US Elections

The economy isn't colour blind

By Emily McCosker in Sydney, Australia

14 September 2011

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The global financial crisis has disproportionately affected the African American and Hispanic communities. According to a recent report from the Pew Research Center, the median net worth of white households dropped by 16 per cent between 2005 and 2009, and 53 per cent for blacks and a massive 66 per cent for Hispanics over the same period. The report blames plummeting house values as the main cause for these declines in all communities. It also noted that whites are more likely than blacks or Hispanics to have investments in the share market which has, despite the recent upheaval, rebounded significantly since 2009. By contrast, housing values have continued to stagnate, making it likely that the black and Hispanic communities are still suffering more than the white community.

The discrepancy between the white majority and black and Hispanic minorities becomes even more glaring when you look at the figures for median net household worth, which show that the median white household has 20 times more wealth than black households and 18 times more wealth than Hispanic households.

As can be seen in the graph below, wealth inequality in 2009 was much higher than it has been at any time since 1984, the first year the Census Bureau published wealth estimates by race and ethnicity.

In his 2005 book, The Hidden Cost of Being African American, Thomas Shapiro used individual case studies and analysis of economic data to show how a lack of family wealth and assets impacts on the ability of African Americans to purchase homes and send their children to high performing schools, resulting in the entrenchment of inequality. Economic exclusion has wider impacts on minority communities, like increased rates of teenage pregnancies and incarceration [PDF], to name just a few.

The American economy is not colour blind and wealth inequality is rapidly replacing civil and political rights in the battle against race discrimination. As President Barack Obama said in 2008:

It matters little if you have the right to sit at the front of the bus if you can’t afford the bus fare; it matters little if you have the right to sit at the lunch counter if you can’t afford the lunch.

Tags: African Americans, Guest Post, Hispanics, Latinos, Pew Research Center, Race, Thomas Shapiro

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