Chalk up Memphis as the least surprised place in the country when the racial disparities for the Covid-19 were announced.

After all, all of us were told that people with risk factors were vulnerable to the disease, and there is no risk factor greater in America than being poor and black.

That goes double for Memphis and Shelby County which are majority African American with a century of intractable poverty and economic policies too often defined by low expectations and worker exploitation, as  seen in an emphasis on low wage jobs, in inaction to boldly address structural problems, and in a “poor will always be with us” paralysis.

As I blogged April 3, “When the economy sneezes, black people catch pneumonia, a truism stated by former Urban League president Vernon Jordan.  When the economy in turn catches pneumonia, the prognosis is even more dire for African Americans and an African American city.”

In particular, the working poor get hit from all sides.  Not only do they have risk factors that result as byproducts of poverty, they also are found in manual and unskilled jobs where they are either the first to be laid off or who remain on the job (think Amazon and Kroger) even as fellow workers have tested positive for the virus.

No Equalizer

Although our own history conclusively proves the risk factors of being black in America, we listened early on to a lot of political speak about the coronavirus being the “big equalizer,” but that was far from the truth.  In an analysis of about half of the cases in Shelby County, just under 70% of the people who tested positive were African American and just over 70% who died were African American.

A BBC commentator said it well:

The Shelby County Health Department – which ultimately answers to Mayor Lee Harris – didn’t manage to calculate the racial disparity, but neither did the Centers for Disease Control (CDC).  Because of this, the early warnings about the virus failed to convey special warnings that should be aimed at African Americans nor did it make the point that this additional risk is directly related to the disinvestment in struggling neighborhoods, racial bias in our health and medical systems, deeply engrained economic segregation, and the gaping racial disparities in incomes.

Reject Simple Answers

In my April 3 blog post, I spotlighted the financial barriers and the health realities that exist here and which makes us especially vulnerable to this pandemic, which came in the midst of happy talk about where our economy was and the new prosperity it was producing.

Much of that was hyperbole – economic metrics told a different story when compared to other cities – and if anything, the coronavirus has punctured the balloon of talking points about momentum and an economic renaissance.  It is encouraging that some of the high-profile projects appear to remain on schedule although some announced marquee projects not yet under way may be on a bubble.

So, in the midst of these realities for Memphis and Shelby County, what exactly should we be doing?

First, we should for once in our history forego the lure of the magic answer.  If there are government grants, give every nonprofit a level playing field to make its case for why it has the most significant ROI for our community.

That too applies to government budgets buffeted by serious reductions in revenues.  We understand county finance officials’ concerns but the Shelby County Board of Commissioners was right in rejecting Mayor Harris’ proposal to cut budgets by $10 million, because there is the need for greater analysis of the overall damage to the budget and a full menu of options to address it.

After all, for a government that boasts of $1.3 billion in revenues, $10 million should be in cigar box marked petty cash, so rather overreact to the $10 million, county government should pause before making a decision.  Mayor Harris really can only make suggestions about cuts because half of the county’s revenues are under the control of Shelby County Schools.  In addition, he has no authority over the budgets of other county elected officials.

Budgetary Options

That doesn’t mean Mayor Harris can’t use his bully pulpit to make recommendations.  He seems to have made a start by exempting some services from the cuts.

When former Mayor Bill Morris faced similar revenue shortfalls, he required every director and department under his control to make a list of every service in order of priority, and priority was defined as services that affect people in a direct and positive way.  Head Start was in, road building was out.

The exercise was not only helpful in moving through the immediate crisis, but it created a context for budget discussions.  After all, service priorities should also be getting budget priorities.

On another occasion, he reduced the payroll by about 200 workers.  With 69% of the county’s budget spent on personnel, it was the long-term way to cut expenses.  Another time, he cut budgets across the board by a specific percentage.  The problem with that approach is that it treated every county service as the same and it punished managers who developed frugal budgets free of padding.

To his credit, Mayor Harris did not apply the budget cuts to the Health Department, Division of Community Services, and the Sheriff’s Office.  That’s a good first step, and now, those departments and every agency should rank its services by priority.

It’s A Rainy Day

City of Memphis’ budget challenges are much more severe, because it receives about 15 times more in sales taxes than Shelby County, which only collects local option sales taxes in the unincorporated areas of the county.  (Shelby County Schools has a similar reliance on sales taxes as City of Memphis, but so far, its leaders have been quiet about the impact on its budget.)

A few weeks ago, I estimated that the hit to city government’s budget in this fiscal year, which ends June 30, will be about $30 million and that may have been low by $10 million.

Memphis Mayor Jim Strickland said his administration will address the revenue shortfall without touching the city’s $81 million fund balance (often called its “rainy day fund).”  That’s a yeoman task, but then again, that fund’s purpose is precisely to weather crises.

On the county side of the street, with only a $10 million shortfall to address, its rainy day fund would seem a logical place to go in the short term.  After all, even without a crisis – except for a political one – county government has pulled $15 million in the past two years from the fund to balance its budgets.

Javier Bailey, chief administrator for the office of Shelby County Assessor Melvin Burgess, was right when he told commissioners that the best way to deal with the $10 million gap is to restore the six cent reduction in the property tax rate made following reappraisal.  The cut should never have been made in the first place and it amounts to about $2 more a month on a $150,000 home.

Mayors’ Micro Impact

That’s the budgetary context, but there’s also the economic one.  The truth is that mayors have little to do with their cities’ economic success, because so much of it depends on macro factors.  There’s nothing like a political ad that points out the growth in jobs, even if it’s national trends that are creating them.

While mayors love to announce new companies while allowing companies not to pay more than $80 million a year in city and county taxes, little of the celebrated $15 billion in new construction investment touted in so many speeches resulted from the budget-draining PILOT programs.

But that doesn’t mean that mayors can’t influence factors, but it requires a high level of courage, boldness, and political risk. That’s probably why when economic development and politicians talk about getting the fundamentals of the Memphis economy right, they regularly ignore the micros issues that they can influence.

That takes us back to the top of this blog post.  It’s all about a city with too many poor African Americans whose futures are set by the zip code where they are born.  No city in the continental U.S. has worse odds for a child moving from the bottom fifth to the top fifth in incomes than Memphis.

It’s not enough that the child poverty rate is nothing sh ort of obscene and we wring our collective hands about it, but here’s the kicker: children born in Memphis have a 3% chance of moving from the bottom fifth in income to the top fifth.  If that’s not enough for us to do whatever it takes and however much it takes to change that trajectory, our economic future is preordained and will make the negative impact of the coronavirus look like a slight bump in the road.

Focusing on What Matters

While children receive well-deserved attention, there remains the plight of tens of thousands, the hundreds of thousands of men and women who are prisoners of the institutional racism that limits opportunity,  treats $13 an hour jobs (the minimum level for a PILOT) as a living wage, subsidizes prominent apartment developers while urban neighborhoods decline, and looks the other way when local banks won’t finance $50,000 houses despite the Community Reinvestment Act.

In the days ahead, there will undoubtedly be various committees created to analyze the impact of the coronavirus, to consider how many years it will take for the economy to return to pre-crisis levels, and to talk about what Memphis and Shelby County should do to help the economy rebound.

But, more than anything, there has to be a task force that considers how we finally address the realities laid bare by the coronavirus – the low wages that make too many job holders vulnerable; our willingness to accept policies that create even more vulnerable jobs; a poverty rate that relegates more than 150,000 Memphians to be merely spectators to economic growth; an acceptance that workers in restaurants, hotels, and retail stores should make less than a living wage; and the belief that there’s nothing we can do to help those who clean up the hospital rooms of Covid-19 patients and care for many when they return home or to nursing and assisted living homes.

People’s eyes tend to gloss over when we discuss some issues with no easy answers – schools and poverty, for example – but there’s no better time to stop glossing over the importance of addressing the fundamentals that have defined our economy in the past and will do it again in the future.

Decisions we make today on these fundamental issues will determine our economic future.  The coronavirus will pass at some point, and our challenge is to make sure our community is stronger to compete and succeed in the future.  In its way, it’s all about being brilliant at the basics of the forces that drive our economy.

After all, a crisis is a terrible thing to waste.


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