Recession and Native America

7/30/2019 Recession and Native America

1/33

Challenges to Native American Advancement:

The Recession and Native America

By Dedrick Muhammad

Foreword by Rebecca Adamson, First Peoples Worldwide

Institute for Policy Studies

November, 2009

The Programon Inequalityand theCommon Good


2/33

About the Author

Dedrick Muhammad is the Senior Organizer and Research Associate for the Program on Inequality and the

Common Good at the Institute for Policy Studies. Dedricks special area of focus is the domestic racial wealth

divide, particularly between African Americans and white Americans. He co-founded, with Algernon Austin of theEconomic Policy Institute, the Race and Economy Policy Forum. Dedrick initiated and is a regular contributor to

United for a Fair Economys annual State of The Dream report. He was the sole author for the 2008 report 40

Years Later: The Unrealized American Dream and co-authored with Chuck Collins a chapter in The Inequality

Reader (Dollars and Sense, 2006), and contributed a chapter to Mandate for Change (Lexington Books, 2009).

Dedricks work has been covered by The Nation, Sojourners magazine, Democracy Now!, BET News, C-SPAN,

NPR, the Chicago Tribuneandthe Washington Post. Dedricks most recent piece, The Recession's RacialDivide, was featured in the Sunday New York Times and was co-authored by Barbara Ehrenreich.

Formerly, Dedrick served as the National Field Director for Reverend Al Sharptons National Action Network.

He also was the coordinator for the Racial Wealth Divide Project of United For A Fair Economy.

Research Assistance: Ethan Palmer

Editorial Assistance: Kristi Ceccarrossi, Chris Hartman, and Scott Klinger.

Special Thanks: Peter Morris, Director of Strategy and Partnerships, National Council of American Indians.

Design: TowerStreet.net

The Institute for Policy Studies (IPS-DC.org) strengthens social movements with independent

research, visionary thinking, and links to the grassroots, scholars and elected officials. Since 1963 it

has empowered people to build healthy and democratic societies in communities, the United States,

and the world.

2009 Institute for Policy Studies

Institute for Policy Studies

1112 16th St. NW, Suite 600

Washington, DC 20036

Tel: 202 234-9382

Fax: 202 387-7915

Web: www.ips-dc.org


3/33

Contents

Foreword by Rebecca Adamson, Founder and President, First Peoples Worldwide ..........................................5

Key Findings .............................................................................................................................................................. 6

Policy Recommendations..........................................................................................................................................7

Introduction: Native Americans in the Twenty-first Century............................................................................... 8

1. The Underdevelopment of Native America.........................................................................................................9

2. Strengths and Challenges of Native America

a. Demographics .................................................................................................................................................11

b. Educational Attainment .................................................................................................................................14

c. Health and Health Care..................................................................................................................................16

d. Economic Well-Being on Reservations ..........................................................................................................17

e. Economic Well-Being on and off Tribal Lands .............................................................................................20

3. Broken Promises, Federal Underfunding, and Declining Government Aid..................................................22

4. Gambling on the Future of Native Americans ..................................................................................................24

5. The Recession and Future Prospects .................................................................................................................26

6. Paths to Ending Structural Inequality for Native Americans ..........................................................................28

Conclusion: Returning to Native American Values and Valuing Native Americans .........................................30

Endnotes ...................................................................................................................................................................31


4/33


5/33

5

Foreword

Rebecca Adamson

Founder and President, First Peoples Worldwide

hese are exciting times to be a Native Ameri-

can. The century-old movement for Indian

Self-Determination is now bearing fruit as

Native Americans have increased control over their

assets and can apply Indigenous principles to shape

their economies. Yet, as this report powerfully

documents, glaring disparities persist and muchwork remains to further increase Indian control of

their rich assets, and thereby increase their well-

being and prosperity.

Indigenous Peoples conceive of the term assets

differently from those in the dominant culture. In

addition to the obvious assets of land and money,

Indians count non-tangible assets such as culture,

language, spirituality and kinship networks as im-

portant sources of their wealth. Development,

understood by the dominant culture as an increasein material wealth, is seen by Native Americans to be

a more complex balancing of the array of assets. In

order for development to occur, all assets must be

simultaneously enhanced. Thus, extractive projects,

which remove and sell resources at the expense of

language and culture, do not generally create the

lasting wealth they promise, but more often they

lead to the loss of culture, resulting in social break-

down and persistent material poverty.

This report highlights some of the factors thathave led to the disparities we now widely observe

between Native Americans and their non-Native

neighbors: the appropriation of Indian lands for the

gain of white settlers; the mismanagement by the

Bureau of Indian Affairs of resources found on

Native lands; and the underinvestment by the

federal government in Native American education,

health care and small-business development.

Despite enduring these impediments for half a

millennium, Native Americans are still here, and

many communities are experiencing renewed life. In

most cases, these success stories share a common

characteristic: greater self-determination in the form

of control of their assets.

Native Peoples are amazingly adaptable and

these days Native Americans, Alaska Natives and

Pacific Islanders are responding to the challenges ofunhealthy food systems with businesses aimed at

Native food production, and to the climate crisis

with projects that harness the power of the sun and

wind to produce electricity.

The policy prescriptions outlined herein, from

increasing federal investment in Native education

and health care, to giving tribes a fair shake in

accessing economic recovery funds targeted to states,

will water the seeds of development that Native

Americans have planted all over this land.

T


6/33

6

Key Findings

Despite recent strides, inequality persists. Over the last decade, Native American unemployment rateshave decreased and income levels have risen. Despite these important gains, Native American incomelevels are still only two-thirds that of non-Hispanic white Americans. Likewise, the Native Americanunemployment rate remains double the unemployment rate for the U.S. as a whole.

Native populations are on the rise. The Native American population increased fivefold between 1960and 2000, from about 500,000 to nearly 2.5 million. Between 1990 and 2000, the Native Americanpopulation increased by 25 percent on reservations and by 21 percent off-reservation. Over that sametime period, overall U.S. population increase was 15.6 percent.

Native Americans have similar socioeconomic indicators as other disenfranchised minorities. Blacksand Native Americans share similar median household income, high school graduation rates and a simi-lar decline in poverty rates. Blacks, Latinos, and Native Americans share similar college graduation ratesbetween 10 and 15 percent while about a third of Latinos and Native Americans lack health insurance.

Health care is a growing concern. One-third of Native Americans/Alaskan Natives reportedly have nohealth insurance. Native Americans have the highest per-capita rate of disability among all racial/ethnicgroups; American Indian and Alaska Natives are twice as likely as non-Hispanic white adults to die fromdiabetes and 1.2 times as likely to have heart disease.

Recessions disproportionately hurt Natives. During economic downturns, Native Americans sufferlonger than other groups. In the recession of the early 1980s, Native Americans on reservations saw adecline of real family income that lasted for a decade; unemployment rates for some tribes went as highas 95 percent. In the current recession, industries with a relatively high number of American Indianworkerstimber and construction, to name twohave experienced disproportionately high job losses.

Economic conditions on reservations have declined in step with government support. The decreasein per-capita government expenditures on Native Americans has been dramatic over the last 30 years.This has had a particularly negative impact on Native Americans living on reservations, where real per-capita income correlates with real per-capita government spending.


7/33

7

Policy Recommendations

1. Improve Census data collection. NativeAmericans have been historically undercountedby the Census. As a result, they form a smallstatistical sample and are often relegated to afootnote in Census studies, if they are not ex-cluded altogether. The Bureau of the Censusshould improve its outreach and reform its data-collection methods to get more accurate, com-prehensive, and frequent statistics on NativeAmericans.

2. Increase federal aid. In the 1970s, NativeAmericans saw major socio-economic gainsimprovements that directly corresponded with increases in federal assistance. These gains were reversedbeginning in the 1980s, when federal spending was cut nearly in half.

3. Overhaul the Indian Health Service. One-third of Native Americans/Alaskan Natives reportedlyhave no health insurance. The Indian Health Service, a public program meant to address their needs, isunderfunded. IHS receives $2,000 per capita, considerably lower than the $5,000 per capita spent onthe Veterans Affairs health system and the $6,000 per capita that is spent on Medicare. The IHS allot-ment is even lower than the $4,000 per capita spent on the health care of federal prisoners.

4. Channel federal and state funds through tribal governments. The U.S. Constitution expresslyrecognizes tribal governments in addition to the federal and state governments. Yet tribal governmentsare not considered for the type of federal funding that is routinely sent directly to state and local gov-ernments. Recognition and inclusion of tribal governments in all state and federal funding packagescould increase support for the public initiatives and social services that are managed by tribal govern-ments.

5. Create jobs. The unemployment rate for Native Americans is double the U.S. average. Job-loss andpoverty rates are especially high on reservations. Increased spending for skilled and non-skilled job train-

ing and job-creation programs could address this issue and, at the same time, create local opportunitiesfor college-educated Native Americans who are otherwise forced to leave their communities to findwork.

James Di Loreto, Smithsonian Institution


8/33

8

Introduction:Native Americans in the Twenty-first Century

ative Americans are experiencing growth,

development, and autonomy not seen in

generations. The number of Americans

who identify as single-race Native Americans has

increased fivefold from 500,000 in 1960 to almost

2.5 million in 2000.1 Over that same time period,

the U.S. population grew only 56 percent, from 180

million to 280 million.2 During this time of popula-

tion growth, there has also been a strengthening of

civil and tribal rights and socioeconomic advance-

ment.

Native Americans have made important gains in

cutting poverty rates, unemployment, and increasing

their educational levels. They are also using their

autonomy and wealth to advance the development

of the more than 300 federally recognized tribes.

Tribal lands account for over 4 percent of U.S. land

and it is estimated that this land contains 10 percent

of all the energy resources for the United States.3

With this source of wealth, increased recognition bythe federal government, Indian-led economic devel-

opment, and more direct federal funding to tribes,

there are opportunities to close the chapter of U.S.

history in which Native Americans were exploited

and disenfranchised.

However, Native Americans are making these

advancements within an institutional paradigm of

structural inequality, and there are still great threats

to their progress. Devastating disparities emerge

when we compare the education levels, average

incomes and health statistics of Native Americans

with those of non-Hispanic white Americans. The

situation is most dire for Native Americans living on

reservations, where the per-capita income is only 40

percent of the U.S. average. During this time of

great economic regression for America as a whole,

these challenges threaten to turn back recent Native

American advancement

The purpose of this report is to highlight both

the challenges and the opportunities for Native

American communities in this millennium and to

support federal policy proposals that will sustain

American Indian advancement. Native Americans,

through gains in tribal and civil rights, have estab-

lished themselves as citizens who can demand andwin equal protection and acknowledgement. But

there remains room for progress. During this Native

American Heritage Month, lets have a national

dialogue as to how we as a country are going to

continue and accelerate the socioeconomic develop-

ment of American Indians.

N


9/33

9

1. The Underdevelopment of Native America

One of the most important (and most often ignored) dynamics in the growth of the U.S.economy, since the first European landings, has been the concurrent collapse of Ameri-can Indian economies.

Bruce E. JohansenThe Encyclopedia of Native American Economic History

he modern U.S. economy is based upon the

stripping away of wealthnotably, land and

natural resourcesof Native Americans to

create a foundation for a European-American econ-omy. This legacy is seen in the contemporary

economic disenfranchisement of Native Americans.

When Europeans arrived in the fifteenth cen-

tury, Native Americans enjoyed land and resource

wealth of continental proportions. But as European

contact increased, so did disease. Disease took a

devastating toll upon the American Indian people,

leaving them more vulnerable to military conquest

and the expropriation of Native wealth by Europe-

ans. In the decades following the American

Revolution, the U.S. government subjugated andexploited American Indians with a policy of broken

treaties, ethnic cleansing, forced assimilation, and

ultimately, colonization.

In the nineteenth and twentieth centuries, white

settlers rapidly moved into lands possessed by Native

Americans, sparking conflicts for territory. President

Andrew Jacksons Indian Removal Act of 1830 led

to the forcible expulsion of many Natives living in

the eastern United States along the infamous Trail

of Tears.4 In 1928, with the publication of theMeriam Report, the federal government was urged

to develop more understanding of and sympathy

for the Indian point of view. The Meriam Report

blamed the allotment system, which divided land

belonging to tribes into individual plots in hopes of

turning Indians into civilized landowners and

farmers, for the impoverishment of Indian people.

The attempt to force Native American people into a

European-conceived free market based on private

land ownership further weakened Native American

people. As with previous federal policies, the allot-ment system often ended up giving Indian land to

European settlers and eventually resulted in the

passing of nearly two-thirds of Indian lands90

million to 138 million acresinto non-Indian

ownership between 1887 and 1943.5 Of the 48

million acres left to Native Americans, 20 million

were classified as desert or semi-desert.6

The 1930s and 1940s saw a shift in federal pol-

icy toward formal recognition of tribes, but the U.S.

government continued its policy of overt control.

Instead of allowing Native Americans to makedecisions regarding the land that had been granted

to them by the government, most of the decision-

making power on reservations was explicitly held by

the Secretary of the Interior.7 Then, in the 1950s,

instead of making the decisions for tribes, the federal

government moved to a policy of termination,

that is the termination of recognition, and financial

assistance, for more than 100 tribes. This policy

resulted in the loss of more than 1 million acres of

tribal land.8 The National Urban Indian Family

Coalition reports that almost 200,000 NativeAmericans were removed from their tribal lands to

urban centers as a result of termination.

Historically, the wealth of Native Americans was

held in trust by the federal government, allowing

the Bureau of Indian Affairs to control the manage-

ment of Native resources. This relationship led to

T


10/33

Challenges to Native American Advancement: The Recession and Native America

10

further mismanagement of land, oil, and gas that

once again resulted in the loss of a substantial

amount of wealth for Native Americans. The Ameri-

can Indian community has been left to pick up the

pieces remaining after poor governmental decisionshave take[n] money out of the Native wealth pot

to the tune of an estimated $137 billion in trust

funds generated by leased lands.9

A shift occurred in the 1960s with the Great So-

ciety policies of the Johnson administration. The

War on Poverty not only attempted to reduce the

poverty on reservations that previous policies had

helped create, but it also made steps to reduce

dependence on the federal government in the hope

of creating sustained socioeconomic improvements.As Philip S. Deloris explains, The Great Society

programs were the first major instance in which

Indian tribal governments had money and were not

beholden for it to the Bureau of Indian Affairs. This

created an enormous change in the balance of power

on reservations and Washington.10 Since the late

1960s, Native Americans have moved away from

direct management by the federal government

toward a model of self-governance and self-

determination. This so-called self-determination

era in federal Indian policy coincided with the

struggles of the Civil Rights movement in the 1960s.

Federal recognition of Native American self-

determination culminated in the passage of the

Indian Self-Determination and Educational Assis-

tance Act in 1975. This act permitted tribes to

acquire funding from the federal government thatwould allow them to develop various programs in

health care, education, and housing.11 Tribal

leaders were allowed to draw on their own knowl-

edge of how to best approach problems, and the

effects of this policy continue to reverberate. As Ron

Allen, chairman of the Jamestown SKlallam Tribe

wrote in 2004, We are now capable of meeting our

communities needs more effectively than any other

government. We know our people and are sensitive

to their cultural traditions and realities. Our people

take comfort in knowing that their governmentsnot the state or federal governmentare making

decisions on their behalf.12

Fieldwork and data collected by the Harvard

Project on American Indian Economic Development

echo Allens words. As Miriam Jorgensen and Jona-

than Taylor of the Harvard Project put it, Because

tribes bear the consequences of their governments

decision-making, whereas the Bureau of Indian

Affairs, non-tribal developers, state governments,

and other outsiders do not, tribes that make their

own development decisions do better.


11/33

11

2. Strengths andChallenges of Native America

a. Demographics

From 1960 to 2000, the American Indian

population grew from 0.3 percent of the total U.S.

population to 0.9 percent. The relatively high birth

rate of Native Americans, increased life expectancy,

improved Census outreach, and revisions to Census

policies all contributed to the observed growth in

population.

In 1980, Native Americans had a birth rate of

82.7 per 1,000 women, 33 percent higher than

whites. Between 1980 and 2005, the birth rate of

Native Americans declined but remained higher

than that of the majority white population.13

Between 1990 and 2000, the American Indian

population increased by 25 percent on reservations

and by 21 percent outside of reservations. The

overall increase in the U.S. population during that

Figure 2.1

Source: U.S. Census Bureau.


12/33


12

time was 13.2 percent, with the African American

population increasing by 15.6 percent and the white

population increasing by 5.9 percent.

For the last 40 years, fertility among whiteAmericans has fallen short of the replacement level

of 2.1 children per woman, which, in conjunction

with immigration, has meant that other racial and

ethnic groups have increased their share of the U.S.

population. In the year 2000, the Native American

fertility rate was 2.5 children per woman.

The U.S. Census is the primary source for

demographic information on Native Americans.

Starting in 1960, the U.S. Census allowed people to

self-identify their race. This change corresponds withan increase in the observed Native American popula-

tion, particularly between 1970 and 1980 when the

Red Power movement appears to have encouraged

Americans to reclaim their American Indian iden-

tity. However, the Census has consistently

undercounted minorities. It is estimated that for the1990 Census, American Indians were undercounted

by 4.5 percent and that Native Americans on reser-

vations were undercounted by more than 12

percent. By comparison, the undercount for the U.S.

population as a whole was estimated at 1.6 percent. 14

In 2000, 64 percent of Indians lived outside of

tribal areas or Indian areas.15 Of the Indians who

lived on reservations or in statistical areas, two-thirds

lived in gaming areas and one-third lived outside of

gaming areas.

16

In 2000, there were 310

Figure 2.2



13/33


13

reservations among 561 tribes, meaning that slightly

more than half are connected to reservations.17

The growth of the Native American population

has continued in recent years with an estimated 2.9million Native Americans counted in 2004.18 The

youthful demographic profile of American Indians is

a key contributor to their continued population

growth. The median age of Native Americans, at

29.9 years, is 10 years younger than that of whites

and one year younger than African Americans. Only

Native Hawaiians/Pacific Islanders and Hispanics

have younger median ages.19

As of 2004, the stateswith the highest proportion of single-race Native

Americans were Alaska (12.9 percent), New Mexico

(9.3 percent), and Oklahoma (7.8 percent).20


14/33


14

b. Educational Attainment

Native Americans are making significant gains

in high school graduation rates, with three-quartersof the population age 25 and older holding a high

school diploma in 2000. The figure for all races in

the U.S. stood only five percentage points higher in

that year.

However, Native Americans are only half as

likely as the rest of the population to attain a bache-

lors degree.21 Though Native American college

graduation rates increased between 1990 and 2000

at a slightly higher rate (23.7 percent) than theoverall increase in U.S. college graduation rate (20.2

percent), a more dramatic rise in college graduation

rates must occur for American Indians to bring their

college graduation levels in line with the rest of the

country.

Figure 2.3



15/33


15

Figure 2.4

Source: U.S. Census. Bureau.


16/33


16

c. Health and Health Care

Census data collected between 2004 and 2007

show that other than Hispanics, American Indiansand Alaska Natives were the populations least likely

to have health insurance. Fully one-third reported

having no coverage, based on a two-year average

covering 2006 and 2007. While other racial and

ethnic groups maintained about the same rates of

coverage between 2004 and 2007, the number of

American Indians and Alaska Natives without health

insurance increased by a full 2.6 percentage points.

This statistic is especially troubling because the

fundamental objective of the Indian Health Service

(IHS), a government-sponsored program, is toprovide health services to Native Americans. How-

ever, the service is underfunded and IHS

facilities are, on average, 34 years old, overcrowded,

and equipped with medical and laboratory instru-

ments that may be six or more years out of date. 22

In addition, many Native Americans, particularly

those living outside reservations, have difficultyaccessing the primarily reservation-based IHS facili-

ties. In 1997, only 20 percent of Native Americans

reported having access to the service.23

The lack of health care becomes more critical in

light of Native American health statistics. American

Indians/Alaska Natives have the highest per-capita

rate of disability (22 percent) among all racial and

ethnic groups in the U.S.24 American Indian/Alaska

Native adults were twice as likely as non-Hispanic

white adults to die from diabetes in 2005, 60 per-cent more likely to have a stroke, and 20 percent

more likely to have heart disease.25

Figure 2.5

Source: U.S. Census Bureau


17/33


17

d. Economic Well-Being onReservations

Real per-Capita Income

Reservations are the most impoverished and

economically weak Native American communities.

The real per-capita income on reservations in 2000

was $7,942, far below the $21,587 figure for the

U.S. as a whole. At the rate of increase in real Native

American per-capita income from 1970 to 2000, it

would take around 104 years for Native Americanson reservations to attain a per-capita income equal

to just one halfthat of the average U.S. resident.

Figure 2.6

Source: Joseph B. Taylor and Joseph P. Kalt,American Indians on Reservations: A Databook of Socioeconomic Change between the 1990 and 2000 Census(Harvard Project onAmerican Indian Economic Development, 2005)


18/33


18

Poverty

There was a notable improvement in poverty

rates for American Indians and Alaska Natives living

on reservations and trust lands between 1990 and2000. The percentage of people in this category

living in poverty was nearly cut in half, from 47.3

percent to 28.4 percent. During this time period,

the poverty rate actually increased from 10.0 percent

to 12.4 percent for the rest of the country. However,

despite the progress made by Native Americans

living on reservations, their poverty rate was stillmore than twice the national average.

Figure 2.7



19/33


19

Unemployment

For American Indians and Alaska Natives living

on reservations and trust lands, the 1990s also saw a

drastic decrease in unemployment rates. As withpoverty, unemployment was nearly cut in half for

the group. The total rate of poverty in the United

States for all other racial and ethnic groups, on the

other hand, only dropped slightly from 6.3 percent

to 5.8 percent. The mixed story of relative progress

amid continued inequality holds true for Indian

Country. While the unemployment gap shrunk

significantly for those on Indian lands, AmericanIndians on tribal lands still had an unemployment

rate double that of Americans as a whole.

Figure 2.8



20/33


20

e. Economic Well-Being onand off Tribal Lands

Real Median Household Income

Real median household incomes among Ameri-

can Indians and Alaska Natives in the early twenty-

first century were near the bottom when compared

to other U.S. racial and ethnic groups. The Census

data reflected in the chart is for single-race, self-

identified American Indians and Alaska Natives, and

includes people living on and off reservations. The

data indicate that Native Americans as a group have

lower incomes than most other racial and ethnic

groups; their real median household income is onlyslightly higher than African-Americans, the racial

group with the lowest household income. Overall,

Native American incomes are two-thirds of non-

Hispanic white incomes and just over half of Asian

American incomes.

Figure 2.9

Source: U.S. Census Bureau. Note: Due to small sample sizes, American Indian and Alaska Native totals are based on two-year averages from 2002 to 2003 and 2004 to 2005.


21/33


21

Poverty

Wherever they happen to reside, on tribal lands

or not, Native Americans are still disproportionately

living in poverty. The total Native American popula-tion has experienced poverty at a rate similar to

disenfranchised minority groups such as Latinos and

African Americans. In 2003, more than twice as

many Native American families as white families

with children under 18 lived in poverty.26 In 2007,

the poverty rate for all Native Americans was almost

three times as high as the rate among non-Hispanic

whites.

Using a three-year average of data from 2001 to

2003, the Census found that the Native American

poverty rate was 23.2 percent, compared to the 2003

rate of 8.2 percent for non-Hispanic whites. The

three-year average from 2003 to 2005 for all NativeAmericans increased to 25.3 percent, three times

greater than the rate for non-Hispanic whites.

Despite the progress in reducing poverty that was

made over the last two decades, at the rate of de-

crease in poverty from 1987 to 2007, it would still

take until 2060 for Native Americans to reach the

same poverty rate as the U.S. total.

Figure 2.10



22/33

22

3. Broken Promises, Federal Underfunding,and Declining Government Aid

wo important statistical measurements of

economic activity among Native Ameri-

cansfamily poverty rates and labor force

participation ratesseem to suggest that federal

spending greatly benefited Native communities on

tribal lands in the 1970s. In his study Native

American Economic Development on Selected

Reservations: A Comparative Analysis, David Vinje

compiled data from the 1970, 1980, and 1990

Census reports for the 23 most-heavily-populated

Indian reservations. He found that the family pov-

erty rate among the tribes dropped and the labor

force participation rate increased in the 1970s.

Conversely, the family poverty rate increased and the

labor force participation rate decreased in the 1980s.

The 1980s also saw a decrease in federal expendi-

tures for Native Americans under President Reagans

New Federalism policy.

Promoted as a way of further emphasizing In-

dian self-determination, New Federalism reduced

Figure 3.1

Source: Congressional Research Service, Budget Views and Estimates FY 1975-2000, http://indian.senate.gov/106brfs/crs1.htm.

T


23/33

3. Broken Promises, Federal Underfunding, and Declining Government Aid

23

federal monies available for tribes. Paul Stuart found

that from 1981 to 1988 there was a 5.5 percent

decrease in Direct Program Expenditures from the

Bureau of Indian Affairs, a 34 percent decrease in

Indian Education grants, and a 28.1 percent de-crease in federal job training expenditures.27 Of

course, federal funding cannot wholly explain the

ups and downs of Native Americans socioeconomic

status, but the correlation between deteriorating

economic statistics and cuts in government funding

suggest that federal aid makes an important contri-

bution to bridging the racial wealth divide for

Native peoples living on tribal lands.

From 1975 to 1980, government spending per

capita for Native Americans was nearly double per-capita spending for the United States as a whole. By

1985, under Reagans New Federalism program,

government spending for Native Americans had

been cut to the point where it was roughly at the

same level as per-capita spending for the rest of the

nation. In the years since, spending for Native

Americans has consistently dropped. In 1991, forexample, $3.1 billion was allocated for Native

Americans; nearly 40 percent less than the amount

allocated in 1971.28 This decline in federal aid is

striking on several counts. Since the Native Ameri-

can community is one that lives with, and has been

living with, widespread poverty, one would expect

per-capita government spending to be higher for

these disproportionately disenfranchised communi-

ties than for the U.S. as a whole. Less federal

spending means lower-quality services, which at best

will result in a slow-down of socio-economic pro-gress and, at worst, a reversal of that progress.

Figure 3.2

Source: Congressional Research Service, Budget Views and Estimates FY 1975-2000, http://indian.senate.gov/106brfs/crs1.htm.


24/33

24

4. Gambling on Economic Advancement

n 1988, Congress passed the Indian Gaming

Regulatory Act (IGRA), which permitted gam-

ing on Indian reservations and allowed such

activity to be regulated by the tribes on their respec-

tive lands.29 After years of controversy and conflict

between Native Americans and state and federal

governments, many tribes attained legislative victo-

ries allowing them to open casinos and other gaming

businesses. Not all Indians were affected by the

passage of the landmark bill. In fact, out of the 561

federally recognized tribes in the United States,

slightly less than half of them were participating ingaming as of 2006, according to Michael E. Roberts,

president of the First Nations Development Insti-

tute. Tribes have opted out of gaming for a range of

reasons, from a desire to preserve cultural traditions

to religious objections. The Nanticoke Lenni-Lenape

tribe, for example, provides the following reason for

not permitting gambling on its reservation: In

keeping with the guidance of the almighty Crea-

tor our tribal law requires that the Nanticoke

Lenni-Lenape Indian Tribe shall not own, manage,

operate or sponsor any business which profits from

the promotion of vice30

Figure 4.1

Source: Joseph B. Taylor and Joseph P. Kalt,American Indians on Reservations: A Databook of Socioeconomic Change between the 1990 and 2000 Census(Harvard Project onAmerican Indian Economic Development, 2005).

I


25/33

4. Gambling on Economic Advancement

25

Many of the tribes that engage in gaming oper-

ate only small bingo operations that stand in stark

contrast to the massive casinos located on other

reservations. Even taking into account the larger

casinos, some of which post sizable profits, gamingtribes have not advanced significantly in socioeco-

nomic terms. While gaming has been a source of

jobs and economic development for some tribes, the

Harvard Project on American Indian Economic

Development notes that gaming profits are not

equally distributed across the United States and

cannot hope to meet all of the community needs

across Indian Country.31 Of the 367 tribal gaming

facilities open in 2004, the top 4 percent in terms of

revenue generated more than 37 percent of all

Indian gaming revenue.

32

Former Bureau of Indian Affairs spokesman Rex

Hegler calls this disparity in wealth among gaming

tribes the Pequot principle, referring to the

wealthy Pequot tribe of Connecticut that operates

the Foxwoods casino. Theres about five tribes that

have done very well, but theres [561] tribes in the

country, Hegler says. People that think theres

nothing the tribes need now are confused.33

This disparity is also evident in the fact that,

since the Indian Gaming Regulatory Act was en-acted, the overall wealth of Native Americans has

not increased significantly. Between 1995 and 2005,

total annual gaming revenue on Indian reservations

increased $5.46 billion to $22.63 billion, while real

median household income for Native Americans

increased from $29,800 to $33,627. In other words,for every $4.625 million the gaming industry gener-

ated during those 10 years, real median household

income for Native Americans increased by only $1.

dditionally, the majority of casino jobs go to

non-Indians. According to the National

Indian Gaming Association, of the 670,000

Indian casino jobs that currently exist, non-Indians

hold 75 percent of them. That means that casinos

only have a direct impact, in terms of providing jobs

to Native Americans, on roughly 167,500 Indians,or 3.7 percent of the total number of American

Indians and Alaska Natives, including those who

identify as Indian and another racial category.34

Although members of gaming tribes were living

in better socio-economic conditions relative to non-

gaming tribes at the end of the 1990s, the first full

decade in which Indian gaming existed on a large

scale, they also began the decade in better condi-

tions. For several different social and economic

indicators, non-gaming tribes actually made more

significant socio-economic strides from 1990 to2000 than gaming tribes.


26/33

26

5. The Recession and Future Prospects

s with all people in the United States, the

current economic recession has presented

great challenges to Native Americans. Even

tribes with lucrative gaming operations have been hit

hard. Jacqueline Johnson Pata, executive director of

the National Congress of American Indians (NCAI),

noted in February 2009 that in this particular

recession were seeing, there is a downturn in most

gaming operations.Only those that are really

strategically located fare very well. But even [in]

those places, youll see massive layoffs as theyre

dealing with the economic downturn.35 The Mohe-gan Sun Casino in Connecticut, for example, saw

steady growth is every year since it opened in 1996,

until its slot-machine revenues dropped in 2008. To

respond to the slowdown, the casino cut the salaries

of all 9,800 employees.36 The largest Indian gaming

operations with casinos located in metropolitan areas

have been affected significantly with decreases in

revenue near 10 percent.37

Historically, Native Americans suffer more and

for longer periods of time during recessions than do

other ethnic groups. Native Americans relatively

weak economic position in the U.S. economy makesthem even more vulnerable to economic downturns.

Figure 5.1

Source: Joseph B. Taylor and Joseph P. Kalt,American Indians on Reservations: A Databook of Socioeconomic Change between the 1990 and 2000 Census(Harvard Project onAmerican Indian Economic Development, 2005).


27/33

5. The Recession and Future Prospects

27

During the recession of the early 1980s, Native

Americans on reservations saw a decline of real

family income that lasted for a decade. Alvin M.

Josephy notes in his book Now That the Buffalos

Gone that reservation unemployment, increasedfurther by the economic recession that began in

1981, rose abruptly from an average of about 35

percent to as high as 85, and even 95, percent

among some tribes.

As Robert Gregory and others point out, the

1980s saw the deterioration of the labor market for

low-skilled, low-paid men, a category in which many

Native American men find themselves.38 These

conditions, coupled with a fairly significant decrease

in federal income support for Native communities,resulted in the overall decrease in real per capita

income between 1980 and 1990, as shown in Figure

5.1. The recession of the early 1980s was less severe

than the current recession and should serve as a

reminder of the strong negative impact recessions

have on the Native American community and how

quickly hard-won socioeconomic gains can be

reversed.

Due to the poor statistical tracking of the Native

population, it is difficult to quantify how they are

doing nationwide during the current recession, but

all indications point to a disproportionately negative

impact on Native Americans. Outside of gaming,

other sectors of the economy important to Native

American communities have seen devastating losses

in recent years. In particular, the timber industry hascollapsed due to the housing crisis.

ante Desiderio of the NCAI notes that

tribes that rely on [the timber] industry

through sustainable forestryhave had to

lay off employees and tribal members who rely on

that income.39 The losses felt by the construction

business have hurt Native Americans across the

country. Based on the Census three-year average

from 2005 to 2007, Natives are predominately

employed in the construction, extraction, mainte-nance, and repair sectors, with a full one-fourth of

single-race male Indian workers working in these

fields. These industries also comprise a substantial

proportion of American Indian businesses. In 2002,

nearly 3 in 10 American-Indian-owned businesses

were in these sectors, and 41 percent ($11 billion) of

Native American owned business revenue came from

construction and retail trade.40 As with the timber

industry, the construction industry has been hurt by

the precipitous decline in housing markets that

started the recession we are currently facing.

D


28/33

28

6. Paths to Ending StructuralInequality for Native Americans

n order to improve the socio-economic condi-

tions of Native Americans, several policy

proposals should be implemented. The simplest

of all measures would be to reform Census data

collection practices to better count Native Ameri-

cans in national statistics. Far too often, Native

American data is excluded from Census studies

because the group is considered to be of an insuffi-

cient sample size. While this is understandable due

to the relatively small number of Natives living in

the U.S., it greatly limits the ability of researchers to

compare the socioeconomic conditions of Indians to

those of other communities. When Census data

show statistics for Blacks and Hispanics, readers are

likely to forget that Native Americans are another

American community that is disproportionately

disenfranchised. Oftentimes, a small footnote is the

only mention of Native Americans in Census re-

ports. The Census Bureau should increase outreach

to Native households to increase data collection and

create an accurate analysis of Native Americans thatcan be published alongside data for other minorities.

The Bureau of Labor Statistics must also include on-

reservation unemployment rates so that the em-

ployment status of all citizens of the nation is more

accurately reflected in the monthly unemployment

numbers.

Increased federal spending for Native Ameri-

can communities is another essential pathway to

improved socioeconomic conditions for the group.

As David Vinje found in his study of the 23 largestIndian reservations in the United States, the

1970sa decade marked by substantial federal

assistance and increased self-determination practices

by Native Americanswas a time of major socio-

economic gains. On the other hand, the 1980s, a

period in which federal spending for Native Ameri-

cans was cut significantly, produced a general

decline of socioeconomic conditions for these 23

tribes. The government has already recognized that

it is not meeting its responsibilities to Native Ameri-

cans. In a July 2003 report, the U.S. Commission

on Civil Rights declared, Swift and decisive action

oriented to fulfilling existing federal responsibility

must be taken. Clearly, Native Americans will

achieve greater political empowerment and more

influence in the political process when the federal

government meets its financial obligations to

them.41 Adequate federal investment in conjunction

with support for self-determination policies can

empower Native American communities to help

themselves.

Another federal policy that would go a long way

toward improving socioeconomic conditions for

Native Americans would be to improve the Indian

Health Service (IHS). The IHS provides health care

services to 1.8 million tribal citizens and has an

annual budget of approximately $3 billion.42 How-ever, as noted previously, IHS facilities are for the

most part underfunded and difficult to access. Even

Health and Human Services Secretary Kathleen

Sebelius has referred to the IHS as an historic

failure.43 And while the 2000 Census found that

many Native Americans live in urban areas, far from

reservations, only 1 percent of the IHS budget is

dedicated to urban Indian health programs.44

Increased federal spending for the IHS, explicitly

granted for the purpose of building new facilities

away from reservations, could help begin to improvehealth care for Natives. In 2003, per-capita expendi-

tures for other federal health care programs far

exceeded spending for the IHS. Medicare spent

around $6,000 per capita, and the Veterans Affairs

health system spent over $5,000 per capita. Even

federal prisoners received health care services worth,

I


29/33

6. Paths to Ending Structural Inequality for Native Americans

29

on average, $4,000 each. The IHS trailed them all

with only $2,000 in spending per capita.45

The state and federal funding that is allocated

to state and local governments should also taketribes into account so that all Americans have

equal access to government dollars. The U.S.

Constitution expressly recognizes tribal governments

as well as the federal and state governments. Adding

the two words and tribes to all federal bills allocat-

ing money to states will have a major impact on

reducing Native American economic inequality. As

Jacqueline Johnson Pata testified to the House

Committee on Oversight and Government Reform

in September 2009, The [American Recovery and

Reinvestment Act] provides $3.1 billion to supportstate renewable energy and efficiency programs but

nothing for tribes.46 This is particularly troubling

when one considers that the wind energy on tribal

lands could generate over 20 percent of the nations

electric power. Forgetting to include the Indigenous

people of the United States is a political act that

should no longer be tolerated.

As the Native American community faces the

ongoing recession, it is vital to invest in the eco-

nomically weakest parts of America, which most

often include tribal lands. Of the ten poorest coun-

ties in the United States, eight contain Indianreservations within their boundaries.47

nvesting in job creation is essential to making

American Indian lands places of socioeconomic

dynamism rather than rural ghettos of concen-

trated poverty. Investment in job creation will also

help tribes retain their most highly educated mem-

bers, who often see few economic opportunities on

reservations and leave to work elsewhere. This brain

drain can actually create a net loss in overall educa-

tional attainment on tribal lands. Federal grants totribes could provide incentives for highly skilled

Native workers to maintain ties with their reserva-

tions, and could prove one of the most effective

means of strengthening tribal communities.

I


30/33

30

Conclusion: Returning to Native AmericanValues and Valuing Native Americans

ative Americans will suffer disproportion-

ately during this recession, yet the long-

term solutions to the nations economic

problems might be found in this very same com-

munity. In the award-winning essay Plan for a

New Native American Century, Jacquelyn Dyer

of the Hopi notes how values stemming from the

First Americans are essential in dealing with our

twenty-first-century economic crisis.

Ms. Dyer notes that this Great Recession is

rooted in the financial industry and its insatiable

greed [that] must be replaced with a more sustain-

able attitude.48 She points to tribal businesses led

by tribal values as a model that should inspire a

shared, broad-based economic recovery. These

values are reflected in a community approach to

getting things done where the focus is not imme-

diate profits for a few but to help each other and

grow together, taking into consideration the

benefit of all communities.49

By strengthening investment into Native

American communities, the U.S. may not just be

fulfilling a long-delinquent debt, but could also be

investing in the prototype of an economy for the

future, a model that does not place short-term profit

ahead of long-term communal interest.

The United States must diversify its investment

portfolio. Instead of investing in the industries and the

values that led us into our current crisis, the country

should pursue alternative industries and values that

may provide lasting economic recovery. Native

American communities should be placed at the fore-

front of our nations investment into sustainable long-

term economic growth.

During his 2008 presidential campaign, President

Obama stated that the U.S. Constitution was stained

by this nations original sin of slavery.50 Though

there is no debate that this countrys past and present

is still stained by the legacy of the enslavement of

African people, it is equally clear that slavery was not

Americas original sin. The original sin was the treat-

ment of the American Indian people. As the nationworks to reverse todays economic decline, it must

finally work to repair the stains of the past.

N


31/33

31

Endnotes

1The data analyzed in this report refer only to self-identified, single-race Native Americans, unless otherwisenoted.2 Analysis of 2000 Census data by the Social Science Data Analysis Network,http://www.censusscope.org/us/chart_popl.html3 NCAI Policy Research Center, Demographic Profile of Indian Country, January 10, 2007 p. 2.4 PBS, Indian Removal: 1814-1858, http://www.pbs.org/wgbh/aia/part4/4p2959.html, accessed Aug. 2009.5 Harvard Project on American Indian Economic Development, The State of Native Nations: Conditions UnderU.S. Policies of Self-Determination (Oxford University Press, 2008), p. 96.6Ibid.7Ibid. p. 48 Peter Iverson, We Are Still Here(Harlan Davidson, 1998), p. 130.9 Harvard Project on American Indian Economic Development, The State of Native Nations, pp. 31-35.10 Charles F. Wilkinson, Blood Struggle: The Rise of Modern Indian Nations (W.W. Norton, 2005), p. 128.11 Harvard Project on American Indian Economic Development, The State of Native Nations, p. 31.12 W. Ron Allen, We Are a Sovereign Government,http://www.pbs.org/wgbh/amex/weshallremain/native_now/sovereignty_government, accessed Aug. 2009.13 ChildTrends Databank, http://www.childtrendsdatabank.org/indicators/79BirthRates.cfm.14 National Congress of American Indians, The Census, American Indians and Alaska Natives, November 2000,http://www.ncai.org/ncai/resource/documents/governance/censuspim.htm. Information derives from the Accu-racy and Coverage Evaluation Survey of the 1990 Census.15 Stella U. Ogunwole, We the People: American Indians and Alaska Natives in the United States, Census 2000Special Reports, U.S. Census Bureau, February 2006, fig. 10, p.14,

http://www.census.gov/population/www/socdemo/race/censr-28.pdf.16 Joseph B. Taylor and Joseph P. Kalt,American Indians on Reservations: A Databook of Socioeconomic Changebetween the 1990 and 2000 Census(Harvard Project on American Indian Economic Development, 2005).17Ibid.18 U.S. Census Bureau, Race and Hispanic Origin in 2005, in The Population Profile of the United States:Dynamic Version, p. 2, http://www.census.gov/population/pop-profile/dynamic/RACEHO.pdf.19 U.S. Census Bureau, Race and Hispanic Origin in 2005, p. 3.20 U.S. Census Bureau, The American Community American Indians and Alaska Natives,http://www.census.gov/prod/2007pubs/acs-07.pdf, accessed Aug. 2009.21 Ogunwole, We the People, p. 8.22 Harvard Project on American Indian Economic Development, The State of Native Nations, p. 222.23 The Henry J. Kaiser Family Foundation, Kaiser Commission on Medicaid and the Uninsured: Key Facts,

http://www.kff.org/uninsured/upload/Health-Insurance-Coverage-and-Access-to-Care-Among-American-Indians-and-Alaska-Natives.pdf, accessed July 2009.24 U.S. Department of Health and Human Services, Office of Minority Health, American Indian/Alaska NativeProfile, http://www.omhrc.gov/templates/browse.aspx?lvl=2&lvlID=52, accessed July 2009.25Ibid.26 U.S. Department of Education, Institute of Education Sciences, Indicator 1.6: Individuals, Families, andChildren in Poverty, in Status and Trends in the Education of American Indians and Alaska Natives,http://nces.ed.gov/pubs2005/nativetrends/ind_1_6.asp .


32/33

Endnotes

32

27 Gary Sandefur, ed., Changing Numbers, Changing Needs: American Indian Demography and Public Health (National Academies Press: 1996), p. 133.28 Richard A. Serrano, Budget Cuts Pose Dilemma Among Native Americans, Los Angeles Times, May 8, 1995,

http://articles.latimes.com/1995-05-08/news/mn-63803_1_native-american-programs, accessed Aug. 2009.29 National Indian Gaming Commission, Indian Gaming Regulatory Act,http://www.nigc.gov/LawsRegulations/IndianGamingRegulatoryAct/tabid/605/Default.aspx, accessed July 2009.30 The Nanticoke Lenni-Lenape Tribe, We Are a Non-Gaming Tribe http://www.nanticoke-lenape.info/nongaming.htm, accessed Aug. 2009.31 Harvard Project on American Indian Economic Development, The State of Native Nations, p. 149.32Ibid.33 Associated Press, For Some Indian Tribes, Casinos Are a Bad Bargain, republished April 6, 2008 on the Newsfor Natives blog, http://newsfornatives.com/blog/2008/04/06/for-some-indian-tribes-casinos-are-a-bad-bargain,accessed Aug. 2009.34 National Indian Gaming Association, Indian Gaming Facts, http://www.indiangaming.org/library/indian-gaming-facts/index.shtml, accessed Aug. 2009.35 NPR, How the Recession is Affecting Native Americans,http://www.npr.org/templates/story/story.php?storyId=100393116, accessed July 2009.36 American Public Media, Indian casinos unlucky in recession, Marketplace,January 26, 2009,http://marketplace.publicradio.org/display/web/2009/01/26/pm_native_american_casinos, accessed Aug. 2009.37 Dave Palermo, Recession Impact on Native America Varies with Tribe, Indian Country Today, May 15,2009, http://www.indiancountrytoday.com/business/44899072.html, accessed July 2009.38 Sandefur, Changing Numbers, Changing Needs, p. 133.39 NPR, Native Americans Grapple with Recession,http://www.npr.org/templates/story/story.php?storyId=105148259, accessed July 2009.40 U.S Census Bureau,American Indian- and Alaska Native-Owned Firms: 2002, August 2006, p. 150,http://www2.census.gov/econ/sbo/02/sb0200csaian.pdf.41

U.S. Commission on Civil Rights,A Quiet Crisis: Federal Funding and Unmet Needs in Indian Country,http://www.usccr.gov/pubs/na0703/na0204.pdf, accessed July 2009.42 Harvard Project on American Indian Economic Development, The State of Native Nations, p. 220.43 Tim Giago, How Will Universal Health Care Affect Native Americans? The Huffington Post, June 21, 2009,http://www.huffingtonpost.com/tim-giago/how-will-universal-health_b_218636.html, accessed July 2009.44 Harvard Project on American Indian Economic Development, The State of Native Nations, p. 221.45Ibid.46 Jacqueline Johnson Pata, testimony before the House Committee on Oversight and Government Reform,September 23, 2009.47 National Congress of American Indians, Tribal Government Economic Recovery Plan, testimony before theSenate Committee on Indian Affairs, January 15, 2009, p. 3.48 Jacquelyn Dyer, Plan For A New Native American Century: Alaska Federation of Natives, Native Insight

Competition Winner, October, 2009, http://www.nativeinsight.org.49Ibid.50 Barack Obama, A More Perfect Union, Philadelphia, PA, March 18, 2008,http://www.barackobama.com/2008/03/18/remarks_of_senator_barack_obam_53.php.


33/33

Publications on the Racial Wealth Divide

Available online atwww.ips-dc.org/inequality.

State of the Dream 2009: The Silent DepressionJanuary, 2009Published by United for a Fair EconomyIn this years report, we found that people of color are experiencing a silent economicdepression. Its silent because its going unnoticed, unacknowledged, and unaddressedand yet the evidence is striking. We detail additional evidence that shows the currentracial economic inequity, including poverty rates, wealth and assets and economic mobil-

ity. While racial barriers did not prevent an African American from becoming president,they continue to impede many people of color from achieving the same economic successas their white counterparts.

40 Years Later: The Unrealized American DreamApril, 2008Published by the Institute for Policy StudiesThis report examines the progress in and challenges to economic equality between Afri-

can Americans and whites since April 4, 1968 using data from the U.S. Census Bureau,the Economic Policy Institute, the Survey of Consumer Finances, and other sources. Thereport concludes that despite educational advances, economic equality for African Ameri-cans is still a dream, not a reality.

State of the Dream 2008: ForeclosedJanuary, 2008Published by United for a Fair EconomyTo commemorate the 79th birthday of Dr. Martin Luther King Jr., the Institute forPolicy Studies and United For A Fair Economy co-sponsored a forum and prepared thisreport on the historic racial wealth divide, what progress has been made in bridging thisdivide since the death of Dr. King, and the impact of our contemporary subprime hous-ing crisis on this divide.

Recession and Native America

Documents

Transcript of Recession and Native America