by Jose Garcia
(Editor’s Note: Jose, who is the Associate Director of Research and Policy at Demos, will be one of the featured speakers on today’s Compact Forum Call at 1pm PST/4pm EST. RSVP by clicking here.)
The impact of the recent economic downturn has had a profound effect on the U.S. and global economy. While the troubles plaguing our economy have been devastating to Americans of all walks of life, communities of color and low income communities have been especially hard hit by the current recession.
Tough times are nothing new for communities of color. Economic insecurity has as much to do with 30 years of disinvestment in these communities as it does with today’s economic climate. Social investment policies in the past have failed to provide a hand up for families of color in the United States, creating a racial wealth gap that persists today.
In March 2009, in the midst of our current recession, the national unemployment rate was 8.5 percent. Among whites, between December 2007 and March 2009, unemployment rose from 4.4 percent to 7.9 percent—substantially lower than the rates experienced by African American and Latino workers, even during so-called “good times.” During the same period, the unemployment rate among African Americans and Latinos shot up from 8.9 percent and 6.2 percent, respectively, to 13.3 percent among African Americans and 11.4 for Latinos. And from 2000 to 2007, median income for Hispanic and African Americans declined—a total lost of $1,256 (2000 dollars) or $1,629 (2007 dollars), respectively. For whites, the median income declined a total of only $12 dollars, over the same period. It is no wonder that the median family of color owns only 15 cents in net assets for every dollar owned by the median white family.
The economic problems facing Americans of color have only been compounded by the wave of foreclosures, a direct result of the unfair, deceptive and reckless lending practices of the mortgage industry. The situation is so dire that within the African American community, United for a Fair Economy, a Boston based policy group, estimates that African Americans could experience the greatest loss of wealth since Reconstruction.
As we rebuild the economy, we have to do it in a way that is consistent with American values. It must be open and fair to all populations, so that no group is limited by the plan’s design or effects as we have seen in past policies. Failing to do so will only widen the economic gap and threaten to leave so many further behind as the nation tries to lift itself out of recession.