The economy’s road ahead is a familiar path
Mark Trahant
ICT
Fifty years ago the Bureau of Indian Affairs marked the poverty level for American Indian and Alaska Natives, saying that an individual earning $1,115 per year or less met the designation. Then the same agency calculated the unemployment rate for those same groups at 58 percent.
The numbers included a few explanations: The labor force measure was based on every individual 16 and over “except those who cannot work because they are attending school, caring for children, or are unable to work by reason of disability, retirement, or age,” the BIA stated, according to a 1972 American Indian Press Association report.
The bureau went on to state the statistics were based on the entire population, included people not seeking work, because it was difficult to make estimates without expensive surveys. It was also difficult calculating accurate estimates because there were so few jobs available on reservations.
“In any case, to include persons not wanting work in the labor force results in a higher unemployment rate than would be found in a standard household survey,” the report states.
In other words, the federal agency was guessing.
Today there are several ways to look at unemployment data. A report this year by the Brookings Institution put it this way: “While the nation’s topline unadjusted unemployment rate was 4.4% in January, the unemployment rate among Native American workers was an extraordinarily high 11.1%. Nearly two years into the recovery, Native American workers are contending with a labor market that would be considered catastrophic if it was reflective of the full economy.”
But what’s also striking was the name of the report: “For the first time, the government published monthly unemployment data on Native Americans, and the picture is stark.”
For the first time? In 2022? That one data point describes the challenges of measuring Indigenous nations and peoples.
One cool tool is published by the Federal Reserve Bank’s Minneapolis Branch and its Center for Indian Country Development. It’s a dashboard that takes raw data from federal statistics and constructs labor market estimates for American Indian and Alaska Native workers. The tool measures labor force participation, employment and unemployment.
There was a lot happening in 2022 when it came to measure the economy for Indigenous peoples.
At the beginning of December, the Minneapolis Fed held a research summit called “Unlocking Our Full Economic Potential.”
Casey Lozar, vice president of the Federal Reserve Bank of Minneapolis and director of the center, said tribal communities have experienced remarkable economic growth in the last several decades. Personal and household income has outpaced the rest of the United States, particularly on reservations; educational attainment rates have improved; child and family poverty rates have been significantly reduced; and unemployment rates have gone down and labor participation has increased, especially for Native women.
Lozar, Confederated Salish and Kootenai Tribes, said despite all that progress “we still lag behind other populations and dramatically so on nearly every economic indicator.”
“I grew up in Oklahoma. We were considered, you know, called poor dirty Indians, and we did not have status, we did not have respect,” Washburn said. “I might have been able to pass, but my school lunch tickets were a different color than everyone else’s for my free lunches because I was an Indian and my mom was a single Native woman trying to raise three kids.”
Washburn, who is now dean of the law school at the University of Iowa, said that adds a personal perspective to any economic growth in tribal economies.
“So most of this stuff has happened in my lifetime and that’s kind of what’s exciting about it and I’ve actually got to witness a lot of it happen,” Washburn said.
One of the first things that happened was President Lyndon B. Johnson’s war on poverty that created programs such as the Office of Economic Opportunity that gave tribes access to capital for new programs and projects.
“Tribal leaders back then were scrappy,” he said. But these dollars worked outside of the existing structure, the Bureau of Indian Affairs, and it opened up a door for innovation. That was followed by the self-determination era when tribal governments could assume the work of federal agencies and use the funding to set their own priorities in motion. Today more than half of the BIA and Indian Health Service appropriation is directed at tribally-run programs.
He said he remembers when his tribe took over the Indian Health Service hospital. Many tribal members complained, wondering how the tribe could provide a service better than the federal government. Yet that’s what happened and the customer service did improve because tribal leaders are more accountable than any large bureaucracy.
Washburn said Indian gaming is another example of tribal leaders sticking their necks out, taking risks, and creating an industry that is now generating $39 billion a year in revenue.
“That’s all good, so we’re doing a lot better than ever before,” he said. Economic prosperity gives tribal leaders a seat at the table. There are so many other examples of economic success, ranging from tax compacts with states to the growth of the land back movement.
On one hand, land back represents “the boldest” of Native activists such as NDN Collective and its call to return Mount Rushmore or create Indigenous streetscapes. But there are also working models that are ongoing. Washburn said there are more than 60 proposals for tribes to contract to co-manage federal lands. And on top of that the Cobell litigation resulted in a buy-pack of $1.9 billion worth of fractionated land holdings across the country.
Another tool published by the Minneapolis Fed is a map of financial institutions serving tribal nations and people. The Native American Funding and Finance Atlas regularly updates data on financial institutions, lending activity, and economic development programs, including areas eligible for Community Reinvestment Act activities.
In fact, access to capital funding is another economic success story.
“I think it’s fair to say that Native communities have been underserved by mainstream financial institutions, said Laurel Wheeler, an economist with the Minneapolis Fed’s center.
One recent survey by the FDIC shows that approximately 16 percent of American Indian and Alaska Native households have no account with either a bank or credit union and even when financial institutions do exist on or near Native communities there may be a mismatch between the banking culture and Native culture. So Native community development financial institutions or Native (Community Development Financial Institutions) help fill this credit gap in Indian Country. Native CDFIs are an increasingly important source of credit and financial services.”
Among Wheeler’s findings: Native Community Development Financial Institutions have delinquency rates that are lower than other financial institutions, even with lower household income and traditional credit metrics.
Lakota Vogtel, executive director of the Four Bands Community Fund, Inc., said the data only reaffirms the missions of Native community financial institutions. “Native CDFI models work but we’re hoping this is also an example of how others can step into the space and possibly financial institutions can adopt a different way of working within Indian Country.”
The creation of Indigenous led systems are a marker for what’s ahead, too. Think about the shift from BIA-run programs to those managed, designed and directed by tribes. That’s the same story arc that is occurring in so much of the field from finance to initiatives designed to limit the impact of climate change.