Reaganomics and How it Affected African Americans in the 1980s
My project was on Reaganomics and what this really meant for groups like African Americans. Reaganomics is the economic policy that was implemented by the Reagan Administration with the intention to reduce government spending, reduce capital gains tax and federal income tax, reduce company regulation and lower the money supply in an attempt to lower inflation, lower the unemployment rate, create more jobs, and overall expand the economy. This economic policy by Reagan is also referred to as supply-side economics, free market economics or the other common name of trickle down economics. Critics however call Reaganomics Voodoo economics because it was unclear if there was actual help being made by this for everyone or was Reagan simply helping the rich become richer. This was based on the Laffer curve, which was created by Arthur Laffer who was part of Reagan’s Economic Policy Advisory Board that stated that a tax rate somewhere between thirty to sixty percent would bring in more tax revenue as there would be a larger tax base and people would also have more money in their pockets which would overall expand the economy. This all sounded great, but in reality did not truly work for a majority of Americans. Reagan thought that by lowering taxes and regulations on corporations would allow for them to create jobs and raise wages for workers, but just like the very wealthy families in America they simply kept more of the money to themselves as profit increasing their already enormous wealth and often corporations paid their shareholders part of these profits. Things like the stock market went up very strongly but this did not help average Americans and many African Americans who were excluded from this. As part of lowering government spending, funding for departments like Agriculture, Commerce, Housing and Urban Development, and the department of Labor even though things like military spending went up dramatically. This reduction in funding for Housing and Urban Development would hit African Americans particularly hard as around 56% of African Americans lived in central cities and only around 20% in the suburbs, meaning they would take most of the hit for this action by the Reagan Administration. In addition the average African American family income was $15,432 compared to $27,686 for white families which made it significantly harder for African Americans to thrive, survive and gain financially and economically. Other programs like Food Stamps which disproportionately affected Afrcian American households more were changed and reduced and required all who apply to have to work in the next 30 days which was not very easy considering the economic hardships that were going on at the time. By January of 1990, which marked the end of the Reagan Administration, the African American unemployment rate was 15.2% compared to 6.2% for white americans and in some parts of the country, 50% of African American males between the ages of 16 to 19 were unemployed showing that Reagan’s policies and action were directly targeting African Americans.