THE IMPACT FOR AFRICAN-AMERICAN FAMILIES AND THE ECONOMY

THE AMERICAN JOBS ACT:

THE IMPACT FOR AFRICAN-AMERICAN FAMILIES AND THE ECONOMY

The American Jobs Act reflects a commitment to strengthen the recovery and help increase

access to jobs for all Americans. With unemployment among African-Americans at an

unacceptably high rate of 16.7 percent – and 1.4 million African-Americans out of work for

more than six months – the President believes that inaction is not an option. That’s why the

President is putting out a plan to increase the pace of job creation, and why he is committed to

fighting for Congress to act on this plan. These measures – which will expand opportunities for

the long-term unemployed to reenter the workforce, provide incentives for businesses to hire,

and make investments in revitalizing schools, infrastructure and neighborhoods – will help create

new job opportunities in African-American communities and across the country. For example:

 The extension of unemployment insurance will benefit 1.4 million African-

Americans and their families. At the same time, the President is proposing bipartisan

reforms that will enable that – as these families continue to receive UI benefits – the

program is better tailored to support reemployment for the long-term unemployed.

 Targeted support for the long-term unemployed could help the 1.4 million African-

Americans who have been looking for work for more than six months: To help them

in their search for work, the President is calling for a new tax credit for hiring the longterm

unemployed.

 A commitment to rebuilding and revitalizing communities across the country will

target investments to the communities hardest-hit by the recession. The President’s

investments in infrastructure include a school construction initiative with a significant

commitment to the largest urban school districts, an investment in revitalizing

communities that have been devastated by foreclosures, and a new initiative to expand

infrastructure employment opportunities for minorities, women, and socially and

economically disadvantaged individuals.

 Support for subsidized jobs and summer/year-round jobs for African-American

youth – for whom unemployment is above 30%. In an environment with an

unemployment rate of 32.4% for African-American youths, the President is proposing to

build on successful programs like the TANF Emergency Contingency Fund to create jobs

and provide training for those hardest-hit by the recession.

 An extension and expansion of the payroll tax cut for nearly 20 million African-

American workers. By extending the payroll tax cut for employees next year and

expanding it to cut payroll taxes in half, the President’s plan will help increase the

paychecks of nearly 20 million African-American workers – providing them with more

money to spend in their communities.

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WHAT THE PLAN WILL DO

Tax Cuts to Help African-American Owned Small Businesses Hire and Grow

 Providing Tax Cuts That Will Help Over 100,000 African-American Owned Small

Businesses: The President is proposing tax cuts that will go to every small business

nationwide – including over 100,000 African-American-owned small businesses. These

tax cuts will cut employer payroll taxes in half for these businesses, provide them with an

added bonus for increasing their payroll, and extend 100% expensing provisions that

provide an incentive for investment.

Example: A small business has 40 employees, with an average salary of $40,000 a

year – meaning a total payroll of $1.6 million. The business adds another 20

employees with the same average salary. Under the President’s plan, the business

would receive a $49,600 tax cut on the payroll taxes of its existing employees,

and another $49,600 tax cut due to the new employees.

 Helping African-American-Owned Small Businesses Access Capital and Grow: The

President’s plan includes administrative, regulatory and legislative measures – including

those developed and recommended by the President’s Jobs Council – to help small firms

start and expand. This includes changing the way the government does business with

small firms and working with the SEC to conduct a comprehensive review of securities

regulations from the perspective of these small companies to reduce the regulatory

burdens on small business capital formation in ways that are consistent with investor

protection. In addition, the President is calling for comprehensive patent reform,

increased guarantees for bonds to help small businesses compete for infrastructure

projects and the removal of burdensome withholding requirements that keep capital out

of the hands of job creators.

Putting African-American Workers Back on the Job While Rebuilding and Modernizing

America

 Project Rebuild: Putting People Back to Work Rehabilitating Homes, Businesses and

Communities. The President is proposing to invest $15 billion in a national effort to put

construction workers on the job rehabilitating and refurbishing hundreds of thousands of

vacant and foreclosed homes and businesses. Building on proven approaches to

stabilizing neighborhoods with high concentrations of foreclosures, Project Rebuild will

bring in expertise and capital from the private sector, focus on commercial and residential

property improvements, and expand innovative property solutions like land banks. This

approach will not only create construction jobs but will help reduce blight and crime and

stabilize housing prices in areas hardest hit by the housing crisis.

 Targeted Investments to Modernize Schools Serving Low-Income Students – From

Science Labs and Internet-Ready Classrooms to Renovated Facilities: The President is

proposing a $25 billion investment in school infrastructure that will modernize at least

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35,000 public schools – investments that will create jobs, while improving classrooms

and upgrading our schools to meet 21st century needs. Funds could be used for a range of

emergency repair and renovation projects, greening and energy efficiency upgrades,

asbestos abatement and removal, and modernization efforts to build new science and

computer labs and to upgrade technology in our schools. And they would be targeted at

the lowest-income districts – with 40 percent, or $10 billion, directed towards the 100

largest high-need public school districts. The President is also proposing a $5 billion

investment in modernizing community colleges, bolstering their infrastructure in this

time of need while ensuring their ability to serve future generations of students and

communities.

 Putting Construction Workers Back on the Job By Modernizing Infrastructure – With a

Focus on Expanding Access to These Jobs: In order to jump start critical infrastructure

projects and create hundreds of thousands of jobs, the President’s plan includes $50

billion in immediate investments for highway, highway safety, transit, passenger rail, and

aviation activities – with one fifth of the funding advancing a transformation of how we

finance transportation infrastructure and what we finance. To ensure that the employment

benefits of these projects can be broadly shared, the President’s plan would invest an

additional $50 million in 2012 to enhance employment and job training opportunities for

minorities, women, and socially and economically disadvantaged individuals in

transportation related activities, including construction, contract administration,

inspection, and security. His plan will also invest an additional $10 million in 2012 to

help minority-owned and disadvantaged business enterprises gain better access to

transportation contracts. And it will ensure that infrastructure investments allow for the

hiring of local workers, to maximize economic benefits for communities where projects

are located.

 Preventing Layoffs of Teachers, Cops and Firefighters: The President is proposing to

invest $35 billion to prevent layoffs of up to 280,000 teachers, while supporting the

hiring of tens of thousands more and keeping cops and firefighters on the job. These

funds would help states and localities avoid and reverse layoffs now, requiring that funds

be drawn down quickly. Under the President’s proposal, $30 billion be directed towards

educators and $5 billion would go to the cops and firefighters who keep our communities

safe.

 Tax Credits and Career Readiness Efforts to Support Veterans’ Hiring: The President is

proposing a Returning Heroes Tax Credit of up to $5,600 for hiring unemployed veterans

who have been looking for a job for more than six months, and a Wounded Warriors Tax

Credit of up to $9,600 for hiring unemployed workers with service-connected disabilities

who have been looking for a job for more than six months, while creating a new task

force to maximize career readiness of servicemembers.

Pathways Back to Work for African-Americans Looking for Jobs

 Extending Unemployment Insurance So That 1.4 Million African-Americans Looking For

Work Do Not Lose Their Benefits: In December, the President successfully fought for

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unemployment insurance to be extended. The President has called for a further extension

into 2012 to prevent 1.4 million African-Americans from losing their benefits next year.

 Targeted Support to Help The Long-Term Unemployed Get Back to Work: The recession

pushed long-term unemployment rates to its highest levels since the Great Depression –

with an estimated 1.4 million African-Americans out of work for more than six months.

The President’s plan is targeted directly at helping these Americans get back to work by,

for example:

o Tax Credits for Hiring the Long-Term Unemployed: The President is proposing a

tax credit to provide up to $4,000 for hiring workers who have been looking for a

job for over six months.

o “Bridge to Work” Programs: States will be able to put in place reforms that build

off what works in programs like Georgia Works or Opportunity North Carolina,

while instituting important fixes and reforms that ensure minimum wage and fair

labor protections are being enforced. These approaches permits long-term

unemployed workers to continue receiving UI while they take temporary,

voluntary work or pursue work-based training. The President’s plan requires

compliance with applicable minimum wage and other worker rights laws.

o Wage Insurance: States will be able to use UI to encourage older, long-term

unemployed Americans to return to work in new industries or occupations.

o Startup Assistance: States will have flexibility to help long-term unemployed

workers create their own jobs by starting their own small businesses.

o Other Reemployment Reforms: States will be able to seek waivers from the

Secretary of Labor to implement other innovative reforms to connect the longterm

unemployed to work opportunities.

 Prohibiting Employers from Discriminating Against Unemployed Workers: The

President’s plan calls for legislation that would make it unlawful to refuse to hire

applicants solely because they are unemployed or to include in a job posting a provision

that unemployed persons will not be considered. Members of the Congressional Black

Caucus have also proposed making discrimination against the unemployed illegal, in

response to “widespread reports of job listings that explicitly exclude unemployed

applicants.”

 Investing in Low-Income Youth and Adults: The President is proposing a new Pathways

Back to Work Fund to provide hundreds of thousands of low-income youth and adults

with opportunities to work and to achieve needed training in growth industries. The

Initiative will do three things:

o Support for Summer and Year-Round Jobs for Youth: The Recovery Act provided

over 367,000 summer job opportunities through the public workforce investment

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system to young people in the summers of 2009 and 2010. Such programs not only

provided young people with their first paycheck, but taught them life-long

employment skills. Building on this success, the new Pathways Back to Work Fund

will provide states with support for summer job programs for low-income youth in

2012, and year-round employment for economically disadvantaged young adults.

o Subsidized Employment Opportunities for Low-Income Individuals Who Are

Unemployed: This effort builds off the successful TANF Emergency Contingency

Fund wage subsidy program that supported 260,000 jobs through the recovery.

According to an analysis by the Center on Budget and Policy Priorities (CBPP), this

flexible program allowed States to reduce the cost and risk associated with new

hiring, encouraging private-sector businesses to hire new workers.

o Support for Local Efforts to Implement Promising Work-Based Strategies and to

Provide Training Opportunities: This initiative would support efforts that have good

records of placing low-income adults and youths in jobs quickly. Local officials, in

partnership with local workforce boards, business, community colleges, and other

partners, will be able to apply for funding to support promising strategies designed to

lead to employment in the short-term.

More Money in the Pockets of Every African-American Worker, Supporting Local

Communities

 Cutting the Payroll Tax Next Year — Benefitting Nearly 20 Million African-American

Workers: The President is proposing to extend and expand the payroll tax cut passed last

December, increasing it to 3.1% for 2012. In total, this will help nearly 20 million

African-American workers who pay payroll taxes.

Example: A household with $33,000 in income – near the median for African-

American households nationwide – would typically pay about $2,050 in Social

Security taxes. In 2011, that household would receive a payroll tax cut of $660.

By expanding the payroll tax cut, that household will receive over $1,000.

Fully Paid for As Part of the President’s Long-Term Deficit Reduction Plan

 To ensure that the American Jobs Act is fully paid for, the President will call on the Joint

Committee to come up with additional deficit reduction necessary to pay for the Act and

still meet its deficit target. The President will, in the coming days, release a detailed plan

that will show how we can do that while achieving the additional deficit reduction

necessary to meet the President’s broader goal of stabilizing our debt as a share of the

economy.