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Recession has Expanded Racial Economic Gap

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(NNPA) The notion that when Whites catch a cold, Blacks get pneumonia has been validated in two recent studies that show the economic gap between Whites and people of color has grown during the economic downturn.

That’s the conclusion reached by a Center for American Progress report titled, “The State of Communities of Color in the U.S. Economy” and by a State of the Dream report by United for a Fair Economy titled, “Austerity for Whom?”

“The Great Recession of 2007-2009 produced widespread employment losses for communities of color and White families alike – losses that have yet to be overcome amid the still tentative economic recovery,” the Center for American Progress study observed. “All U.S. households were severely hurt by the recession but communities of color experienced larger losses than whites. This also means that, as the economic recovery deepens and the labor market recovers, communities of color will have to climb out of a deeper hole to regain the same level of economic security as they had before the crisis.”

But there were significant variations even among people of color.

“Americans saw few economic gains during the last business cycle, with stagnant or declining homeownership and wages, high unemployment rates, and low employment rates even as the economy grew,” the Center for American Progress reported. “Latinos, in comparison, saw comparatively strong job gains that were reflected in other gains, particularly in homeownership, during the last business cycle. Those gains, though, were insufficient to provide a buffer for Latinos once the recession hit, leading Latinos to lose most of the ground gained during the previous business cycle [March 2001 to December 2007].”

Although the data showed Asian American employment and income was on par with Whites, that observation could be misleading because it relies heavily on figures for Chinese and descendants from India. Very little data was compiled on Vietnamese Americans or Cambodian Americans, two groups likely to be less affluent than Chinese and Indians.

According to data compiled by the Center for American Progress:

• The unemployment rate for African-Americans was 15.8 percent in the fourth quarter of 2010, compared to 12.9 percent for Latinos, 7.3 percent for Asian Americans and 8.7 percent for Whites.

• Homeownership rates for Blacks in the third quarter of last year was 45 percent, compared to 47 percent for Latinos and 74.7 percent for Whites.

• Racial and ethnic difference have stayed the same or worsened during the recession and recovery. Unemployment rates rose faster for African-Americans and Latinos than for Whites while homeownership rates fell faster. “Trends for poverty rates, health insurance coverage, and retirement savings also show widening gaps by race and ethnicity throughout the recession and recovery after 2007.”

United for a Fair Economy is a Boston-based non-profit organization that focuses on economic equality. It issues a “State of the Dream” report each year on Dr. Martin Luther King Jr.’s birthday.

“Four decades after the Civil Rights movement, Blacks still earn only 57 cents and Latinos earn 59 cents for each dollar of White median family income,” this year’s report noted. “The contrast is even starker for net wealth; that is, the total value of investments, savings, homes and other property minus any debt. Blacks hold only 10 cents of net wealth and Latinos hold 12 cents for every dollar that Whites hold.”

As President Obama and Congress continue to address the nation’s economic woes, they should understand how seemingly neutral changes in Social Security and reducing the number of government employees will have a disproportionate impact on African-Americans.

For example, 59.1 percent of elderly African-Americans and 64.8 percent of elderly Latinos depend on Social Security for more than 80 percent of their family income. Among Whites, the figure is 46 percent. Without Social Security, 53 percent of elderly Blacks and 49 percent of older Latinos would live in poverty.

Largely because of limited job opportunities in the private sector over the years, Blacks have turned to government employment to advance their careers. According to the State of the Dream study, Blacks are 70 percent more likely to work for the federal government than Whites and 30 percent more likely to work in such public sector jobs as teachers, social workers, bus drivers and public health inspectors.

This is particularly true for Black males. Black males earn 57 cents to each dollar of White male earnings, the report states. In the public administration sector, however, Black males earn 80 cents to each dollar of White male earnings.

Whether working in the private or public sector, African-Americans are beginning to see an erosion of past economic gains.

In 1947, Blacks earned 51 cents to each dollar of White family median income. By 1977, African-Americans were earning 56 cents to each White dollar, a gain of 5 cents.

“Then, as the backlash took hold, progress slowed – and stopped,” the State of the Dream report noted. “By 2007, Blacks earned slightly over 57 cents (57.4 cents) to each White dollar, a gain of just one penny in thirty years. Two years later, as the Great Recession set in, Blacks lost a half-cent, ending at 57 cents to each White dollar of median family income.”

As Republicans and Democrats continue to spar over budget cuts, the State of the Dream report proposes more race-sensitive policies.

It says: “We must honor the legacy of Dr. King by enacting policies that can help to narrow the racial economic divide and bring the opportunity for prosperity to all Americans.”

George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com. You can also follow him at www.twitter.com/currygeorge.

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