The Obama Administration's War on Poor Blacks

Judged by today's campaign rhetoric, we now live in a war zone.  Democrats insist that the GOP has declared "war" on women and opened a second front with a "war" on the poor.  Thus far, Republicans have yet to accuse Democrats of war-mongering, but if they choose this option, let me suggest a possibility: the Obama administration's "war" on poor blacks, especially the young.

This is a remarkably stealthy war, and one hardly noticed by Republicans, but the carnage far outshines what Republicans have, allegedly, been inflicting on women and the poor.  The commander-in-chief's strategy is to confer what superficially appears to be a benefit but in practice brings calamity -- killing with kindness to win votes.

An April 2012 Equal Employment Opportunity Commission (EEOC) edict perfectly illustrates this plan.  The EEOC ruled that employers risk violating the 1964 Civil Rights Act by considering the job applicant's past arrest or criminal conviction record, since blacks and Hispanics are more likely than whites or Asians to have run afoul of the law.  The underlying principle is disparate impact -- if a policy disproportionally hurts blacks or Hispanics, it could point to unfair discrimination.  The EEOC recommends "that employers not ask about convictions on job applications and that, if and when they make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity."

Any experienced business person (and I owned and operated a small business for 14 years) knows that this edict invites disaster.  No business can overcome employee criminality without expensive, unproductive measures.  I cannot imagine any job, no matter how humble, that does not require honesty.  Despite my best efforts to hire only honest employees, I encountered customer credit card theft (to buy a car, no less), pilfering inventory, stealing from the till, cutting private discount deals with customers, falsifying time sheets, and even robbing the "honor" cash cup for soft drinks in the break room.

But, these are just minor annoyances compared to what occurs elsewhere.  Try operating an enterprise where employees deal drugs; fence stolen goods; operate a gambling ring; or engage in white-collar crimes such as selling propriety information, padding expense accounts, and embezzlement.  Short of imposing a police state, eliminating such behavior is exceedingly difficult and expensive.  Culprits are typically caught only due to stupidity, greed, or somebody ratting on them rather than business policing.

So how can business legally respond to being forced to ignore past criminality?  Will they, as the EEOC hopes, hire blacks and Hispanics once rejected because of legal run-ins?  I doubt it, given ample escape routes.  One prudent response is to hire fewer employees, especially entry-level ones.  Chains like Walmart are now able to restock their stores with minimal help, and thanks to repeated scanning, little gets "lost," while the janitorial staff consists of a few employees and an expensive floor-cleaning machine.  You can now rent movies at vending machines.  Grocery-baggers are now nearly extinct.  Airlines have reduced thievery by encouraging travelers to carry on their own luggage.  The phrase "jobless recovery" reflects this approach.

Better yet, change labor pools, or even ship jobs overseas.  Modern technology (and overnight shipping) now permits all sort of business to relocate to low-crime states like North Dakota (its April 2012 unemployment rate was 3.0%).  I suspect that state economic development agencies in low-crime states (or cities) are celebrating this EEOC requirement as "good for business."  Jobs can also be subcontracted out to firms under Washington's enforcement radar.  Other "devious" tactics include hiring illegal immigrants, since they will seldom risk being fired; recruiting friends and families of existing squeaky-clean employees; or even hiring older workers more in tune with a work culture that took honesty for granted.  In any case, the beneficiaries are unlikely to be blacks and Hispanics with troubled legal histories.

This hardly ends Obama's "war" against blacks.  In December of 2011, the EEOC brought a disparate impact lawsuit against Stanley Kaplan to stop the firm from using credit histories in its hiring decisions (see here).  The underlying justification was that blacks and Hispanics are more likely to have damaged credit histories, so taking these into account diminished their chances of employment.  According to the EEOC, "[c]redit histories were not compiled to show responsibility. ... They were compiled to show whether or not someone was paying the bills, which is not always the same thing."  The EEOC wanted Kaplan not only to stop this practice, but also to pay salaries and benefits to those who were not hired due to faulty credit histories.

Let me confess: as a business owner, I checked whether prospective employees paid their utility bill on the ground that if they couldn't manage these, they probably would make less-than-perfect employees.  I also worried about such employees stealing to keep the lights on.  The EEOC is wrong: managing one's credit can be a valuable indicator of job-related traits.  Why risk hiring those unable to pay a small water bill?

Again: better to avoid the problem altogether via automation, hiring fewer employees, relocating, and all the rest.  And these two EEOC impositions hardly end the Obama war on poor blacks.  Recall how the Departments of Education and Justice are pressuring schools to discipline students by racial quota, a policy that will surely bring more racial segregation to undermine public schools.  More troubled schools is, of course, just what poor do not blacks need.  Or pressuring colleges to admit more unqualified blacks and Hispanics who will then waste years while accumulating debt.  So much for having a protector in the White House. 

What is disturbing about this "war" is that its harm is self-evident to anybody familiar with business.  These "helpful" policies also teach youngsters that criminality will have no consequences if they can elect a certain kind of president.  Perhaps only an ex-community organizer believes that businesses can be forced to hire iffy employees without fighting back.

Obama's "help" ]demonstrates only that he is "doing something for African-Americans," all the while burnishing his radical credentials by pressuring "racist" businesses.  Rhetoric aside, the Obama administration is engaging in cheap vote-getting stunts that will only harm those who will vote Democratic.  A far superior strategy would be to facilitate firing iffy black employees so that employers might take some risks in hiring them in the first place.  But imagine the outcry if Obama endorsed this more sensible alternative!  Better to sacrifice a few million unemployed for the sake of appearances.

Judged by today's campaign rhetoric, we now live in a war zone.  Democrats insist that the GOP has declared "war" on women and opened a second front with a "war" on the poor.  Thus far, Republicans have yet to accuse Democrats of war-mongering, but if they choose this option, let me suggest a possibility: the Obama administration's "war" on poor blacks, especially the young.

This is a remarkably stealthy war, and one hardly noticed by Republicans, but the carnage far outshines what Republicans have, allegedly, been inflicting on women and the poor.  The commander-in-chief's strategy is to confer what superficially appears to be a benefit but in practice brings calamity -- killing with kindness to win votes.

An April 2012 Equal Employment Opportunity Commission (EEOC) edict perfectly illustrates this plan.  The EEOC ruled that employers risk violating the 1964 Civil Rights Act by considering the job applicant's past arrest or criminal conviction record, since blacks and Hispanics are more likely than whites or Asians to have run afoul of the law.  The underlying principle is disparate impact -- if a policy disproportionally hurts blacks or Hispanics, it could point to unfair discrimination.  The EEOC recommends "that employers not ask about convictions on job applications and that, if and when they make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity."

Any experienced business person (and I owned and operated a small business for 14 years) knows that this edict invites disaster.  No business can overcome employee criminality without expensive, unproductive measures.  I cannot imagine any job, no matter how humble, that does not require honesty.  Despite my best efforts to hire only honest employees, I encountered customer credit card theft (to buy a car, no less), pilfering inventory, stealing from the till, cutting private discount deals with customers, falsifying time sheets, and even robbing the "honor" cash cup for soft drinks in the break room.

But, these are just minor annoyances compared to what occurs elsewhere.  Try operating an enterprise where employees deal drugs; fence stolen goods; operate a gambling ring; or engage in white-collar crimes such as selling propriety information, padding expense accounts, and embezzlement.  Short of imposing a police state, eliminating such behavior is exceedingly difficult and expensive.  Culprits are typically caught only due to stupidity, greed, or somebody ratting on them rather than business policing.

So how can business legally respond to being forced to ignore past criminality?  Will they, as the EEOC hopes, hire blacks and Hispanics once rejected because of legal run-ins?  I doubt it, given ample escape routes.  One prudent response is to hire fewer employees, especially entry-level ones.  Chains like Walmart are now able to restock their stores with minimal help, and thanks to repeated scanning, little gets "lost," while the janitorial staff consists of a few employees and an expensive floor-cleaning machine.  You can now rent movies at vending machines.  Grocery-baggers are now nearly extinct.  Airlines have reduced thievery by encouraging travelers to carry on their own luggage.  The phrase "jobless recovery" reflects this approach.

Better yet, change labor pools, or even ship jobs overseas.  Modern technology (and overnight shipping) now permits all sort of business to relocate to low-crime states like North Dakota (its April 2012 unemployment rate was 3.0%).  I suspect that state economic development agencies in low-crime states (or cities) are celebrating this EEOC requirement as "good for business."  Jobs can also be subcontracted out to firms under Washington's enforcement radar.  Other "devious" tactics include hiring illegal immigrants, since they will seldom risk being fired; recruiting friends and families of existing squeaky-clean employees; or even hiring older workers more in tune with a work culture that took honesty for granted.  In any case, the beneficiaries are unlikely to be blacks and Hispanics with troubled legal histories.

This hardly ends Obama's "war" against blacks.  In December of 2011, the EEOC brought a disparate impact lawsuit against Stanley Kaplan to stop the firm from using credit histories in its hiring decisions (see here).  The underlying justification was that blacks and Hispanics are more likely to have damaged credit histories, so taking these into account diminished their chances of employment.  According to the EEOC, "[c]redit histories were not compiled to show responsibility. ... They were compiled to show whether or not someone was paying the bills, which is not always the same thing."  The EEOC wanted Kaplan not only to stop this practice, but also to pay salaries and benefits to those who were not hired due to faulty credit histories.

Let me confess: as a business owner, I checked whether prospective employees paid their utility bill on the ground that if they couldn't manage these, they probably would make less-than-perfect employees.  I also worried about such employees stealing to keep the lights on.  The EEOC is wrong: managing one's credit can be a valuable indicator of job-related traits.  Why risk hiring those unable to pay a small water bill?

Again: better to avoid the problem altogether via automation, hiring fewer employees, relocating, and all the rest.  And these two EEOC impositions hardly end the Obama war on poor blacks.  Recall how the Departments of Education and Justice are pressuring schools to discipline students by racial quota, a policy that will surely bring more racial segregation to undermine public schools.  More troubled schools is, of course, just what poor do not blacks need.  Or pressuring colleges to admit more unqualified blacks and Hispanics who will then waste years while accumulating debt.  So much for having a protector in the White House. 

What is disturbing about this "war" is that its harm is self-evident to anybody familiar with business.  These "helpful" policies also teach youngsters that criminality will have no consequences if they can elect a certain kind of president.  Perhaps only an ex-community organizer believes that businesses can be forced to hire iffy employees without fighting back.

Obama's "help" ]demonstrates only that he is "doing something for African-Americans," all the while burnishing his radical credentials by pressuring "racist" businesses.  Rhetoric aside, the Obama administration is engaging in cheap vote-getting stunts that will only harm those who will vote Democratic.  A far superior strategy would be to facilitate firing iffy black employees so that employers might take some risks in hiring them in the first place.  But imagine the outcry if Obama endorsed this more sensible alternative!  Better to sacrifice a few million unemployed for the sake of appearances.

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