academy of Social Insurance, over the first ten years after implementation of the chained CPI-U, two-thirds of the deficit reduction achieved would come from cuts in benefits that would be borne by elderly and disabled Americans.  The remaining third would come from revenue increases associated with adjustments to tax brackets and other parameters of the tax code.  After the first decade, deficit reduction due to revenue gains is projected to decrease, while benefit cuts are expected to remain indefinitely.  Reductions in Social Security benefits would be especially problematic for African Americans, among whom benefits (averaging only $1,035 per month for retirees in 2009) are the sole source of income for 40 percent of retiree households ages 65 and older.

The Commission to Modernize Social Security focused on proposals that would both eliminate the projected shortfall and increase benefits for selected vulnerable populations, rather than on proposals that would reduce benefits. Two of the proposals in its report—eliminating the $106,800 cap on wages taxed for Social Security, and extending Social Security coverage to all state and local government employees—would jointly generate enough revenue to eliminate the projected shortfall.  These two proposals along with a gradual increase in the payroll tax rate of one percentage point and taxing contributions to salary reduction plans (such as flexible spending accounts) would generate enough revenue to not only cover the shortfall but also fund benefit increases for the oldest recipients, students, caregivers, and widowed spouses.

It is in the nation’s interest to reduce its deficit.  It is also in the nation’s interest to provide a tune-up to the Social Security system so it will remain solvent over the next 75 years.  Achieving the first goal by reducing the modest benefits that provide a lifeline to so many Social Security recipients of color, however, is not the right way to go.

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.

Wireless Taxes: Extra Cash You Don’t Have in Difficult Times

by Joseph Miller, Esq

“This tax, that tax, what do they all mean?  Well, I guess I have to pay them if I want to keep this phone.”  Sound familiar?

Earlier this month, the House of Representatives passed the Wireless Tax Fairness Act of 2011, which would freeze any increases in state and local taxes on wireless services.  Now that the House has passed its version of the bill, the Senate should follow suit and pass this legislation.  Both chambers should consider passing a similar measure—the Digital Goods and Services Tax Fairness Act of 2011—which would prevent new taxes on digital goods and services.  Digital goods such as apps and e-books do not burden state resources in the same way that physical goods and services do, and so they should not be taxed at the same rate.

Preventing tax increases on wireless services is a small but significant step toward ensuring that broadband remains affordable for low-income consumers who are disproportionately people of color.  Increases to wireless bills that may seem slight to middle-class and upper income consumers can be enough to cause low-income consumers to cancel or forego their wireless service.  For example, a recent paper by Glenn Woroch estimates that adding $4.17 to the average wireless bill of $47.21 would lead to a 7% drop in wireless subscribership levels.

Three of the top 5 states with the highest wireless tax rates are home to large cities with African-American and Latino populations exceeding the national average.  In some states, wireless service taxes are more than twice the sales tax placed upon physical goods.  New York, for example, has the highest wireless service tax rate (17.78%) among states with majority-minority cities.  Contrast this with New York’s state-wide sales tax rate of 8.25%.  Other such states include Florida (wireless service tax: 16.57%/statewide sales tax: 7.25%) and Illinois (wireless service tax: 15.85%/statewide sales tax: 9%).

Congress should prevent increases to state taxes on digital goods and services as well.  The Joint Center for Political and Economic Studies has reported that African-Americans (32%) and Latinos (29%) are more likely than white Americans (23%) to download apps to their cell phones.  Further, according to Nielsen, 45% of Latinos and 33% of African-Americans own smartphones, as compared to 27% of white mobile users.  And what would the apps market be without smartphones?

Smarter devices and services have made quality goods and services more accessible to low-income consumers.  However, a regressive tax mechanism applied to wireless service, digital goods and digital services would further repress this potential utility of mobile broadband.  For example, several online services can assist low-income consumers in buying groceries if they live too far away from well-stocked and more reasonably priced supermarkets.  Previous studies have shown that many low-income, urban neighborhoods are “food deserts” without feasible access to stores with an array of quality produce and meats.  Online services, such as Peapod, deliver quality meats, seafood and produce to consumers beyond the one-mile radius of partnering supermarkets. Last week, Amazon debuted a new service that allows consumers to purchase basic groceries—including coffee, cereal, meat, and seafood—with few geographic restrictions at all.  Thus, while further raising wireless taxes may create a revenue stream to fund other state and local initiatives, the gains from those initiatives will be negated by nudging low-income consumers toward purchasing lower quality goods at higher prices, and thereby exacerbating negative health and economic outcomes.

Comprehensive and equitable tax policies are absolutely critical for creating a mobile broadband environment that is more conducive to improving conditions in low-income communities.

If you are interested in learning more about the effect of excessive state and local taxes on wireless service and digital goods and services, read the Joint Center for Political and Economic Studies’ report released ahead of yesterday’s House vote.

Joseph Miller, Esq. is Deputy Director and Senior Policy Director of the Media and Technology Institute of the Joint Center for Political and Economic Studies in Washington, DC.  More information on Joseph Miller and his work can be found at the Joint Center website.

STEM and the Big Picture: Preparing the Next Generation of Innovators

by Joseph Miller, Esq.

“Do what you love and success will follow.”  That is standard advice in any number of career advice books.  But too few students are inspired to love science, technology, engineering and math (“STEM”), and the students most likely to major in non-STEM fields, are the students who are least able to afford to.  By the same token, we must also ensure the next generation of Americans are able to excel in both STEM and non-STEM fields.

The value of STEM education is clear. Glassdoor, a site that crowdsources data on different companies’ working conditions, reports that the average starting salary for software engineers in Silicon Valley is $98,000.  For Google, the starting rate for software engineers can be upwards of $151,000.  These facts underscore the need to improve STEM education in low-income school districts, which are disproportionately comprised of African-Americans and Hispanics.

But many African-Americans and Hispanics are choosing not to go to college at all or, if they do decide to attend college, choose not to major in STEM fields.  A recent Department of Commerce report shows that, in 2009, just 22 percent of non-Hispanic blacks and 14 percent of Hispanics held bachelor’s degrees, compared to 54 percent of Asians and 35 percent of non-Hispanic whites.  Of these, just 17 percent of black, non-Hispanic and 21 percent of Hispanic college graduates majored in STEM disciplines, compared to 22 percent of white, non-Hispanic graduates and 43 percent of Asian, non-Hispanic graduates.

In his book “In the Plex: How Google Thinks, Works, and Shapes Our Lives,” Steven Levy describes a corporate culture that celebrates quantitative geniuses, while at the same time pushes employees to be creative and inventive.  Levy depicts Google co-founder Sergey Brin as quantitatively brilliant, but as being more interested in taking courses in swimming and gymnastics than in earning a Ph.D. in computer science.  Levy also describes Marissa Mayer, Google’s Vice President of Location and Local Services, who, before entering Stanford University, in addition to being a computer whiz, also excelled at dance.  In his book “A Whole New Mind,” Daniel Pink argues that “[w]e are moving from an economy and a society built on the logical, linear, computerlike capabilities of the Information Age to an economy and a society built on the inventive, empathic, big-picture capabilities of what’s rising in its place, the Conceptual Age.”

But many of the nation’s public schools are not preparing students for innovative settings like Stanford and Google’s. To satisfy No Child Left Behind (NCLB) Act testing benchmarks, many public schools have begun implementing policies that downplay pedagogy and simply “teach to the test.”  These policies have been combined with drastic cuts to arts education.

The National Endowment for the Arts (NEA) reported earlier this year that it is minority students who have been hit hardest by cuts to arts education.   The NEA report revealed that only 26 percent of African-Americans between 18 and 24 reported receiving any arts education during childhood.  This reflects an extremely sharp decline from 51 percent seen in 1982.  For Hispanics, the percentage of respondents who received any arts education during childhood plummeted from 47 percent in 1982 to 28 percent in 2008.  On the other hand, the number of whites reporting that they received arts education dropped only slightly from 59.2 percent in 1982 to 57.9 percent in 2008.

To prepare African-American and Hispanic students for the jobs of the future, we must ensure that all students have the ability to develop well-rounded backgrounds.

Joseph Miller, Esq. is Deputy Director and Senior Policy Director of the Media and Technology Institute of the Joint Center for Political and Economic Studies in Washington, DC.  More information on Joseph Miller and his work can be found at the Joint Center website.

Ask Someone Who Isn’t Working …

by Wilhelmina A. Leigh, Ph.D.

“If you think the system is working, ask someone who isn’t.”  Acting on this bumper-sticker advice by surveying people who are not working reveals not only their anguish and depression about being unemployed, but also their belief that the labor market system, and particularly government employment services, are broken and must be fixed.   The American Jobs Act of 2011, recent legislation developed by the Obama administration, offers ways to fix this system.

Unemployed workers surveyed in both 2008 (Peter D. Hart Research Associates, Inc., for the National Employment Law Project) and 2009 (Knowledge Networks for the John J. Heldrich Center for Workforce Development at Rutgers University) agreed that the public workforce system is broken.  In addition, the system has been found to contribute to longstanding racial/ethnic disparities in the labor market, such as those reflected in the September 2011 unemployment rates among African Americans (16.0 percent), Hispanics (11.3 percent), and whites (8.0 percent). A 2005 Joint Center study entitled A Mixed Record found that the public workforce system had just that kind of record in providing jobs for African Americans and Hispanics.  By every performance measure associated with Workforce Investment Act (WIA) programs (the centerpiece of the public workforce system), adult programs were found to be less successful for blacks and Hispanics than for whites and Asians.  Another study finding—that black and Hispanic WIA adult populations were less likely than whites to receive WIA training services—may help explain these differentials.  The WIA Dislocated Worker program, on the other hand, was equally successful for blacks, Hispanics and whites.

Elements of the American Jobs Act of 2011 could create a more even-handed public workforce system.  The Act explicitly prohibits discrimination by employers and employment agencies on the basis of an individual’s status as unemployed (Title III, Subtitle D, “Fair Employment Opportunity Act of 2011”).  If rigorously enforced, this Act could narrow the persistent unemployment rate gaps between people of color and whites.  Along with the “stick” of prohibiting discrimination on the basis of employment status, another provision (Title III, Subtitle B) would offer a “carrot” to employers to hire the long-term unemployed.  Employers who hire individuals who have been unemployed at least six months would be eligible for a maximum tax credit of $4,000.

Yes, people who are not working think the public workforce system is not working, either.  In addition, people of color who are not working achieve mixed outcomes from this system.  Features of the American Jobs Act of 2011—specifically, its mandate not to discriminate against the unemployed and its incentive to hire the long-term unemployed—could go a long way toward resolving these problems.

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.

This is Inner City…

by Joseph Miller, Esq.

“Don’t take away the music.  It’s the only thing I’ve got.  It’s my piece of the rock.” 

-        From the lyrics of Don’t Take Away the Music by Tavares.

“[T]he market shapes programming to a tremendous extent. Members of minority groups who own licenses might be thought, like other owners, to seek to broadcast programs that will attract and retain audiences, rather than programs that reflect the owner’s tastes and preferences.”

-        From Justice Sandra Day O’Connor’s Dissenting Opinion in Metro Broadcasting Inc. v. FCC, 497 U.S. 547 (1990)

When the walls started shaking at the Joint Center’s offices during last week’s earthquake, I was faced with one question: leave the building or stay inside?  Similarly, the seismic transformation of the broadcasting industry brought on by mobile devices, personal computers, and digital video recorders has presented new problems for broadcasters.  But Black-owned radio stations targeting African-American audiences are faced with their own fight or flight question:  Can they stay profitable by offering black-only programming?  What is the tipping point at which diversifying their programming will begin to alienate their listener base?

Earlier this week, Inner City Media Corporation’s creditors filed an involuntary Chapter 11 bankruptcy petition against it. Inner City Media Corporation is the holding company of Inner City Broadcasting, one of the nation’s leading black-owned broadcasters and owner of WBLS-FM/WLIB-AM in New York City.  Inner City’s creditors claim that it owes some $254 million.

Inner City Broadcasting is rooted in the civil rights movement.  The late Percy Sutton, former attorney to Malcolm X and a former Manhattan Borough President; and Clarence Jones, former publisher of The New York Amsterdam News, one of the oldest black-owned newspapers in the United States, founded the company in 1970.  WBLS has been home to legendary black radio personalities like Hal Jackson, Frankie Crocker, Wendy Williams and DJ Red Alert.  WLIB has changed formats many times over the years, but it too has featured notable personalities including Betty Shabazz, Malcolm X’s widow; and Rev. Al Sharpton.  Inner City owns 15 other stations in San Francisco, CA, Columbia, SC, and Jackson, MS.

Inner City’s failure to repay its debt could be attributed to any number of causes, such as poor financial management.   But saying that poor financial management is the sole culprit, and leaving it there, does little to address the issue of why Inner City’s stations have failed to generate enough revenue to pay the bills.

Let’s take WBLS as an example.

WBLS’ Glass Ceiling

WBLS has hit a glass ceiling.  Barring a complete revamping of its format to include more mainstream content, it appears that WBLS has attained the highest ranking possible with an urban adult contemporary (Urban AC) format in New York.  According to Arbitron, the Urban AC format is the most popular format among African-Americans.  It features music by artists such as Maze Featuring Frankie Beverly, Earth, Wind & Fire Marvin Gaye, R. Kelly, Alicia Keys, Eric Benet, Ne-Yo and Usher.  The “average quarter hour” (AQH) rating of a radio station is the average percentage of a population being measured listening to a radio station for at least five minutes during a 15-minute period.  With a 3.6% AQH overall rating, WBLS is the number one station in New York targeting a predominantly black audience.  It also ranks #8 among all radio stations in the New York metro area.  WLIB, WBLS’ sister station, ranks 34^th, with a .4 AQH rating.

WBLS’ closest competitor, Emmis Communications’ WRKS-FM (98.7 Kiss FM)—the only other Urban AC station in the market—is ranked at a distant #16 overall.  But Kiss is half of Emmis’ combo which includes WQHT-FM (Hot 97), an urban station that skews toward the 18-34 demographic with hip-hop and r&b artists.  Hot 97 posted a 3.3% AQH share in July, placing it at #12 in the overall rankings.  But with the ratings of Kiss and Hot 97 combined, Emmis is actually pulling a 6.2% AQH overall rating, compared to a 4.0 combined rating for Inner City’s WBLS/WLIB combo.

Further, Inner City has been hauled into bankruptcy, while its publically traded counterpart is carrying a similar long-term debt load without repercussions.  The $254 million that Inner City owes to Yucaipa Cos. and others does not appear to be that unusual.  Not taking into account other liabilities, Inner City’s debt-per-station based on the $254 million alone is $14.9 million. At the end of 2Q’11, Emmis held long term debt obligations of $327.2 million.  Spread across Emmis’ 22-station portfolio, its debt-per-station is $14.8 million, just $100, 000 shy of Inner City’s obligation.

Should WBLS Change Formats to Increase Inner City’s Revenue?

Radio stations change formats all the time.  If a particular format is not working, most station owners are generally not averse to abruptly switching formats.  For example, the radio station at 101.9 FM in the New York Metro area, also owned by Emmis, has changed formats four times over the past seven years.  In 2004, the station switched from Smooth Jazz (Kenny G, Sade, Yellowjackets, Anita Baker) to an electronic/ambient music format (Massive Attack, Thievery Corporation).  It switched back to Smooth Jazz in 2005 and, in 2008, flipped to Rock (Kings of Leon, Pearl Jam, Black Crowes, Blink 182).  Finally, on August 12^th of this year, the station changed formats (and owners) yet again, switching to an all-News format.

Inner City is no stranger to programming formats targeting non-African-American audiences.  Among Inner City’s 15 other stations, only 6 target African-Americans specifically.  Inner City’s station portfolio also includes progressive talk, rock, classic rock (Allman Brothers, Rolling Stones, The Beatles, the Yardbirds), oldies (Elvis Presley, The Beach Boys, The Supremes, The Four Seasons, and Sam Cooke), Chinese-language, Vietnamese-language, and two sports talk, ESPN Radio affiliates.

But what is often a business-as-usual decision to change formats carries an additional layer of complexity for black-oriented stations.  As in the case of WBLS, radio stations targeting a predominantly African-American audience are often intimately tied to the very heritage of the communities they serve.  In our communities, having the ability to listen to black music, on radio stations owned by people who look like us, with credible air personalities we can relate to, is often about much more than entertainment.  In an era of high unemployment, mortgage foreclosures, disproportionate incarceration rates, and widening achievement gaps in education, listening to black-oriented radio has a cathartic effect.

WBLS could change formats, but why should it?  Arbitron reports a .5 percent increase in the number of African-Americans who listen to Adult Contemporary radio stations (Eric Clapton, Whitney Houston, Chicago, and Christopher Cross) since Fall of 2009.  It also reports an increase in the number of Blacks who listen to Pop Contemporary Hits (Ke$ha, Lady Gaga, Bruno Mars, Pink, Black Eyed Peas).  But this is far from a death-knell for black radio.  Radio stations targeting mainstream audiences have diversified their playlists, but black-oriented radio stations have not.

Those African-Americans that listen to both black-oriented stations and mainstream stations are signaling a desire for more diverse content.  Their behavior indicates an impulse to seek out contexts that communicate—as Pepper Miller of the Hunter-Miller group describes it—“a universal situation … living parallel to mainstream” rather than isolated in a silo with no mass appeal relevance.  This does not require black-oriented stations to change formats completely.  But what it does require is learning a lot more about black listeners who are less loyal to Urban AC formats, and addressing some of their programming needs.  If Inner City doesn’t do it, someone else will, and it is starting to look more and more like that may very well be the scenario.

Joseph Miller, Esq. is Deputy Director and Senior Policy Director for the Media and Technology Institute for the Joint Center for Political and Economic Studies.

It’s Time to Focus on Poverty and Inequality to improve our National Security and Prosperity

Brian D. Smedley, Ph.D.

Brian D. Smedley, Ph.D.

The U.S. Census Bureau released chilling statistics this week:  nearly one in six Americans is living in poverty.  The number of Americans with incomes below the official poverty line ($22,314 for a family of four) rose by 2.6 million in 2010 to 46.2 million.

The poverty rate in 2010 reached its second-highest point since 1965, median income declined, and the number of Americans without health insurance reached record highs.

Nearly one in 10 children (9.9 percent) fell below half of the poverty line in 2010, up from 9.3 percent in 2009.  Disproportionately, children of color are poor:  over one-third of black children (39.1 percent) and Hispanic children (35.0 percent) are living in poverty.

New research released by the Joint Center for Political and Economic Studies also shows that the number of Americans living in neighborhoods with a high proportion of poor residents is at a record high:  over 22 million Americans live in these neighborhoods, and doing so typically keeps them poor because of their limited access to good schools, good jobs, and good capital.  (link to report:  http://jointcenter.org/research/a-lost-decade-neighborhood-poverty-and-the-urban-crisis-of-the-2000s)

Those living in high-poverty neighborhoods are disproportionately people of color.  And the concentration of people of color in racially- and economically-segregated neighborhoods is a major driver of the health inequalities that many minorities experience relative to whites, which span from the cradle to the grave.  A second report released last week by the Joint Center shows that metropolitan areas with the highest levels of segregation also experience the worst health inequalities, as measured by rates of infant mortality.  Were people of color and whites integrated, over 2,800 black infant deaths could have been averted in  2008.  (link to report:  http://www.jointcenter.org/research/segregated-spaces-risky-places-the-effects-of-racial-segregation-on-health-inequalities)

Clearly, the issue of poverty – and particularly the concentration of people of color in poor neighborhoods – needs more national attention.  Poverty and inequality are arguably a greater threat to our security and prosperity than any outside our nation’s borders.

The good news is that – be seated, now – government can help.

The level of hardship we see now would have been much worse if not for key federal programs such as unemployment insurance, the Earned Income Tax Credit, food stamps, and Medicaid. Without unemployment insurance, for instance, 3.2 million more Americans would have fallen into poverty.  And the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 1.0 million and 2.9 million jobs as of June 2010.

As the deficit-busting “Super Committee” convenes, they should prioritize public sector investments that help people survive the economic downturn.

Dr. Brian D. Smedley is Vice President and Director of the Health Policy Institute of the Joint Center for Political and Economic Studies in Washington, DC.  More information on Dr. Smedley and his work can be found at the Joint Center website.

And What About Tax Expenditures in Deficit Reduction?

by Wilhelmina A. Leigh, Ph.D.

The Budget Control Act of 2011 (P.L. 112-25), signed into law on August 2, 2011, mandates that a Joint Select Committee on Deficit Reduction be constituted (with 12 members of Congress) to identify ways to cut $1.5 trillion from the federal budget over the next 10 fiscal years (2012-2021).  The available options for achieving this goal are reducing spending, increasing taxes, and reducing tax expenditures.  While it is usually straightforward to determine who will bear the brunt of proposals to cut spending or raise taxes, it is more difficult to make this determination with proposals to reduce tax expenditures.

Tax expenditures are the deductions, exemptions, or credits allowed via the U.S. tax code to subsidize certain politically and socially desirable activities.  These expenditures primarily benefit individuals with higher incomes.  However, choosing to reduce the federal budget by paring the most costly tax expenditures is likely to have undesired consequences for lower-income populations and for African Americans and Latinos, two groups who are disproportionately low-income.

The two most costly tax expenditures are the exclusion from taxation of employer contributions for medical insurance premiums and for medical care and the deductibility from individual income of mortgage interest paid on owner-occupied homes.  According to the Office of Management and Budget, between fiscal years 2011 and 2015, these tax expenditures are projected to account for $1.7 trillion in forgone revenue—$1.05 trillion from the exclusion of medical premiums and $0.64 trillion from the deduction of mortgage interest.  

Removing or reducing the tax advantage of employer-sponsored medical insurance could reduce the likelihood that workers have health insurance. According to the Kaiser Commission on Medicaid and the Uninsured, in 2009, two of every five among the 40 million workers with annual income less than $20,000 had employer-sponsored coverage, in contrast to 86 percent of the 60.2 million workers with incomes of $40,000 or more.  Thus, though employers’ responses to changes in this feature of the tax code would affect a greater number of higher-income workers, 16 million low-wage workers could be affected as well.

Limiting the ability to deduct home mortgage interest payments from taxable income could reduce the incentive to own a home, the major form of wealth among U.S. households.  A recent study by the Pew Research Center found that in 2009, among white households, home equity constituted 38 percent of net worth (defined as assets minus liabilities/debts).  Home equity accounted for greater shares of wealth among African American households (56 percent) and Latino households (55 percent), even after accounting for losses due to the Great Recession.  Thus, reducing the incentive to own a home could disproportionately reduce the wealth of African Americans and Latinos.

Like the path to deficit buildup, the path to deficit reduction will be long and winding.  As we embark on this path, we should be alert to the possible consequences of all proposals for persons at lower income levels.

Wilhelmina A. Leigh is Senior Research Associate of the Economic Security Initiative of the Civic Engagement and Governance Institute at the Joint Center for Political and Economic Studies. More information on Dr. Leigh and her work can be found at the Joint Center website.