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Scholars: Despite Federal Economic Stimulus Package, Blacks and Hispanics Likely to Fare Worse

by Michelle J. Nealy , January 30, 2008

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As talk of recession reached a fever pitch last week, lawmakers scrambled to re-energize a beleaguered economy by approving a $146 billion economic stimulus plan to get tax rebates to workers in May. But some scholars say other measures need to be taken to help minorities, who are being hardest hit by the mortgage meltdown and lack of jobs.

Under an agreement reached by the White House and U.S. House of Representatives leaders, individual taxpayers will get up to $600 in rebates, working couples up to $1,200 and those with children an additional $300 per child. Eligibility for the full check would be capped at $75,000 in adjusted gross income for individuals, $150,000 for couples. Families who make at least $3,000 a year but don’t pay taxes would get $300 rebates.

But Senate Democrats are pushing for more stimulants such as extending unemployment benefits for workers whose benefits have run out, boosting home heating subsidies, raising food stamp benefits and approving money for public works projects.

Those measures may be necessary to better assist low-income Americans as the Bush stimulus package will largely benefit highly skilled and better-paid workers, says Dr. Alberto Davila, chair of the department of economics and finance at the University of Texas, Pan-American.

“In recent times, the earnings of highly-skilled workers have increased relative to those with low skills,” says Davila, adding that the income generated through the stimulus package will likely be disproportionately distributed to highly skilled workers.

The cut in federal interest rates and the proposed stimulus package of rebates are expected to put more money in the pockets of Americans and urge them to spend. But, some experts say people will simply pay down debt instead of purchasing new things. Other economists argue that much of what will be bought will be manufactured goods produced in other nations, thus nothing will be contributed to the U.S. economy.

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