|Posted by C. Matthew Hawkins on April 28, 2013 at 3:30 PM|
It is understandable why Black Americans take pride in the historic milestone of participating in the election of the nation's first African American president 5 years ago, and his re-election last year.
Barack Obama's election was a serious blow to the ideology of "white supremacy", which used to be the conventional "wisdom" in American social and political life. The election of Obama also challenged long-standing assumptions, in the United States and abroad, about what Americans "look like". Americans, and the rest of world, in the 21st century know that this nation is finally embracing its multi-racial and multi-culture character. This may be symbolism, but it is also progress.
We should not, however, let social and political symbolism and progress confuse us about the status of our progress in terms of our ability to participate in the American dream. When I use the term "American dream", I do not mean a dream is simply based on having money and material things, but it is important to have access to financial resources and property in order secure those other non-material aspects of the dream, such as education, health care, expression of ideas and, more fundamentally, survival.
It is in this area, the arena of access to financial resources and property, that African Americans are ironically slipping behind, even as we are achieving greater visibility in social and political arenas.
Recently the Urban Institute released yet another study of the growing wealth gap between whites and non-whites in America. You may want to read the full document, titled "Less Equal: Racial Disparities in Wealth in America". You will also find a summary that appeared in the New York Times on Sunday helpful for the putting the study into context.
The study points out that the racial wealth gap is bigger, deeper, and more significant than the income gap because the wealth gap indicates the ability of households to weather hard times and to invest in the future for one's family and community. Income gaps may fluctuate from economic cycle to economic cycle, but gaps in wealth reverberate for generations.
It is in this context that the recent figures are so disturbing. Since the Great Recession of 2008 to 2010, White families have moved from being four times as wealthy as Non-White families, to now being six times as wealthy. That means non-Whites are increasingly more vulnerable to a personal financial crisis, and are finding it more difficult to send children to college. Indeed, non-Whites are increasingly finding it more difficult to even have a cushion to ensure that they will be able to meet basic expenses from week to week. Moreover, most Americans in the bottom 80% of income brackets are facing tougher times, but loss of wealth since 2007 has hit non-White communities particularly hard.
And what about retirement? The nation as a whole faces a looming retirement crisis as aging Baby Boomers have now crossed the 65 year-old threshold, and many are not only retiring without savings, they are retiring with a load of debt. This is a national problem, but it is even more severe in non-White communities.
The Urban Institute reports that from 2007 to 2010 Black American family retirement accounts shrank by 35%, compared a 9% shrinkage in the retirement accounts of White families. Over the past few years the growing vulnerablity of Black families to bad economic times has taken its toll and it shows no signs of letting up, given the current policies of budget cuts, sequestration and austerity measures.
Why does any of this matter, given our reasonable desire to celebrate our cultural, political and social victories under the Obama administration?
As the former Commissioner of the FDIC, Shiela Bair, points out, the policies under the Obama administration -- quantitative easing (pumping more money into the financial system), buying up toxic assets without forcing the banks to restructure and absorb the costs, having political appointees as regulators to enforce the Dodd-Frank financial reforms, etc -- have created a real recovery for the richest people in America, but for the rest of us, the lower 80% of income brackets, we are seeing our wages stagnate or decline, and our employment status is increasingly insecure -- or non-existent -- in this "jobless recovery".
This is significant because since 2009 the Congressional Black Caucus has been trying to prod the Obama administration to acknowledge that this economic crisis has not affected all communities equally, and that there must be specific programs to address the more severe crisis that is hitting non-White communities and that continues to grow worse.
For its part, the Obama administration has been steadfast in its rhetoric and its policies that argue that "a rising tide lifts all boats". But the boats in the African-American community have holes that need to be patched.
Even as we celebrate our social and political gains, we must not allow them to overshadow the reality of a growing racial wealth gap.
What effects have you seen from the decline in the housing market on your neighborhood?
Categories: Economics and Wealthbuilding