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In recent years, with casinos going up on one reservation after another, many Americans have come to believe that Indian reservations are boom towns. Indeed, with Indian casinos bringing in about $6 billion last year, compared with $100 million in 1988, a few tribes are doing well. A visit to Pine Ridge is a striking reminder that most reservations remain places of bone-crushing poverty. And things are likely to get worse as the government cuts some of the welfare payments that are crucial to their economies. At least half of the 1.3 million American Indians who live on reservations are poor, the Bureau of Indian Affairs says, and 49 percent of the reservations' labor force is unemployed -- 10 times the national unemployment rate. The sickest economy is in Pine Ridge, the second-largest reservation, after the Navajo reservation in the Southwest. Here, just one in four adults has a job. People subsist almost entirely on federal, state and tribal government checks: paychecks and welfare checks, retirement and disability checks. Now welfare and housing aid is being cut. The casino, for all its travails, sets the standard for success. Alone among the businesses sponsored by the tribe, it makes a little money.
Nature has wrought a topographical masterpiece here, with expanses of butte-broken prairie and the Badlands' sinister white spires and menacing cliffs. But this immense terrain yields no oil or gas, coal or gold, crops or lumber. Its one readily exploitable natural resource is grass. The Bureau of Indian Affairs says 20,205 cattle, 753 bison and about 5,000 horses are grazing reservation lands. But that business, too, has stalled. Cattle prices have dropped to 60 cents a pound, compared with 90 cents four years ago. About 25,000 people -- no one has a reliable count -- live on the reservation in shacks, trailers and small, shoebox-like ranch houses subsidized by the government, the lots of many cluttered with the hulks of dead cars. No car here usually means no job because of the vast distances between home and work. Five years ago, Steele aspired to build three casinos with adjoining motels and restaurants. But that idea has faltered, as have all other missions to rescue the economy -- a ranch, a moccasin factory and a beef-packing plant. The prospects for yet another venture, a herd of choice cows to produce beef for Pequot casino restaurants, dimmed in May when the council suspended the man who had conceived it from his post as treasurer. The Census Bureau found eight years ago that Shannon County, S.D., which includes most of the reservation, was the poorest of the nation's 3,143 counties. Using different criteria in its latest survey, done four years ago, the bureau said Shannon County was the fourth-poorest. "It's like living at the bottom of a well," said Milo Yellow Hair, vice president of the tribe. "The great white father looks down and says, 'Here's a few dollars.' "
Now those dollars are dwindling. One new blow is the demise of the old welfare system. Wilbur Campbell, manager of the local office of the South Dakota Department of Social Services, said that through April, 128 of the 896 reservation mothers on welfare had lost their portion of their cash assistance because they had not gone to work. For a mother with one child, he said, that meant the check was cut to $78 a month, from $250. Another group of welfare recipients could begin losing out soon. The Bureau of Indian Affairs allots $38 a month in general assistance to the poor who do not qualify for family assistance. Robert D. Ecoffey, superintendent of the bureau's Pine Ridge agency, said that in the last couple of years, Congress had chopped his general-assistance budget to $714,000, from $1.7 million. He has not cut anyone off yet, he said, because he has been scrounging up the money from other accounts. Housing, primitive as it is, is also being squeezed. Paul Iron Cloud, director of the tribe's housing authority, said federal funds for home renovation had been cut by 20 percent last year. The wait for government-subsidized homes, about the only kind built here, stretches for four to five years. Families double and triple up; Steele has 4 adults and 18 children in his house. Now, Iron Cloud said, changes in federal policy could freeze out the poorest families, who pay no rent and get free utilities.
Poverty is taking an ever-bigger toll on health. Pine Ridge's infant mortality rate is almost three times the national average. Alcoholism, the scourge of indigent Indians, is as entrenched as ever. Doctors say that for the first time, they are spotting adult-onset diabetes, which usually strikes people past 40, in much younger patients. "I just saw a 12-year-old who has it," said Dr. David Mulder, the reservation hospital's chief of staff. Young people were not getting that five years ago, he said. "That's really frightening -- they're already insulin-resistant," he said. Yellow Hair explained: "A six-pack of soda costs less than a gallon of milk. So mothers get the soda and put it in their babies' bottles and shake it up to get the fizz out. It starts there." Kibbe Conti, the hospital's nutritionist, said that for these Northern Plains Indians, who have a genetic predisposition for diabetes, "pop is poison." The blame for these conditions goes all around. The roots of the troubles lie in political pandering among tribal leaders, who must run for election every two years, and in corruption, the 19th-century treaties that shunted the Oglalas off richer lands, the cuts in state and federal support, and discrimination. In early May, the Justice Department penalized the nearby First National Bank of Gordon, Neb., for charging the Pine Ridge Sioux interest rates that were 5 percentage points higher than the rate paid by white customers off the reservation.
But the Indians also blame themselves for their problems. Baptiste Poirier, 45, is an anomaly here. A tribe member and, like his wife, Pat, 39, a reformed alcoholic, he owns Big Bat's, a bustling convenience store, restaurant and Texaco gasoline station at the four-way stop in the center of the village of Pine Ridge.
He and his family also own a propane distribution business, a small, 150-head herd of cattle and, over the Nebraska line in Chadron, another convenience store. The Poiriers and their two sons, both students at an Indian college, live in a 16-by-55-foot trailer with a single concession to conspicuous consumption, a hot tub. "It's so hard to do business here," he said. "For every one Indian trying to get ahead, there's 20 trying to pull him down." In the nine years since he opened Big Bat's, Poirier said, last year was his worst. The store lost money. "You know what it was over?" he asked. "Employee theft. Merchandise and cash." Nationally, stores lose about 3 percent to employee theft, he said. "For me, it was well over 10 percent," he said. Scarce as jobs are here, Poirier said his employee turnover rate was 50 percent a year; a typical worker stays only six months. "Most of it is alcohol-related," he said. "There's so much hopelessness. They get drunk. They don't show up for work. I've got to let them go. "We don't have a business class, a middle class," Poirier said. "We have a political class. It's a welfare government. When you've got political people in charge, they're going to take care of the voters."
The tribe is the biggest employer, through services and business ventures. Among the ventures that have not panned out is the tribe's own ranching operation, Farm and Ranch Enterprise, which once received a federal development grant of $5.5 million. "That money was lost," Yellow Hair said. The ranch, with a herd of only 340 cattle, has little water, so the tribe installed a windmill-powered water pump. "But they put the windmill in a gulley, a place where there's no wind," said Melvin Lee Houston, an Oglala official. The farm survives on a $100,000 annual tribal subsidy. "It hasn't helped the people one bit," Steele said.
The three-year-old casino is off to a happier start. Its $1 million in profits, although only $38 per capita and far from enough to offset the decline in the government's aid, is distributed across the reservation, mostly to the elderly. It has also created jobs, including 129 for residents of the reservation. Thirty-four-year-old Amy Rodriquez, a pit boss who oversees the casino's four blackjack tables, earns $10.92 an hour, a very high wage around here. "I'm doing a lot better," she said. "I have a steady job. I have a car now." But the tribe's great expectations for casino gambling, like those of many tribes, are withering. Here, one obstacle is the construction dispute.
A bigger obstacle is the reservation's isolation. The nearest sizeable source of customers is Rapid City, S.D., 80 miles to the north. "The reality is," Yellow Hair said, "there is no population." For a short time recently, the reservation's hopes shifted to a newer enterprise. The tribe's treasurer, Chuck Jacobs, 41, proposed buying a herd of cattle that were not only free of growth hormones and other additives but also had an impressive genetic record of yielding choice beef. He would lease the bulls to reservation ranchers and, bypassing most middlemen, sell the beef to the Pequots and other wealthy tribes for their restaurants. A former all-Indian rodeo champion, Jacobs has a degree in regional planning from the University of Massachusetts and was awarded a MacArthur Foundation fellowship 10 years ago for analyses of reservation economies. Jacobs prepared an inch-thick plan including reams of correspondence showing the support of potential customers. In a close vote last December, the tribal council authorized Jacobs to proceed. He bought a foundation herd of 70 cows and 17 bulls for $187,000.
Today, the cattle are grazing at the Farm and Ranch Enterprise site, but what will become of them is unclear. Some tribal leaders, alarmed at the cost and the realization that the cattle would not be yielding much beef for some years, now deride the purchase as the "golden cows." The tribal council voted 8 to 8 earlier this month to suspend Jacobs. Steele, who defeated Jacobs among other candidates in the race for the presidency last year, broke the tie by voting against him. "People have a lot of questions about the viability of the whole project," Steele said. Ecoffey, of the Bureau of Indian Affairs, said, "He was the kind of guy we need to be leaning on."