DCentric » Recession http://dcentric.wamu.org Race, Class, The District. Wed, 16 May 2012 20:20:35 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 Copyright © WAMU Racial Wealth Gap Reaches Historic Levels http://dcentric.wamu.org/2011/07/racial-wealth-gap-reaches-historic-levels/ http://dcentric.wamu.org/2011/07/racial-wealth-gap-reaches-historic-levels/#comments Tue, 26 Jul 2011 15:13:18 +0000 Elahe Izadi http://dcentric.wamu.org/?p=9088 Continue reading ]]>

MoneyBlogNewz / Flickr

The wealth gap between whites and minorities has always been wide, but the recession has deepened the division to a record level.

The racial difference in wealth — how much a person owns minus any debt — is the most severe its been since the government began publishing the data in the 1970s, according to a new Pew Research Center report.

Members of the black middle class have seen many of the economic gains they’ve achieved over the past few decades erased or reversed during the recession, and black households have much less wealth than other groups. But Hispanic households experienced the biggest drop in household wealth during the recession:

Median Net Worth of Households
2005 2009 Percentage Change
White $134,992 $113,149 -6 percent
Black $12,124 $5,677 -53 percent
Hispanic $18,359 $6,325 -66 percent
(Source: Pew Research Center)

The housing crisis is one of the principal causes of the gap widening, according to the report. Hispanics and blacks had more of their wealth tied up in home equity, so when home values dropped or homes went into foreclosure, they saw much of their wealth disappear.

The study examined wealth between 2005 and 2009. Since then, housing prices have risen, particularly in D.C. But an increased home value may not be enough to offset lasting effects of the recession on minorities, as NPR reports:

Tom Shapiro of Brandeis University, who has studied the racial wealth gap for years, says he’s concerned about the long-term impact. He thinks the wealth gap will likely grow even more, unless the economy turns around soon.

“If a family doesn’t have enough for a safety net for itself, it can’t think about moving forward or moving ahead,” he says.

That means fewer resources for things like education or buying a house or starting a business. Shapiro says that only puts the average minority family further behind, and less able to weather the next economic storm.

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Five Factors Causing the ‘Decimation’ of the Black Middle Class http://dcentric.wamu.org/2011/07/five-factors-causing-the-decimation-of-the-black-middle-class/ http://dcentric.wamu.org/2011/07/five-factors-causing-the-decimation-of-the-black-middle-class/#comments Mon, 11 Jul 2011 18:49:28 +0000 Elahe Izadi http://dcentric.wamu.org/?p=8646 Continue reading ]]>

Alex Wong / Getty Images

The Rev. Jesse Jackson (L) hold the hands of Angela Walker (R) in Suitland, Md. after a rally against foreclosures in the hard-hit, majority-black county. Walker is recently unemployed and facing foreclosure.

The recession from 2007 to 2009 has hit nearly all sectors and communities in the American economy, but minorities, and particularly African Americans, may have been affected the most. Jesse Washington’s recent Associated Press story about how the recession reversed many of the economic gains that took the black community many years to attain contains some grim statistics: in 2009, the average black household had only 2 cents for every dollar of wealth held by the average white household, and in April 2010, black male unemployment hit its highest point since the government began tracking it in 1972.

“History is going to say that the black middle class was decimated,” Maya Wiley, director of the Center for Social Inclusion, tells Washington. “But we’re not done writing history.”

What has led to such extreme losses? Here are five factors contributing to the “decimation” of the black middle class:
1. Wealth versus income

The wealth gap between whites and blacks in the same socioeconomic classes had quadrupled in the decade preceding the recession [PDF]. Wealth is how much a person owns, minus any debt. So even if African Americans had made strides to hold jobs with incomes that took them into the middle and upper classes, as a whole, their accumulated wealth wasn’t on par with their white counterparts.

For instance, in 2007, about 63 percent of black Americans’ net worth was tied to their housing, compared to 38.5 percent for white Americans . A loss of income, depreciated home values or losing a home to foreclosure — all of those have a greater power to knock you out of your socioeconomic class if you don’t have some accumulated wealth to rely upon.

2. Foreclosures
It’s been well-documented [PDF] that sub-prime mortgage lending, which contributed greatly to the foreclosure crisis, targeted minority neighborhoods, regardless of class.

Locally, the area that was hit the hardest by the foreclosure crisis was Prince George’s County, the country’s wealthiest majority black county. In Prince George’s County, half of the county’s sales have been foreclosure-based this year.

3. Loss of government jobs

The public sector has cut the most jobs out of any industry this year, and black people hold a disproportionately high number of government jobs [PDF]. For years, African Americans have often relied upon government jobs as alternatives to the private sector. They presented a way to circumvent discrimination that prevented them from private sector jobs.

4. College-educated and unemployed

For many Americans, a college degree translates to better job opportunities and increased job security. And although that’s diminished during the recession, college-educated African Americans are more likely to be unemployed than college-educated white Americans. According to the AP story:

In 2007, unemployment for college-educated whites was 1.8 percent; for college-educated blacks it was 2.7 percent. Now, the college-educated unemployment rate is 3.9 percent for whites and 7 percent for blacks.

The situation is even worse for recent college grads who don’t have years’ of experience in the workforce to help them: in 2010, the jobless rate for black college graduates under 25 was 19 percent, compared to 8.4 percent for white men.

5. The ‘old boys network’ and discrimination

It’s only been a few decades since anti-discrimination laws have been passed and thoroughly enforced, but it took even longer for the effects to trickle through the black community, Wiley tells Washington. That means fewer generations’ of minorities have been able to climb corporate ladders.

Chris Wilder, a 43-year-old black unemployed journalist who fell victim to losses in the media industry, describes the situation to Washington this way:

“It’s definitely harder for black people to get jobs… With the economy as bad as it is, people are hiring nephews and family friends and friends of friends. It’s hard for black people to break that cycle. We don’t own or even run the big companies.”

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Are White Men this Recession’s Quiet Sufferers? http://dcentric.wamu.org/2011/04/are-white-men-this-recessions-quiet-sufferers/ http://dcentric.wamu.org/2011/04/are-white-men-this-recessions-quiet-sufferers/#comments Wed, 20 Apr 2011 15:39:16 +0000 Elahe Izadi http://dcentric.wamu.org/?p=5856 Continue reading ]]> This week’s Newsweek coverage story “Can Manhood Survive the Recession?” paints a grim picture for educated, white men:

Through the first quarter of 2011, nearly 600,000 college-educated white men ages 35 to 64 were unemployed, according to previously unpublished Labor Department stats. That’s more than 5 percent jobless—double the group’s pre-recession rate. That might not sound bad compared with the plight of younger, less-educated workers and minorities, but it’s a historic change from the last recession, when about half as many lost their oxford shirts. The number of college-educated men unemployed for at least a year is five times higher today than after the dotcom bubble.

Flickr: Wirawat Lian-udom

White men are faring better than most in this recession.

If the idea is to have a competition over who has it the worst, the numbers make it quite clear: that’s one contest white men aren’t going to win. According to the U.S. Department of Labor, the unemployment rate among whites was 8 percent in January — that’s almost half of what it was for blacks, 15.7 percent. Latinos didn’t fare well either with an unemployment rate of 11.9 percent.

Here in D.C., the unemployment rate citywide was 9.6 percent in January. In predominately black Wards 7 and 8, it ranged between 20 to 18 percent, and in predominately white Ward 3, it was 3.6 percent.

All of that isn’t to say that the suffering of an individual, out-of-work person is any more or less important than that of anyone else — it just puts the state of an entire group into context. And a deeper look reveals unemployment rates are higher for both young black and white men than their older counterparts: white men 25 to 34 years old had a 9.8 percent unemployment rate during the first quarter of 2011, compared to 7.7 to 7.9 percent for white men 35 to 64. The rate is much higher among black men: 25 to 34 year olds had a 20 percent unemployment rate, compared to 13 to 17 percent for black 45 to 64 year olds.

The Newsweek piece points out what older educated white men are experiencing is something quite new for this group, and it’s something that marginalized people have endured for some time — not getting what you want, even if you’re qualified for it.

Many of these guys may be great on the back nine but totally lack the skill set to get them through anything like this, says Judith Gerberg, a Manhattan-based executive career coach. “If you went to the college of your choice, married the woman of your choice, and bought the house of your choice, you’ve never dealt with rejection. You’ve never had to develop fortitude.” She gives her clients a chart with all the hours of the day, because corporate types are used to having other people color-code their life. If not quite the Great Depression, it is certainly the Great Humbling.

Having those “choices” is called privilege. Strip that away and you end up with a group of depressed people, at least according to Newsweek’s poll: 66 percent of men in this demographic reported having bouts of depression. Now look at another study that found that blacks, more than any other group, remained optimistic during the downturn, despite being among the hardest hit group:

Analysts who study black prosperity say the optimism is rooted in long experience with hard times. They say that now many African Americans sense attention to their struggles at the highest levels of government, something that was not evident before the recession.

So sure, it’s bad for white, educated men, worse than maybe it’s ever been for them. But it’s bad for everyone — and maybe that’s what makes this recession so unique. In addition to calling this recession the Great Humbling, this may be the beginnings of the Great Equalizer.

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