Clay: African Americans need more economic opportunities
African Americans continue to face long-term and persistent inequities when it comes to employment, income and wealth, according to a report by the Congressional Black Caucus and the Democratic staff of the Joint Economic Committee. The report, Economic Challenges in the Black Community, says the recession took a greater financial toll on African-American households than it did on white households, increasing the disparity in wealth between blacks and whites.
Rep. Lacy Clay, D-University City, said the report shows that blacks have historically been given fewer chances to move ahead than whites and that policymakers need to be honest about the disparity and “change the old way of doing business, of always giving African Americans the lowest paying jobs, the worst education and the least opportunities to succeed in life.”
From 2007 to 2013, median net worth among black households fell by more than 40 percent as compared to 26 percent among white households. The report also says that, in 2013, the median net worth of white households was about $142,000 roughly 13 times greater than the $11,000 median net worth of black households.
The report also shows the current unemployment rate for black Americans, 10.1 percent, is more than double the 4.7 percent unemployment rate for white Americans. Even African Americans with a bachelor’s degree face greater difficulties than whites with a similar education; the unemployment rate for college-educated black workers stands at 5.2 percent compared to 2.9 percent for whites who have completed college.
Those same college-educated black workers also take home less pay than their white counterparts. The report indicates the median weekly earnings of African Americans with a bachelor’s degree and a full-time job earn roughly $900 compared to more than $1,100 for whites. That translates into a difference of more than $12,000 a year.
The report says blacks are almost three times as likely to live in poverty as are whites.
Housing is another area where Clay said African Americans have not been given the same opportunities as whites.
“You go back to the creation of the Federal Housing Administration and look at their policies that officially denied access to conventional mortgages by African Americans.” Clay said that starting in the late 1930s African Americans were not eligible for conventional mortgages. “They were all steered into high-price loans, into predatory loans. All of those things had a negative impact on the accumulation of family wealth,” said Clay.
The report says the decline in home values during the recession “was particularly devastating to black households.” It also notes that homeowner equity makes up a higher proportion of overall wealth for African American households compared to white households and that the rebound in home values has not kept pace with returns in the stock market, translating into a slower recovery for blacks.
Another finding of the CBC report is that “among the customers of mortgage companies that went out of business in 2007, black borrowers were three times more likely than white borrowers to have had a subprime mortgage.” It says those high-cost loans forced many homeowners into foreclosure. What's more, one-in-10 black homeowners who took out mortgages at the height of the housing boom eventually lost their home to foreclosure.
Measures of Economic Well-Being for African Americans in Missouri and Illinois
Figures provided by the CBC show:
- African Americans make up 11.6 percent of Missouri’s population. The unemployment rate for blacks in Missouri is 14.3 percent and 5 percent for whites.
- In Illinois, blacks make up 14.6 percent of the population, with an unemployment rate of 14.2 percent for blacks compared to 5.4 percent for whites.
- Median household income for blacks in Missouri is $31,900. For whites it’s $50,100. In Illinois the median income is $32,300 for black households and $62,300 for white households.
While the current divisive atmosphere in Washington does not bode well for bringing about quick solutions, Clay said he’s hopeful that “with all these Republican presidential candidates that want to talk about how they want to help middle-class Americans and lower income Americans, that there will be some common ground” they can all agree on.
The chairman of the Congressional Black Caucus, Rep. G.K. Butterfield, D-N.C., says two-thirds of the congressional districts with long-term impoverished African-American communities have Republican Representatives in the U.S. House.