Chicken Plants See Little Fallout From Immigration Raids
A trailer loaded with chickens passes a federal agent outside a Koch Foods plant in Morton, Miss., on Wednesday.
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Rogelio V. Solis/AP
Federal agents carried out one of the largest immigration raids in recent history this week, arresting nearly 700 workers at chicken processing plants in Mississippi.
But you can still buy a rotisserie bird at your local supermarket tonight for less than $10.
So far, the government crackdown has had little effect on the wider food processing industry, a dangerous business that is heavily reliant on immigrant labor.
The Trump administration says its crackdown helps discourage illegal immigration. But workers’ advocates warn it leaves vulnerable employees open to exploitation and unsafe working conditions.
“Americans really need to think about where their chicken and where their beef and their pork comes from and really demand that the industry raise labor standards,” says Debbie Berkowitz, who directs a health and safety program at the National Employment Law Project.
Authorities raided seven Mississippi poultry plants on Wednesday, arresting 680 people suspected of living in the country illegally. So far, no charges have been brought against the five companies that run the plants, although federal officials say that could change as the investigation is ongoing.
The Trump administration has focused considerable resources on workplace immigration probes. Investigations and audits more than tripled last year, and arrests of workers rose even more. But there was no comparable increase in the number of employers cited.
“These enforcement actions are always aimed toward the workforces,” says Ted Genoways, whose 2014 book, The Chain, focuses on the food processing industry. “No one ever seems to ask how it is that a company comes to employ a factory full of people who do not have legal immigration status.”
Genoways says that is reminiscent of other high-profile raids on a meatpacking plant in Postville, Iowa, in 2008 and at half a dozen Swift plants in 2006.
“In all those cases, there were work stoppages, huge numbers of people swept up, families divided, but little to no consequences for the people who did the hiring,” he says. “And those plants were back up and in production in fairly short order.”
Koch Foods, one of the companies raided in Mississippi this week, said in a statement that it closed for one shift on Wednesday but planned to keep operating to “minimize customer impact.” The company also advertised a hiring fair in Mississippi next Monday and advised job applicants to bring two forms of ID.
Koch Foods (no relation to Charles and David Koch, the majority shareholders of Koch Industries) — paid nearly $4 million last year to settle a complaint brought by the Equal Employment Opportunity Commission. Latina workers at the company’s plant in Morton, Miss., accused the company of both racial and sexual harassment. The company admitted no wrongdoing.
Another of the companies raided this week, Peco Foods, had two workers suffer amputations last year at a chicken processing plant in Arkansas.
The chicken industry boasts that its processing plants have gotten safer. The rate of workplace injuries was cut by half between 2003 and 2016. But poultry workers are still twice as likely to suffer serious injuries and six times as likely to contract a workplace illness as other private sector employees.
Berkowitz, who was chief of staff at OSHA during the Obama administration, says those numbers are likely understated, because of declining government inspections.
“The industry is totally dependent on finding workers who will not raise issues and who, to a degree, live in fear of the company and they’ll just keep their head down and do the work,” Berkowitz says. “For the last 30 years that’s been immigrant labor.”
A quarter-century ago, journalist Tony Horwitz documented the miserable conditions in a chicken processing plant in a Pulitzer Prize-winning story for The Wall Street Journal. Industry observers say little has changed since then.
“On a good day, the work is repetitive and stressful,” Genoways says. “On a bad day, if there’s a single mistake made by anyone in a group, there’s a high risk of accident.”
If anything, the pressure on workers has only increased, as processing lines move ever faster.
“Meatpacking remains one of the most dangerous jobs in America,” Genoways says. “And because of that, for really more than a century it’s been a job that’s very often done by first-generation immigrants who are just looking for a foot in the door and a way up the economic ladder in America.”
Users Can Sue Facebook Over Facial Recognition Software, Court Rules
The 9th Circuit U.S. Court of Appeals said Thursday that Facebook users in Illinois can sue the company over its use of facial recognition technology.
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Richard Drew/AP
A U.S. court has ruled that Facebook users in Illinois can sue the company over face recognition technology, meaning a class action can move forward.
The 9th Circuit U.S. Court of Appeals issued its ruling on Thursday. According to the American Civil Liberties Union, it’s the first decision by a U.S. appellate court to directly address privacy concerns posed by facial recognition technology.
“This decision is a strong recognition of the dangers of unfettered use of face surveillance technology,” Nathan Freed Wessler, an attorney with the ACLU Speech, Privacy and Technology Project, said in a statement. “The capability to instantaneously identify and track people based on their faces raises chilling potential for privacy violations at an unprecedented scale.”
Facebook told NPR that the company plans to ask the full circuit court to review the decision of the three-judge panel. “We have always disclosed our use of face recognition technology and that people can turn it on or off at any time,” said Joe Osborne, a Facebook spokesman. Information about its facial recognition technology is available in the company policy online.
The case concerns Facebook users in Illinois who accused the social media giant of violating the state’s Biometric Information Privacy Act.
Facebook argued that the users had experienced no concrete harm. But the 9th Circuit panel noted that intangible injuries can still be concrete, and it noted the Supreme Court has said advances in technology can lead to more personal privacy intrusions.
The appeals panel decided that Facebook’s technology “invades an individual’s private affairs and concrete interests.”
In 2011, Facebook launched a feature called “tag suggestions.” It allowed technology to analyze the details of people’s faces in uploaded photos — the distance between their eyes, their nose and other features. Users could choose to opt out of the feature. Facebook said it only builds face templates of Facebook users who have the feature turned on.
“Once a face template of an individual is created,” the judges wrote, “Facebook can use it to identify that individual in any of the other hundreds of millions of photos uploaded to Facebook each day, as well as determine when the individual was present at a specific location.”
They noted that Facebook keeps a database of users’ face templates, which are stored on servers in states that include Oregon, Iowa, Texas and California.
Facebook argued before the judges that its collection of biometric data happened outside of Illinois, and outside of the privacy law’s purview.
The panel disagreed, saying it was reasonable to conclude that the law was meant to protect people in Illinois, “even if some relevant activities occur outside the state.”
Privacy advocates have long expressed concern that face recognition technology can be used for mass surveillance and to target protesters, setting a dangerous environment in countries where democracy is failing or never existed at all.
Note: Facebook is one of NPR’s financial sponsors.
FedEx Is Breaking Up With Amazon, Ending Ground-Shipping Contract
Federal Express is increasingly seeing Amazon as a competitor in the shipping business. FedEx announced Wednesday that it is ending its ground-shipping contract with Amazon.
AUDIE CORNISH, HOST:
The U.S. business world was abuzz today over a high-profile breakup. FedEx is parting ways with Amazon. The logistics company says it will stop making Amazon’s ground deliveries. NPR’s Alina Selyukh reports.
ALINA SELYUKH, BYLINE: As far as breakups go, this one did not seem to break that many hearts. After FedEx announced its plans to stop delivering Amazon packages – both by air and with ground shipping – Amazon issued its own statement, saying basically it happens. Sometimes, things just don’t work out. Amazon’s executive in charge of operations tweeted – and I quote – “we wish them nothing but the best, conscious uncoupling at its finest.”
(SOUNDBITE OF SONG, “SOMEONE LIKE YOU”)
ADELE: (Singing) I wish nothing but the best for you, too.
SELYUKH: Forget romance. To get mathematical about it, last year, Amazon deliveries accounted for just over 1% of FedEx’s total revenue.
Logistics expert Marc Wulfraat estimates that, for Amazon, FedEx delivers about 4% of packages. Wulfraat runs the consulting firm MWPVL International.
MARC WULFRAAT: It’s kind of the end of a relationship that was never all that big in the first place.
SELYUKH: FedEx didn’t offer much detail but said the change allows them to focus on the, quote, “broader e-commerce market.” In recent months, FedEx shifted how it talks about Amazon, calling it a competitor. And indeed, Amazon already has a web of warehouses, trucking contracts and leased airplanes. And note that Amazon is one of NPR’s financial supporters.
But reading the tea leaves, Wulfraat says it’s all about Amazon’s new push to one-day shipping.
WULFRAAT: Probably Amazon does not want to pay the premium associated with that.
SELYUKH: Wulfraat is speculating. But he says, for FedEx, delivering your last-minute shopping is far less profitable than business shipments. It’s one package to your door versus dozens to the warehouse using the same truck and the driver’s time. He predicts Amazon and FedEx might both suffer from their breakup in the short term. But in the end, they will move on.
Alina Selyukh, NPR News.
(SOUNDBITE OF FAYE WEBSTER’S “SHE WON’T GO AWAY”)
Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
U.S.-China Trade War Spreads From Tariffs To A Battle Over Currencies
Currency dealers monitor exchange rates at the KEB Hana Bank in Seoul, South Korea. China’s currency and the U.S. stock market stabilized Tuesday, after a dramatic drop the day before.
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Jung Yeon-Je/AFP/Getty Images
The U.S. and China opened a new front in their trade war this week, when China allowed its currency to fall, triggering a sharp drop in the U.S. stock market.
The seemingly modest adjustment in global exchange rates had a seismic effect on Wall Street confidence, rattling retirement accounts and prompting a new round of bellicose rhetoric from President Trump.
Both the market and the currency stabilized on Tuesday, but not before investors got a stomach-churning preview of what an escalating trade war might look like.
The U.S. Treasury Department formally accused China of manipulating its currency, echoing a complaint the president had made via Twitter. But experts say China’s actions do not amount to currency manipulation, and they warned that Treasury Secretary Steven Mnuchin is squandering credibility that the U.S. might need in the future.
“Currency manipulation has a very specific definition under U.S. law,” said David Dollar, a former official with the Treasury Department and the World Bank. “China does not meet the standard.”
Although China does have a trade surplus with the U.S., it does not meet two other Treasury Department tests for currency manipulation, analysts said: It doesn’t have a large surplus in its broader “current account,” and it hasn’t made persistent, one-sided moves to interfere in currency markets.
Dollar, who is now with the Brookings Institution, says currency manipulation usually describes a country that is keeping its currency artificially low, in an effort to make its exports more affordable or to discourage imports.
If anything, China had been propping up its currency until this week. That’s when the government allowed market forces to take over and the Chinese yuan fell below 7 to the U.S. dollar for the first time in over a decade.
“The move down in the yuan on Monday was not artificial — it was an entirely natural market response to newly imposed U.S. tariffs,” wrote former Treasury Secretary Larry Summers in an op-ed for the The Washington Post. Last week, Trump sent a shock through financial markets with plans for a new 10% tariff on $300 billion worth of products imported from China — in addition to previously announced import taxes.
Mnuchin “has damaged his credibility and that of his office” by declaring China a currency manipulator, wrote Summers, who was Treasury secretary in the Clinton administration and an economic adviser to former President Barack Obama. “It will be harder now in the next difficult financial moment for Treasury Department pronouncements to be credited by market participants.”
The Treasury Department said it would consult with the International Monetary Fund about China’s falling currency, but observers said they did not expect much practical effect.
“It’s meaningless,” said Daniel Ikenson, director of the Center for Trade Policy Studies at the libertarian Cato Institute. “We’re already in a trade war with China. We’re already imposing all sorts of punitive measures. So just calling them a ‘currency manipulator’ is more political and it is an exercise in name-calling.”
The Chinese yuan stopped its slide on Tuesday, and U.S. investors appeared to catch their breath. Stocks regained some of the ground they lost the day before. U.S. stock indexes rose more than 1% on Tuesday, with the Dow Jones Industrial Average closing up 311 points.
Still, the market gyrations only add to the uncertainties that have led to a slowdown in U.S. manufacturing and business investment.
“The president’s flailing bluster, in which the treasury secretary is now a full participant, risks real economic damage as businesses and consumers become fearful and hold off spending,” Summers wrote. “The risk of recession going forward might now be as high as any time since the 2008 financial crisis.”
White House economic adviser Larry Kudlow offered reassurance Tuesday, telling CNBC there’s still an opportunity for a negotiated resolution of the trade war.
“The reality is we would like to negotiate,” Kudlow said. “The president has said if you make a good deal, maybe he’ll be flexible on the tariffs.”
Dollar agreed there’s room for compromise.
“It would only take a phone call between the two presidents to put things back on a good track,” he said. “They could just decide this [trade war] is mutually destructive.”
But Trump’s tweets showed little sign that he is backing down on his tariff threats.
“Massive amounts of money from China and other parts of the world is pouring into the United States for reasons of safety, investment, and interest rates,” he wrote Tuesday.
However, as nervous investors seek safety in dollars, that merely strengthens the U.S. currency — encouraging imports and making American exports more expensive. That’s precisely the opposite result of what the president says he wants.
“His protectionist policies are driving down the value of the Chinese currency and driving up the value of the dollar. And that’s just going to encourage trade deficits in perpetuity,” the Cato Institute’s Ikenson said. “If we want the dollar to settle down, we need to have more predictable, level-headed policies in place going forward.”
Treasury Declares China A ‘Currency Manipulator,’ Escalating Trade War
The Dow Jones Industrial Average closed down Monday, as did the S&P 500 and Nasdaq, as trade tensions between the U.S. and China increased.
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Richard Drew/AP
The Treasury Department formally labeled China a currency manipulator Monday, after Beijing allowed its currency to fall to an 11-year low. The tit-for-tat moves mark the latest escalation in the two countries’ trade war, which triggered a sharp sell-off on Wall Street.
While President Trump has long accused China of tinkering with its currency to gain an unfair advantage on world markets, this is the first time in a quarter century the U.S. has formally accused Beijing of currency manipulation.
The Treasury secretary will work with the International Monetary Fund “to eliminate the unfair competitive advantage created by China’s latest actions,” the department said in a statement.
China’s devaluation came days after Trump announced plans to level new tariffs on some $300 billion in Chinese imports, beginning in September. China also responded by suspending its already limited purchases of U.S. agricultural products.
Signs the two sides are digging in for an extended trade battle rattled investors on Monday. The Dow Jones Industrial Average fell 767 points, or 2.9%. The S&P 500 fell nearly 3%.
“Any investor who had anticipated that President Xi and President Trump would shake hands and reach some kind of an agreement by year-end is probably scratching that scenario off their blackboard,” said Jack Ablin, chief investment officer of Cresset Capital in Chicago.
The State Of The Diamond Industry
NPR’s Lulu Garcia-Navarro speaks with reporter Lara Ewin on the state of the diamond industry, and why store owners are not keeping up with younger and more diverse buyers.
The Fed Is Cutting Interest Rates. Why That Matters.
NPR’s Michel Martin speaks with economist and Federal Reserve historian Gary Richardson about the latest interest rate cuts.
MICHEL MARTIN, HOST:
Now we’re going to turn to this week’s other big economic news story – interest rate cuts. Earlier this week, the Federal Reserve cut interest rates for the first time in more than a decade. Federal Reserve Chairman Jerome Powell said the decision was made in light of slow global growth and trade tensions. The stock markets tumbled a bit, and President Trump complained the rate cut didn’t go far enough.
We wanted to talk more about this, especially the reaction to the rate cut and why it matters, so we’ve called Gary Richardson. He’s a professor of economics at the University of California, Irvine. He was also the historian for the Federal Reserve system from 2012 to 2016.
Professor Richardson, thank you so much for joining us.
GARY RICHARDSON: Thank you for having me on.
MARTIN: The cut itself was a bit of a haircut – you know, not that big of a change. But in a press conference after the decision, Federal Reserve Chairman Jerome Powell named weak global growth and trade tensions as some of the reasons behind the Fed’s decision. So is the significance of this less the rate cut itself the what it says about where the Fed thinks the economy’s going?
RICHARDSON: For sure that’s a big concern. The Federal Reserve has generally better information about the economy than most of the public, and they have a lot of experts there – they’re trying to predict the future. And the Fed is acting now as if we’re in a recession.
MARTIN: And why do you think the stock market reacted as it did?
RICHARDSON: Well, the signal I got from this is that the stock market is thinking that the Fed is telling us a recession is coming. There’s a lot of potential signals of recessions out there right now, and the Fed is acting as if we’re in a recession and taking the policies to counteract a recession. And I think a lot of people took note of that.
MARTIN: And at the same press conference, Chairman Powell said that we are in a, quote-unquote, “mid-cycle” adjustment. What does that mean?
RICHARDSON: It’s a new phrase. But basically, when they say the middle of the cycle, that means the peak of the cycle, right? The cycle goes up, and then it goes down. So they’re saying we’re kind of at the peak, and after the peak usually comes a contraction. So the question is, how long is the peak going to last, how long they can sustain the – kind of the peak of the boom before the economy shrinks.
MARTIN: I think there’s been a lot of talk about whether President Trump’s jawboning. I mean, he’s been complaining for some time now that he feels that the Fed isn’t doing enough to stimulate economic growth. Is his jawboning relevant here?
RICHARDSON: By law and not to the Federal Reserve, all presidents complain about the Fed, either in public or in private. Many have complained about the Federal Reserve much worse than Donald Trump. But Congress has told the Federal Reserve’s leadership and the Federal Open Market Committee, you must ignore that by law.
MARTIN: Well, that’s good to know, so thanks for clarifying that. So if people don’t follow economic news closely, what should they be paying attention to as this story continues?
RICHARDSON: If you’re thinking about refinancing your house, you might want to wait. The Federal Reserve is signaling potentially big problems, which usually means a series of rate cuts. For, like, businesses, there’s a bunch of things to be concerned about. One is the Fed is signaling they’re worried about the future. They might have information that a recession’s really here.
Another is that they may be signaling that they’ve changed policies. In the past, the Federal Reserve would wait to cut interest rates until they knew for sure we were in a recession. Now they’re cutting interest rates when we don’t – it’s not clear we’re in a recession. This could be a policy that leads to kind of more stability, right? If we’re – head off recessions. But also, it leads to a lot more risk. If the Federal Reserve stimulates the economy, but there’s not a recession, then the economy can get overheated, and the eventual contraction is going to be a lot worse.
MARTIN: That is Gary Richardson, former Federal Reserve System historian and professor of economics at the University of California, Irvine.
Professor Richardson, thank you so much for talking to us.
RICHARDSON: Oh, thank you. Hopefully it will be useful.
(SOUNDBITE OF ED SHEERAN’S “I SEE FIRE (KYGO REMIX)”)
Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
Philadelpha Phillies Sue To Keep Beloved ‘Phanatic’ Mascot From Free Agency
The Phillie Phanatic during a baseball game against between the Philadelphia Phillies and the Colorado Rockies in May in Philadelphia.
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Laurence Kesterson/AP
Major League Baseball’s Philadelphia Phillies are suing the creators of “The Phillie Phanatic,” to prevent them from making the green and furry mascot a “free agent,” available to root for and promote other teams.
The Phanatic debuted at a Phillies game in April 1978 with the help of Harrison and Erickson, Inc., which designed and created it.
According to a lawsuit filed in New York, the firm’s principals, Wayde Harrison and Bonnie Erickson, were paid over $200,000 by the end of 1980. In 1984, after it was clear that the Phanatic was a hit, Harrison and Erickson terminated the original licensing agreement and renegotiated a deal for $215,000. The Phillies say the 1984 agreement gave the team the rights to the mascot forever.
The 39-page lawsuit says the firm “has threatened to obtain an injunction against the Phillies’ use of the Phanatic and to ‘make the Phanatic a free agent’ if the Club does not renegotiate the 1984 Assignment and pay H/E millions of dollars.”
The Phillies claim that the team has a 41-year investment in the mascot and that it is a “co-author of the Phanatic costume” and “author of the Phanatic character.”
In addition to the Phillie Phanatic, Bonnie Erickson is also known for her work with The Muppets creator, Jim Henson. She has created mascots for other pro sports teams. But none caught on like the Phillie Phanatic.
As the Victory Journal reported:
“As Harrison/Erickson see it, three elements determine the success of a mascot character: ‘A good design, a good performer, and the support of the team,’ says Harrison. ‘None of those three things is easy. Nobody really executed the program as well as Philadelphia. The Phillies, they got it 100 percent.'”
Pentagon Pauses $10 Billion Contract That Embroiled Amazon In Controversy
Defense Secretary Mark Esper is re-examining a cloud computing contract worth up to $10 billion, the Pentagon said Thursday.
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Chip Somodevilla/Getty Images
The Pentagon is hitting pause on a massive, first-of-its-kind cloud computing contract after President Trump cited critics’ accusations of favoritism toward Amazon.
Mark Esper, the new defense secretary, is re-examining the project just weeks before the winner was expected to be announced. Amazon and Microsoft are the finalists for the contract, which is worth as much as $10 billion and will be as long as 10 years. The project is called JEDI, for Joint Enterprise Defense Infrastructure.
“No decision will be made on the program until he has completed his examination,” Department of Defense spokeswoman Elissa Smith said on Thursday.
JEDI is a high-profile contract to collect and store sensitive military data and give U.S. war fighters access to cutting-edge technologies, like artificial intelligence. It has been one of the most controversial Pentagon technology contracts, with lawsuits, several investigations, rebukes and, most recently, Trump’s interest in what is normally a bureaucratic contracting process.
The new examination is good news for Oracle and IBM, which have been knocked out of the bidding competition and unsuccessfully sued to block the award.
They and some Republicans in Congress have argued that the Defense Department should select multiple companies instead of a single winner. Critics have also accused the Pentagon and Amazon of having an unfairly cozy relationship, pointing to several Defense Department employees who have done work for Amazon’s cloud business, AWS.
The Department of Defense, the Government Accountability Office and the Court of Federal Claims have reviewed the JEDI bidding process and allowed the contract to proceed. The Pentagon has also hit back that the criticisms were “poorly-informed” and “manipulative.”
But these complaints have reached the ear of Trump, who has publicly expressed disdain toward Amazon CEO Jeff Bezos over Amazon’s deal with the U.S. Postal Service and Bezos’ personal ownership of The Washington Post, whose news coverage is a common target of Trump’s criticism.
“I’m getting tremendous complaints about the contract with the Pentagon and with Amazon; they’re saying it wasn’t competitively bid,” Trump told reporters on July 18. “I will be asking them to take a look at it very closely to see what’s going on because I have had very few things where there’s been such complaining.”
Congressional letters have also been flying in recent weeks from Republicans who think that the JEDI contract is tainted — and Republicans who argue the delays in awarding it have already hurt the Pentagon’s urgent technology needs.
Amazon, Microsoft and Oracle declined to comment on the re-examination of the cloud contract. Amazon, IBM, Microsoft and Oracle are among NPR’s financial supporters.
“JEDI is probably the most important cloud deal ever,” Wedbush Securities analyst Daniel Ives said. “This is the Pentagon moving to cloud, and any company that gets this — it’s going to be a massive ripple effect for decades to come.”
A New Trump Rule Could Weaken A Civil Rights Era Housing Discrimination Law
The Trump administration is moving to weaken the civil rights-era Fair Housing Act — making it much harder to bring lawsuits alleging discrimination in housing, according to housing advocates. But conservative groups applaud the move and say it would stop frivolous lawsuits.
A draft of the Department of Housing and Urban Development rule, obtained by NPR, would target a powerful weapon that’s used in discrimination cases. It’s called “disparate impact.” That means that to prove discrimination in a lawsuit, plaintiffs don’t have to prove, for example, that a bank employee is refusing to make loans to people of color. They just have to show that a company has a business practice that, on its face, may not purposefully discriminate but has a discriminatory effect.
Wanda Onafuwa says a house next door to her in Baltimore fell into disrepair after Bank of America foreclosed on the property.
Courtesy of Wanda Onafuwa
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Courtesy of Wanda Onafuwa
“It’s important because it allows us to really get at discrimination that’s not intentional,” says Nikitra Bailey, a lawyer with the nonprofit Center for Responsible Lending. She says the Trump administration’s new rule would severely restrict this very important tool for fighting discrimination in housing.
“It’s huge,” Bailey says, because it allows fair housing lawsuits to obtain remedies for large numbers of people “without having to demonstrate each individual action of discrimination.”
The proposal, which is not yet public, is expected to be released in August.
In one current case, a fair housing group is suing Bank of America, alleging that when the bank foreclosed on homes in recent years, it treated the vacant houses very differently in white neighborhoods than it did minority neighborhoods.
Wanda Onafuwa lives next to one of these houses in Baltimore’s Tremont neighborhood. She works in accounting, owns her house and raised her kids there. She says it’s a nice, quiet street. But then Bank of America foreclosed on the house next door, and it fell into worse and worse disrepair.
“The grass wasn’t being mowed, there were no windows upstairs,” Onafuwa says. “So you have a bad rainstorm, and I don’t know what was going on with the roof, water would get in.”
She says water would fill the basement and then spill over into her basement. “There were rats running around.”
Onafuwa says she called the city and the bank repeatedly, but not much changed. Then, she says, a squatter started living in the vacant house — “a guy going in and out.” That’s even though, she says, there was no electricity hooked up. “It just looked pitch-black,” she says.
Lisa Rice, president of the National Fair Housing Alliance, which is bringing the lawsuit, says her group looked at foreclosed properties in more than 70 communities across the country with comparable levels of owner-occupied homes and other similarities.
“In the white communities that we looked at, the story was completely different,” she says. “The grass was mowed, the doors were secure, the windows were not broken, we didn’t see trash and debris.”
Bank of America said in a statement that it denies the claims in the lawsuit. “Our commitment to sustainable homeownership for low- to moderate-income and multicultural clients and communities has always been a hallmark of Bank of America,” it said.
But in a disparate impact lawsuit, you don’t have to show that a company meant to discriminate. The company might have had the best of intentions but still have adopted a policy that has an unequal outcome with a discriminatory effect.
Rice says these types of Fair Housing Act cases go back more than 40 years. In 2015, the Supreme Court upheld the use of disparate impact while imposing some limitations. But many corporations and conservatives don’t like this legal approach.
“There are always going to be racially disproportionate results for any policy,” says Roger Clegg, president of the Center for Equal Opportunity, a conservative think tank that focuses on civil rights issues. Clegg, who worked in the Justice Department in the Ronald Reagan and George H.W. Bush administrations, says these disparate impact cases are often unfair to defendants because the cases find discrimination where it’s not actually happening.
“If you have a landlord who says, ‘I’m not going to rent to people with a history of violent crime,’ ” he says. “The fact that that has a racially disproportionate result does not make it discrimination.”
So he says this disparate impact approach results in a lot of unfair lawsuits. And he says the Trump administration’s new rule will provide clarity about the limits under the 2015 Supreme Court decision.
But Bailey, of the Center for Responsible Lending, says the proposed rule goes way beyond that. “It really makes it more difficult to bring disparate impact cases, and then it limits the damages for discrimination,” she says.
Bailey says with African American homeownership rates at their lowest level in 50 years, this could set up more roadblocks.
The Department of Housing and Urban Development says it can’t comment on the proposed rule yet. But in an earlier statement, HUD Secretary Ben Carson said the department “remains committed to making sure housing-related policies and practices treat people fairly.”
But civil rights advocates say they’re worried. They say that beyond this proposed housing rule, the Trump administration is looking to roll back civil rights protections in education and in terms of which groups of people deserve protection from discrimination.