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 Program on Inequality and the Common Good

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 the Economic 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 Tribune and the Washington Post. Dedricks most recent piece, The Recession's Racial Divide, 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

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

Foreword
Rebecca Adamson Founder and President, First Peoples Worldwide

hese are exciting times to be a Native American. 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 much work remains to further increase Indian control of their rich assets, and thereby increase their wellbeing and prosperity.

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 of unhealthy 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.

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 important sources of their wealth. Development, understood by the dominant culture as an increase in 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 breakdown and persistent material poverty. This report highlights some of the factors that have led to the disparities we now widely observe

Key Findings
Despite recent strides, inequality persists. Over the last decade, Native American unemployment rates have decreased and income levels have risen. Despite these important gains, Native American income levels are still only two-thirds that of non-Hispanic white Americans. Likewise, the Native American unemployment 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 1960 and 2000, from about 500,000 to nearly 2.5 million. Between 1990 and 2000, the Native American population increased by 25 percent on reservations and by 21 percent off-reservation. Over that same time period, overall U.S. population increase was 15.6 percent. Native Americans have similar socioeconomic indicators as other disenfranchised minorities. Blacks and Native Americans share similar median household income, high school graduation rates and a similar decline in poverty rates. Blacks, Latinos, and Native Americans share similar college graduation rates between 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 no health insurance. Native Americans have the highest per-capita rate of disability among all racial/ethnic groups; American Indian and Alaska Natives are twice as likely as non-Hispanic white adults to die from diabetes and 1.2 times as likely to have heart disease. Recessions disproportionately hurt Natives. During economic downturns, Native Americans suffer longer than other groups. In the recession of the early 1980s, Native Americans on reservations saw a decline of real family income that lasted for a decade; unemployment rates for some tribes went as high as 95 percent. In the current recession, industries with a relatively high number of American Indian workerstimber and construction, to name twohave experienced disproportionately high job losses. Economic conditions on reservations have declined in step with government support. The decrease in 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 percapita income correlates with real per-capita government spending.

Policy Recommendations
1. Improve Census data collection. Native Americans have been historically undercounted by the Census. As a result, they form a small statistical sample and are often relegated to a footnote in Census studies, if they are not excluded altogether. The Bureau of the Census should improve its outreach and reform its datacollection methods to get more accurate, comprehensive, and frequent statistics on Native Americans. 2. Increase federal aid. In the 1970s, Native James Di Loreto, Smithsonian Institution Americans saw major socio-economic gains improvements that directly corresponded with increases in federal assistance. These gains were reversed beginning in the 1980s, when federal spending was cut nearly in half. 3. Overhaul the Indian Health Service. One-third of Native Americans/Alaskan Natives reportedly have no health insurance. The Indian Health Service, a public program meant to address their needs, is underfunded. IHS receives $2,000 per capita, considerably lower than the $5,000 per capita spent on the Veterans Affairs health system and the $6,000 per capita that is spent on Medicare. The IHS allotment 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 expressly recognizes tribal governments in addition to the federal and state governments. Yet tribal governments are not considered for the type of federal funding that is routinely sent directly to state and local governments. Recognition and inclusion of tribal governments in all state and federal funding packages could increase support for the public initiatives and social services that are managed by tribal governments. 5. Create jobs. The unemployment rate for Native Americans is double the U.S. average. Job-loss and poverty rates are especially high on reservations. Increased spending for skilled and non-skilled job training and job-creation programs could address this issue and, at the same time, create local opportunities for college-educated Native Americans who are otherwise forced to leave their communities to find work.

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 population growth, there has also been a strengthening of civil and tribal rights and socioeconomic advancement. 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 by the federal government, Indian-led economic development, 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 established themselves as citizens who can demand and win 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 development of American Indians.

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 American Indian economies. Bruce E. Johansen The 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 economy. This legacy is seen in the contemporary economic disenfranchisement of Native Americans.

When Europeans arrived in the fifteenth century, 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 Europeans. In the decades following the American Revolution, the U.S. government subjugated and exploited 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 the Meriam 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 allotment 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 policy toward formal recognition of tribes, but the U.S. government continued its policy of overt control. Instead of allowing Native Americans to make decisions regarding the land that had been granted to them by the government, most of the decisionmaking 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 Native Americans 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 management of Native resources. This relationship led to

Challenges to Native American Advancement: The Recession and Native America

further mismanagement of land, oil, and gas that once again resulted in the loss of a substantial amount of wealth for Native Americans. The American Indian community has been left to pick up the pieces remaining after poor governmental decisions have 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 Society 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 selfdetermination. 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 selfdetermination culminated in the passage of the Indian Self-Determination and Educational Assistance Act in 1975. This act permitted tribes to acquire funding from the federal government that would allow them to develop various programs in health care, education, and housing.11 Tribal leaders were allowed to draw on their own knowledge 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 governments not 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 Jonathan 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.

10

2. Strengths and Challenges 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.
Figure 2.1

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

Source: U.S. Census Bureau.

11

Challenges to Native American Advancement: The Recession and Native America

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 white Americans 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 with an increase in the observed Native American populaFigure 2.2

tion, particularly between 1970 and 1980 when the Red Power movement appears to have encouraged Americans to reclaim their American Indian identity. However, the Census has consistently undercounted minorities. It is estimated that for the 1990 Census, American Indians were undercounted by 4.5 percent and that Native Americans on reservations 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

Source: U.S. Census Bureau.

12

2. Strengths and Challenges of Native America

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 2.9 million 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 states with the highest proportion of single-race Native Americans were Alaska (12.9 percent), New Mexico (9.3 percent), and Oklahoma (7.8 percent).20

13

Challenges to Native American Advancement: The Recession and Native America

b. Educational Attainment
Native Americans are making significant gains in high school graduation rates, with three-quarters of 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.
Figure 2.3

However, Native Americans are only half as likely as the rest of the population to attain a bachelors degree.21 Though Native American college graduation rates increased between 1990 and 2000 at a slightly higher rate (23.7 percent) than the overall 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.

Source: U.S. Census Bureau.

14

2. Strengths and Challenges of Native America

Figure 2.4

Source: U.S. Census. Bureau.

15

Challenges to Native American Advancement: The Recession and Native America

c. Health and Health Care

Census data collected between 2004 and 2007 show that other than Hispanics, American Indians and 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 to provide health services to Native Americans. However, the service is underfunded and IHS
Figure 2.5

facilities are, on average, 34 years old, overcrowded, and equipped with medical and laboratory instruments that may be six or more years out of date. 22 In addition, many Native Americans, particularly those living outside reservations, have difficulty accessing the primarily reservation-based IHS facilities. 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 percent more likely to have a stroke, and 20 percent more likely to have heart disease.25

Source: U.S. Census Bureau

16

2. Strengths and Challenges of Native America

d. Economic Well-Being on Reservations

Real per-Capita Income Reservations are the most impoverished and economically weak Native American communities.
Figure 2.6

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 Americans on reservations to attain a per-capita income equal to just one half that of the average U.S. resident.

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 on American Indian Economic Development, 2005)

17

Challenges to Native American Advancement: The Recession and Native America

Poverty There was a notable improvement in poverty rates for American Indians and Alaska Natives living on reservations and trust lands between 1990 and 2000. The percentage of people in this category living in poverty was nearly cut in half, from 47.3
Figure 2.7

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 still more than twice the national average.

Source: U.S. Census Bureau

18

2. Strengths and Challenges of Native America

Unemployment For American Indians and Alaska Natives living on reservations and trust lands, the 1990s also saw a drastic decrease in unemployment rates. As with poverty, 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
Figure 2.8

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, American Indians on tribal lands still had an unemployment rate double that of Americans as a whole.

Source: U.S. Census Bureau

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Challenges to Native American Advancement: The Recession and Native America

e. Economic Well-Being on and off Tribal Lands

Real Median Household Income Real median household incomes among American Indians and Alaska Natives in the early twentyfirst 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, selfFigure 2.9

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 only slightly higher than African-Americans, the racial group with the lowest household income. Overall, Native American incomes are two-thirds of nonHispanic white incomes and just over half of Asian American incomes.

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.

20

2. Strengths and Challenges of Native America

Poverty Wherever they happen to reside, on tribal lands or not, Native Americans are still disproportionately living in poverty. The total Native American population 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.
Figure 2.10

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 Native Americans 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 decrease 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.

Source: U.S. Census Bureau.

21

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

wo important statistical measurements of economic activity among Native Americansfamily 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 expenditures for Native Americans under President Reagans New Federalism policy. Promoted as a way of further emphasizing Indian 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.

22

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

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 decrease 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 contribution 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 percapita spending for the United States as a whole. By 1985, under Reagans New Federalism program,
Figure 3.2

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, for example, $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 American 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 communities 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 progress and, at worst, a reversal of that progress.

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

23

4. Gambling on Economic Advancement

n 1988, Congress passed the Indian Gaming Regulatory Act (IGRA), which permitted gaming on Indian reservations and allowed such activity to be regulated by the tribes on their respective lands.29 After years of controversy and conflict between Native Americans and state and federal governments, many tribes attained legislative victories 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 in gaming as of 2006, according to Michael E. Roberts,
Figure 4.1

president of the First Nations Development Institute. 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 Creator 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

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 on American Indian Economic Development, 2005).

24

4. Gambling on Economic Advancement

Many of the tribes that engage in gaming operate 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, gaming tribes have not advanced significantly in socioeconomic 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 enacted, 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 generated 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 nongaming 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 conditions. For several different social and economic indicators, non-gaming tribes actually made more significant socio-economic strides from 1990 to 2000 than gaming tribes.

25

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 Mohegan Sun Casino in Connecticut, for example, saw
Figure 5.1

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 makes them even more vulnerable to economic downturns.

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 on American Indian Economic Development, 2005).

26

5. The Recession and Future Prospects

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, increased further 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 has collapsed 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, maintenance, 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.

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6. Paths to Ending Structural Inequality for Native Americans

n order to improve the socio-economic conditions 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 Americans in national statistics. Far too often, Native American data is excluded from Census studies because the group is considered to be of an insufficient 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 reports. The Census Bureau should increase outreach to Native households to increase data collection and create an accurate analysis of Native Americans that can be published alongside data for other minorities. The Bureau of Labor Statistics must also include onreservation unemployment rates so that the employment status of all citizens of the nation is more accurately reflected in the monthly unemployment numbers. Increased federal spending for Native American communities is another essential pathway to improved socioeconomic conditions for the group. As David Vinje found in his study of the 23 largest Indian 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 socioeconomic gains. On the other hand, the 1980s, a period in which federal spending for Native Americans 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 Americans. 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 However, 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 improve health care for Natives. In 2003, per-capita expenditures 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,

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6. Paths to Ending Structural Inequality for Native Americans

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 take tribes 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 allocating 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 support state 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 economically weakest parts of America, which most often include tribal lands. Of the ten poorest counties in the United States, eight contain Indian reservations within their boundaries.47

nvesting in job creation is essential to making American Indian lands places of socioeconomic dynamism rather than rural ghettos of concentrated poverty. Investment in job creation will also help tribes retain their most highly educated members, who often see few economic opportunities on reservations and leave to work elsewhere. This brain drain can actually create a net loss in overall educational attainment on tribal lands. Federal grants to tribes could provide incentives for highly skilled Native workers to maintain ties with their reservations, and could prove one of the most effective means of strengthening tribal communities.

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Conclusion: Returning to Native American Values and Valuing Native Americans

ative Americans will suffer disproportionately during this recession, yet the longterm solutions to the nations economic problems might be found in this very same community. 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 sustainable 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 immediate 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 forefront of our nations investment into sustainable longterm 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 treatment of the American Indian people. As the nation works to reverse todays economic decline, it must finally work to repair the stains of the past.

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Endnotes
1

The data analyzed in this report refer only to self-identified, single-race Native Americans, unless otherwise noted. 2 Analysis of 2000 Census data by the Social Science Data Analysis Network, http://www.censusscope.org/us/chart_popl.html 3 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 Under U.S. Policies of Self-Determination (Oxford University Press, 2008), p. 96. 6 Ibid. 7 Ibid. p. 4 8 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 Accuracy 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 2000 Special 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 Change between the 1990 and 2000 Census (Harvard Project on American Indian Economic Development, 2005). 17 Ibid. 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-Indiansand-Alaska-Natives.pdf, accessed July 2009. 24 U.S. Department of Health and Human Services, Office of Minority Health, American Indian/Alaska Native Profile, http://www.omhrc.gov/templates/browse.aspx?lvl=2&lvlID=52, accessed July 2009. 25 Ibid. 26 U.S. Department of Education, Institute of Education Sciences, Indicator 1.6: Individuals, Families, and Children 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.

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Endnotes

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.nanticokelenape.info/nongaming.htm, accessed Aug. 2009. 31 Harvard Project on American Indian Economic Development, The State of Native Nations, p. 149. 32 Ibid. 33 Associated Press, For Some Indian Tribes, Casinos Are a Bad Bargain, republished April 6, 2008 on the News for 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/indiangaming-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. 45 Ibid. 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 the Senate 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. 49 Ibid. 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.

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Publications on the Racial Wealth Divide

Available online at www.ips-dc.org/inequality. State of the Dream 2009: The Silent Depression January, 2009 Published by United for a Fair Economy In this years report, we found that people of color are experiencing a silent economic depression. Its silent because its going unnoticed, unacknowledged, and unaddressed and yet the evidence is striking. We detail additional evidence that shows the current racial economic inequity, including poverty rates, wealth and assets and economic mobility. 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 success as their white counterparts. 40 Years Later: The Unrealized American Dream April, 2008 Published by the Institute for Policy Studies This report examines the progress in and challenges to economic equality between African 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. The report concludes that despite educational advances, economic equality for African Americans is still a dream, not a reality. State of the Dream 2008: Foreclosed January, 2008 Published by United for a Fair Economy To commemorate the 79th birthday of Dr. Martin Luther King Jr., the Institute for Policy Studies and United For A Fair Economy co-sponsored a forum and prepared this report on the historic racial wealth divide, what progress has been made in bridging this divide since the death of Dr. King, and the impact of our contemporary subprime housing crisis on this divide.

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