Behind virus and protests: A chronic US economic racial gap
By Paul Wiseman
Associated Press
June 8, 2020
WASHINGTON — The United States has been here before, staring into the deep chasm that divides white and black Americans.
It
happened after cities burned in 1967, after Los Angeles erupted with
the 1992 acquittal of police officers who beat Rodney King, after the
2014 police killing of Michael Brown in Ferguson, Missouri.
After
those upheavals came talk of change — of reforming policing, yes, but
also of expanding economic opportunity to black Americans who have been
disproportionately left behind in one of the world’s richest countries.
Yet despite big pledges and high hopes, economic progress has come
slowly, if at all, for black America.
African
Americans still earn barely 60 cents for every $1 in white income. They
have 10 cents in wealth for every $1 whites own. They remain more than
twice as likely to live in poverty. And they’re about as likely to own a
home as they were when Richard Nixon was president.
Now,
demonstrators are out in the streets again, this time to protest what
happened in Minneapolis to George Floyd, dead after a police officer
pressed a knee into his neck for eight minutes and 46 seconds.
Once
again, racial inequality underlies rage and despair, especially because
the unrest coincides with an economic and health calamity, one that’s
falling hardest, yet again, on African Americans.
“We’ve
got a perfect storm,” said Cecelia Rouse, professor of economics and
public affairs at Princeton University. “COVID is wreaking economic
havoc” for African Americans.
Black
Americans are far more likely than whites to die of COVID-19. They work
disproportionately in low-paying service jobs — the ones that were
slashed when restaurants and movie theaters closed as a health
precaution and customers stayed away from hotels and airports.
“We’ve been blindsided by the pandemic,” said Imani Fox of the Washington community group ONE DC.
Black
workers who remain employed are more likely to work as front-line
workers in warehouses, grocery stores and takeout eateries — jobs that
leave them exposed to the virus.
“People
are mad as hell,” said Monica Lewis-Patrick, president of the community
group We the People of Detroit. “We can’t be the wealthiest nation or
declare ourselves the wealthiest nation in the world and still have
these major inequities and disparities that are glaringly based on
race.’’
Rouse
said she has reread portions of the Kerner Commission report, issued in
1968 to call for reform in the wake of the urban unrest of the late
‘60s. “It was so depressing,” she said. “What has changed?’’
A
month after the Kerner report, for example, Congress passed the Fair
Housing Act, meant to eliminate housing discrimination. Assessing the
act on its 50th anniversary two years ago, Margery Turner of the Urban
Institute wrote that African Americans and other minorities continued to
face discrimination, though the “most blatant″ forms of bias had
declined.
“We
still live in starkly segregated neighborhoods,” she wrote, noting that
the typical white Americans lives in a neighborhood that is 75% white
and 8% African American; a typical black American lives in a
neighborhood that is 35% white and 45% black.
The
coronavirus recession is especially disheartening because African
Americans finally seemed to be making headway in the aftermath of the
Great Recession of 2007-2009. The unemployment rate for black Americans
hit a record low last fall. And black wealth, decimated by the financial
crisis of the late 2000s, had in recent years outgrown white wealth.
Then came COVID-19.
“When
something goes wrong for all American workers, it’s going to
disproportionately affect African Americans, who are often the most
fragile in the economy,” said Democratic Sen. Cory Booker of New Jersey.
Amid
the anger and anguish is optimism that policymakers will use this
moment to find ways to narrow the economic gap between black and white
Americans. Among the hopes is that political leaders can deliver reforms
to America’s economic system: Paid sick leave. A higher federal minimum
wage. Perhaps even direct payments to the needy — test-run, perhaps, by
the $1,200 stimulus checks the government sent to many Americans as the
economy shut down in the face of the pandemic.
But the United States has had watershed moments before. And the big changes didn’t come.
Here’s a look at America’s economic racial divide and how it has and hasn’t changed after decades of protests:
INCOME
From
1968 to 2018, median income for black households, adjusted for
inflation, rose 37% from $30,155 to $41,361. In percentage terms, that
outpaced the 31% growth in household income for whites (from $51,138 to
$66,943), according to the Census Bureau. But black households still
earn just 62 cents for every $1 earned by white households.
The
income gap remains wide even though African Americans have vastly
upgraded their educational attainment: The proportion of black Americans
with a high school diploma has surged from 54% in 1968 to 92% in 2018.
The share with a college degree rose from 9% to 23% over that period,
according to government figures compiled by the Economic Policy
Institute.
Yet
black people are still more than twice as likely as whites to live in
poverty. Their poverty rate has dropped from 55% in 1959 to 35% in 1968
to 21% in 2018. The white rate has barely budged at around 10%. The
official poverty rate may understate African Americans’ progress because
it excludes the effect of non-cash government programs such as food
stamps and Medicaid.
JOBS
The
unemployment rate for African Americans has typically hovered around
twice the rate for whites. But beginning last year, the record-breaking
economic expansion that began in June 2009 had finally begun to pay off
for African Americans. Their jobless rate dropped from 16.8% in March
2010 to an all-time low of 5.4% in August last year.
That
progress ended abruptly once the coronavirus recession wiped out tens
of millions of jobs in March and April. Black workers,
disproportionately laboring in low-wage service jobs, were less likely
to be among the fortunate: The office workers who could keep their jobs
while working from the safety of home. African Americans were likelier
to either lose their jobs or to work as essential front-line employees
who are more vulnerable to the virus.
On
Friday, the government issued a surprisingly upbeat jobs report for
May: The national unemployment rate unexpectedly dropped from 14.7% to
13.3%. But the jobless rate for African Americans ticked up, from 16.7%
to 16.8%, the level where it had been 10 years earlier.
WEALTH
Black
Americans face an even bigger long-term problem than lagging incomes
and higher unemployment. They have struggled to build wealth — home
equity and investment portfolios — that could be tapped in times of
need, used as collateral for loans to start a business or passed on to
children.
“Income
helps you pay your bills,” said Olugbenga Ajilore, senior economist at
the liberal Center for American Program. “Wealth moves you from poverty
to the middle class to the upper class.’’
The
median black family has wealth of just $17,200 — perhaps enough to buy a
car — versus $171,000 for the median white family. The wealth gap
persists even for African Americans in the top 10% of U.S. incomes:
Their wealth comes to $343,160, less than one-fifth of the $1.79 million
for whites in the top 10%, according to government numbers compiled by
the Brookings Institution.
One
ongoing culprit was the housing bust of the late 2000s. Commerce
Department figures compiled by the Urban Institute show that black
homeownership rose from 41.8% in 1970 to 47.3% in 2000 before being
swept away by the financial crisis and the ensuing recession. As of
2015, black homeownership was 41.2% — lower than it had been 45 years
earlier and far below the 71.1% for whites.
In
February, researchers at the Brookings Institution reported other
reasons for the wealth deficit: African Americans inherit far less money
than whites. Even those who become top earners are likelier than whites
to fall out of the ranks of the rich. And they are more likely to have
to provide financial help to friends and family.
As
a Democratic presidential candidate, Sen. Booker pushed a plan for
“Baby Bonds” to provide $1,000 to every American child at birth. After
that, they would receive up to $2,000 a year, depending on their family
income. The idea would be to create a nest egg that could eventually be
used to finance a college education or buy a home.
Bradley
Hardy, a professor in American University’s School of Public Affairs,
said that researchers and activists are working on plans like Booker’s
to narrow the divide between black and white Americans, between rich and
poor.
The current protests could provide momentum for those efforts.
“It’s absolutely an opportunity,” Hardy said. “And, yes, it could be squandered.’’
