Monday, May 19, 2014
The Economic, Wealth, and Employment Gaps Shackling African Americans
A 2014 study released by the Center for Global Policy Solutions and the Network on Race and Ethnic Inequality at Duke University reports that African American households are beyond broke. The study shows that the combined assets of every African American household in the U.S. including wealthy athletes, media moguls, and business people is not enough to lift the average net worth of African Americans beyond a little more than a nickel for every dollar held by whites.
Since the 1960s, the difference in household income between African American and white households expanded from $19,000 to $27,000. Put another way African American households on average earn just 59% as much as their white neighbors did. African Americans did narrow the gap in the prosperous early 2000s, when they earned 65% as much as white households, but the Great Recession made wiped out most those gains due in part to proprietary loan tactics.
Wealth derives from acquisition of money. It does not take a mathematician to conclude that the one with the dollar will always have a better opportunity at wealth than the one with the nickel. African Americans are shortchanged repeatedly when it comes to earning their way to wealth. Black unemployment for more than a half-century running has been doubled the rate of Whites. Black unemployment is the first hurdle facing African Americans in their pursuit of wealth.
It is of no consequence African-Americans are over-represented in the lowest earnings categories and under-represented in the highest earning ones. Most African Americans that do manage to achieve "gainful" employment often experience the unspoken racial gap in pay, and non-merit promotion criteria. Blacks remain disproportionately represented in occupations that do not provide fringe benefits. All of these factors represent structural inequities that oppress African-Americans at the margins of the economy.
The wealth gap between minorities and whites has not narrowed over the past three decades, reports the Urban Institute. From 1983 to 2010, average family wealth for whites has been about six times that of blacks and Hispanics. The gap in actual dollars increases as average wealth increased for both groups.
French economist Thomas Piketty has warned in his best-seller Capital in the Twenty-First Century that inequality is likely to grow. That is because capitalism tends to reward the owners of capital with a greater and greater share of the economy's output, he says. Meanwhile, wage earners get a smaller and smaller share.
Then there is the investment fallout among African Americans. If one is to get into the investment market, they first need something to invest with. The average 401(k) balance for black workers enrolled in 401(k) plans in 2010 was $7,557, nearly half as much as white workers and barely unchanged from 2007. Moreover, for those blacks who are saving, they are 9% (four times) more likely to dip into their 401(k) contributions than whites, according to a 2012 report by AON Hewitt.
Where there is a lack of wealth there is always an abundance of poverty. Black poverty fell quickly between 1959 and 1969, from 55.1 percent to 32.2 percent. The drop in poverty tapered off after that. In 2011, 27.6 percent of black households were in poverty - nearly triple the poverty rate for whites.
I have seen these facts all around the Internet in some form or the other. They tend to ignite a diverse amount of reactions from those that read them. There are conservatives that attempt to charge the biased economics of African Americans back to the African American community. Ideologies of uniformed racists hold entitlement dependency and fallout as the reason behind the voids in African American wealth and wage numbers in comparison to whites. Left wing subscribers acknowledge there is more than one dynamic that is amiss when it comes to the economic landscape of African Americans in general. Undeniable signs of unchanging times. Observations and opinions do not trigger change and change is what will right this bleak plight.
That change will evolve from effective political social, educational and of course economic reforms spearheaded and driven to the biased roots of the problems. Until that, change is in full tilt momentum African Americans face a future of surviving as opposed to living.