Target Black Unemployment with Enterprise Zones

Posted on Mon 09/19/2011 by


By Star Parker

The Congressional Black Caucus is gearing up for its big annual Washington event — its “legislative conference.”

This is the annual shindig where America’s corporations pour in millions to pay for lavish dinners and parties for Black Caucus members to discuss the crises of black poverty and unemployment.

The New York Times reported last year that the event in 2008 cost $3.9 million, with more than $350,000 going to the official decorator.

Amidst the wine and prime rib this year, the focus of discussion will be President Barack Obama’s American Jobs Act.

One of the more vocal members of the Caucus, Maxine Waters, D-Calif., says she’ll be scrutinizing how the act will be “targeting the communities with the hardest unemployment and the most harmed in this economic meltdown.”

When it comes to government borrowing and spending as a way to “create” jobs, the Black Caucus is possibly the last vestige of the triumph of hope over experience.

Or in Einstein’s famous definition of insanity, “doing the same thing over and over again and expecting different results.”

There is certainly good reason to be deeply concerned about employment in black America. Total employment in this community is 17 percent lower now than it was ten years ago.

If Waters and her colleagues manage a sober moment to reflect during their festivities, they should consider a concept that could provide targeted help for their communities, proposed last week by economist Arthur Laffer in the Wall Street Journal.

Laffer revived an idea first championed a quarter century ago by the late New York GOP Rep. Jack Kemp: enterprise zones.

These are geographic areas of high unemployment that would qualify for special tax and regulatory relief to encourage investment and establishment of businesses.

The version Laffer proposes has four key elements that would operate in these areas:

First, no payroll tax on the employee or employer.

Second, suspend federal and state minimum wage.

Third, eliminate regulatory impediments to construction and setting up businesses.
Fourth, profits on businesses operating in these zones would be taxed at one-third the regular rate.

I would add two other elements to Laffer’s proposal.

Dollar for dollar tax credits for all charitable contributions going into these areas. And school vouchers for all children in these areas to attend the school of their choice.

This package, including Laffer’s elements and mine, would bring businesses into areas that badly need enterprise and employment, would get otherwise unemployable black youths into the world of work and responsibility, would channel charitable funds directly to churches and other worthy organizations who understand and work diligently with the horrible problems in these communities, and would give kids an open door to the most crucial step in the process — education.

Needless to say, business-as-usual voices on the black left have wasted no time to dismiss enterprise zones, calling them “regulation-free ghettoes … for corporate exploitation” and places to hire black youth at “cut rate” prices and not pay taxes that would be used “for social-welfare programs that really do improve the lives of America’s poor.”

Really? Name one.

The way they see it, giving an opportunity to work to an otherwise unemployable youth, a victim of the very welfare state culture built by these same individuals, is called exploitation.
What does it take to learn? Nine hundred billion dollars in stimulus spending, and two and a half years later almost 2 million fewer Americans are working.

How about the great green jobs idea? The FBI is checking this out at the recently failed Solyndra, an Obama green jobs poster child, now down the drain along with $500 million in tax payer backed loans.

Any government bureaucrat who could make a smart venture capital investment wouldn’t be a government bureaucrat.

How about the novel idea of bringing freedom to our blighted areas? It’s the one thing we haven’t tried. Contributing Editor Star Parker is an author and president of CURE, Coalition for Urban Renewal and Education. (

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