01 Mar 1998 Government Rules Akin to “Regulatory Racism,” by Kevin Pritchett

A new report from the Milton E. Eisenhower Foundation claims the predictions of the 30-year-old Kerner Commission have come true: America has become two separate societies, one black and one white. Among other problems, the urban policy group cites high inner-city unemployment rates, large numbers of incarcerated black males and low minority academic achievement as a call for more social spending, cuts in the military and other liberal policies. It is sure to cause old-line civil rights types to cackle for more government intervention into the problems of the poor.

Few liberal social engineers realize government intervention is the problem, not the solution. Whether it be too much regulation or illogical policies, government has stymied the efforts of community-based organizations seeking to alleviate the many problems facing the inner-city and poor areas through job training, education, tutoring, housing development, homeless care, senior citizen care and other social functions. Some groups receive government money, while some do not.

There is a common theme in the stories told in How Government Harms Charities, a new report by the African-American leadership network Project 21. That theme is that government – local, state and federal – hurts the poor, especially minority poor. Harmful regulations and red tape seem almost targeted towards crowding out community-based assistance. It is almost as if there is “regulatory racism” at work.

Eighty-nine percent of the 441 community groups responding to Project 21’s survey indicated they had problems with government, or were afraid to apply for government funding due to fear of excessive control of their activities.

Several laws were specifically cited as hindrances to expanding opportunities for the minority clients of these organizations. One law often cited by these groups was the Americans With Disabilities Act (ADA), an initiative to expand handicapped accessibility that has become a boon for disability-rights lawyers. At the De Le Salle Academy, a New York City school for low-income, academically-talented students in grades 6, 7 and 8, founder and principal Brother Brian Carty told Project 21 that any renovation of the Academy’s rented space would trigger ADA requirements like ramps and an elevator. “But in New York, it can cost upwards of $500,000 to install an elevator. This is just too expensive,” said Brother Carty. “The money is just not there! As a result, we can not renovate to expand our program offerings or the work space for current programs.”

Another harmful law is the Davis-Bacon Act. Passed in 1931 to keep non-unionized blacks and other minorities out of the Depression-era construction job market, it requires almost all federal projects to pay employees a “prevailing [union] wage.” Today, it is used by labor unions to raise construction wages. This stifles the growth of housing stock, especially low-income housing.

Impact Services Corporation of Philadelphia, Pennsylvania provides employment and training to poor people with the objective of placing them in the private sector. They are also involved in comprehensive community development, with particular focus on low-income housing. Executive Director John McDonnell said, “There are so many rules and regulations that exist. The Davis-Bacon Act mandates that firms like Impact pay ‘prevailing wages’ on construction projects. Well, this requirement often makes projects too expensive for us. Plus, it becomes harder just to bid for jobs. Impact is thus often pushed out of competition.”

Government-mandated paperwork has also hindered community-based organizations from spending more of their time helping the poor. The Hispanic American Multi-Service Center of Indianapolis, Indiana provides human services for at-risk Hispanic families like food, clothing, employment, senior citizen programs, translation, immigration assistance, legal services, pediatrics and domestic violence assistance to name a few. Center Executive Director Pam Flores complains that “Sometimes it feels like we’re spending 90% of our time on paperwork, and only 10% on providing actual services.”

Jobs for Youth of Chicago, Illinois helps young blacks with little or no work experience by promoting vocational counseling, job placement and educational services. Executive Director John D. Connelly said the Job Training Partnership Act requires 37 pages of forms to enroll one child. In comparison, he noted an Ivy league college application has only eight pages.

When Teen Challenge of San Antonio, Texas applied for state funding, they received a negative review from state inspectors because they used plastic trash cans instead of state-required metal ones. For more than 28 years, Teen Challenge’s mission has been to provide drug-addicted teens with spiritual, educational and financial help. It is amazing that such a worthy cause can be tarred by pin-headed, bureaucratic rules.

Project 21’s How Government Harms Charities tells these stories and over 125 others. Not only that, it profiles 44 organizations that are worthy of special recognition and monetary support.

Over $1 trillion has been spent on a top-down “war on poverty” over the last few decades. It has created the economic rifts that plague disadvantaged communities. Unfortunately, when citizens try a bottom-up approach in dealing with their community’s own problems, government stands in the way. The people most hurt by government’s harmful regulation are the minority poor. While there may be no conspiracy, there seems to be a subtle, concerted effort to hurt such groups by regulating them to death. Such an effort, in any other context, would be called by its real name – racism.