{"id":176420292,"date":"2013-06-15T01:07:41","date_gmt":"2013-06-15T06:07:41","guid":{"rendered":"http:\/\/kalamu.com\/neogriot\/?p=176420292"},"modified":"2013-06-15T01:07:41","modified_gmt":"2013-06-15T06:07:41","slug":"economics-video-the-astonishing-collapse-of-black-household-wealth","status":"publish","type":"post","link":"https:\/\/kalamu.com\/neogriot\/2013\/06\/15\/economics-video-the-astonishing-collapse-of-black-household-wealth\/","title":{"rendered":"ECONOMICS + VIDEO: The Astonishing Collapse of Black Household Wealth"},"content":{"rendered":"<p>&nbsp;<\/p>\n<p>June 4, 2013<\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-size: large;\"><em>The Racial Wealth Gap Explained<\/em><\/span><\/h3>\n<p><iframe loading=\"lazy\" width=\"922\" height=\"692\" src=\"http:\/\/www.youtube.com\/embed\/CCQ9gh8EcY8?feature=oembed\" frameborder=\"0\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<h1><span style=\"font-size: xx-large;\">The Astonishing Collapse of <\/span><\/h1>\n<h1><span style=\"font-size: xx-large;\">Black Household Wealth<\/span><\/h1>\n<p><a href=\"http:\/\/www.africanglobe.net\/wp-content\/uploads\/2013\/03\/Black-People-Unemployment.jpg\"><img decoding=\"async\" loading=\"lazy\" title=\"Black People Unemployment photo\" alt=\"Black People Unemployment photo\" src=\"http:\/\/www.africanglobe.net\/wp-content\/uploads\/2013\/03\/Black-People-Unemployment.jpg\" width=\"300\" height=\"225\" \/><\/a><\/p>\n<p><span style=\"color: #000000; font-size: large;\"><em><strong>Black people suffer high rates of unemployment because of their failure to support Black owned businesses<\/strong><\/em><\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\"><strong>AFRICANGLOBE<\/strong>\u00a0\u2013 Despite growing economic inequality and mass unemployment, Washington is focused on austerity. Politicians and pundits debate how much to cut and how much revenue to raise rather than creating jobs or alleviating the suffering of millions of people. What also gets lost in the dominant discourse about the economy is the suffering of the Black community. The Great Recession has increased racial inequality and set back the modest socioeconomic gains of the civil rights movement.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">Recently, the Urban Institute released a\u00a0<a title=\"Urban Institute Study\" href=\"http:\/\/www.urban.org\/UploadedPDF\/412802-Less-Than-Equal-Racial-Disparities-in-Wealth-Accumulation.pdf\" target=\"_blank\"><span style=\"color: #000000;\">study<\/span><\/a>\u00a0on the racial wealth gap titled \u201cLess Than Equal: Racial Disparities in Wealth Accumulation.\u201d The study found that, while the racial wealth gap has existed for decades, it\u2019s drastically expanded during the last 30 years. It says the \u201caverage wealth of White families was $230,000 higher than the wealth of Black and Hispanic families in 1983.\u201d In that year, White families had an average wealth of nearly $300,000 in 2010 dollars. Wealth for all families increased, but not evenly.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">The 2007-2009 recession devastated the American economy and all families suffered decreasing wealth. However, African American and Latino families were hit the hardest. According to the study, \u201cbetween 2007 and 2010, Hispanic families saw their wealth cut by over 40 percent, and Black families saw their wealth fall by 31 percent.\u201d In comparison, White family wealth \u201cfell by 11 percent.\u201d<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">The average wealth of White families, in 2010, was $632,000 but $110,000 for Latino families and $98,000 for African American families \u2014 a wealth gap of over half a million dollars. Median wealth shows the same trend: $91,000 for White families versus $10,000 for Latinos and $11,000 for African Americans in 1983; for 2010, it\u2019s $124,000 for White families, $15,000 for Latino families, and $16,000 for African American families. These are all in 2010 dollars. Therefore, between 1983 and 2010, the racial wealth gap nearly tripled.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">The largest sources of wealth within Black and Latino communities are homes and retirement. White families derive wealth from their homes and many other sources, such as stocks and other financial investments. Moreover, one needs to have a certain level of disposable income to make such investments. Low-income families have to spend their income on rent, supporting their families, and other necessities just to survive. As a result, they don\u2019t have enough excess cash to save and invest. Those with higher incomes can afford not only to take care of themselves but have enough money to save and invest. Since White families have higher incomes than Black and Latino families, they have more money to invest, hence their larger amounts of wealth.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">The housing bubble seemed to provide an opportunity for Blacks and Latinos to build up wealth, enter the middle class, and achieve the \u201cAmerican Dream.\u201d However, this proved to be a ruse. Black and Latino communities were targeted by major banks, such as\u00a0Wells Fargo\u00a0and\u00a0JPMorgan Chase, for subprime mortgage loans, even if they qualified for normal prime loans. Subprime is a form of risky, high-priced lending to people with poor credit histories, giving the loans higher interest rates.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">According to a\u00a0<a title=\"NAACP Study\" href=\"http:\/\/www.naacplv.org\/lending.pdf\" target=\"_blank\"><span style=\"color: #000000;\">2009 NAACP study<\/span><\/a>, \u201ceven when income and credit risk are equal, African Americans are up to 34 percent more likely to receive higher-rate and subprime loans\u201d than Whites. This drove up home ownership in those communities but the foundation was on a flimsy stack of cards. When the housing bubble burst and the recession hit, Black and Latino communities were hit the hardest.<\/span><\/p>\n<h3><span style=\"color: #000000; font-size: medium;\">Slavery the Foundation of White Wealth<\/span><\/h3>\n<p><span style=\"color: #000000; font-size: medium;\">The Urban Institute study is not the only one to point this out. Other studies, such as a\u00a0<a title=\"Brandeis University\" href=\"http:\/\/iasp.brandeis.edu\/pdfs\/Author\/shapiro-thomas-m\/racialwealthgapbrief.pdf\" target=\"_blank\"><span style=\"color: #000000;\">February 2013 study by Brandeis University<\/span><\/a>\u00a0and\u00a0<a title=\"PEW Study\" href=\"http:\/\/www.pewsocialtrends.org\/files\/2011\/07\/SDT-Wealth-Report_7-26-11_FINAL.pdf\" target=\"_blank\"><span style=\"color: #000000;\">another by Pew Research Center<\/span><\/a>\u00a0in July 2011, while using different methodologies and coming up with different numbers, show the same trend \u2014 the racial wealth gap was large to begin and grew exponentially after the recession.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">As shown in the studies, the racial wealth gap is not new. It has deep historical roots and current policies perpetuate and exacerbate it. Enslaved Africans were first dragged to North America by European slave traders in the early 1600s. European colonists used African slave labor to work on plantations growing profitable cash crops like cotton, indigo and sugar.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">African labor was appealing to European colonizers because, unlike native Americans and indentured White European slaves, it was plentiful (if one died, they could be replaced by another African), Africans had no connections to Americans land, and Africans knew how to grow cash crops, like cotton and sugar, that grew on the African continent, the Caribbean, and southeastern United States. Thus, the trans-Atlantic slave trade, which lasted from the early 1500s to mid-1800s, saw the importation and exploitation of anywhere between 12 to 30 million enslaved Africans to European colonies in the Caribbean, South America and North America.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">The trans-Atlantic slave trade\u00a0<a title=\"Bloomberg\" href=\"http:\/\/www.bloomberg.com\/news\/2012-01-24\/how-slavery-led-to-modern-capitalism-echoes.html\" target=\"_blank\"><span style=\"color: #000000;\">built<\/span><\/a>\u00a0the foundation for modern capitalism and current racial inequality. Wall Street itself\u00a0<a title=\"Wall Street Was Founded On Slavery\" href=\"http:\/\/adamhudson.org\/2012\/01\/28\/wall-street-was-founded-on-slavery\/\" target=\"_blank\"><span style=\"color: #000000;\">was a slave trading market<\/span><\/a>\u00a0with many companies and financial institutions profiting from it,\u00a0<a title=\"Companies That Profited From Slavery\" href=\"http:\/\/www.africaresource.com\/rasta\/sesostris-the-great-the-egyptian-hercules\/the-slavers-of-wall-street-investment-banks-and-trans-atlantic-slave-trade-oguejiofo-annu\/\" target=\"_blank\"><span style=\"color: #000000;\">including<\/span><\/a>\u00a0the Royal Bank of Scotland, Bank of America, Aetna Insurance, now-bankrupt Lehman Brothers, Wachovia, and J.P. Morgan Chase, with\u00a0<a title=\"Read Article\" href=\"http:\/\/www.business-humanrights.org\/Categories\/Lawlawsuits\/Lawsuitsregulatoryaction\/LawsuitsSelectedcases\/SlaveryreparationslawsuitreUSA\" target=\"_blank\"><span style=\"color: #000000;\">lawsuits<\/span><\/a>\u00a0against many of them for their role in slavery.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">Banks, particularly predecessors of Wachovia and JPMorgan Chase, Bank of America,\u00a0<a title=\"Read The Article\" href=\"http:\/\/www.workers.org\/2008\/us\/lehman_1030\/\" target=\"_blank\"><span style=\"color: #000000;\">accepted<\/span><\/a>\u00a0slaves as \u201ccollateral\u201d and\u00a0<a title=\"NBC News\" href=\"http:\/\/www.nbcnews.com\/id\/15037694\/#.UZWPyyvwIRg\" target=\"_blank\"><span style=\"color: #000000;\">issued loans<\/span><\/a>\u00a0to slave owners. If a slave owner defaulted on his loan, the slaves, since they were \u201cproperty,\u201d became owned by the bank. Aetna Insurance had a policy compensating slave owners for their loss of property, such as when a slave died. Slaves also produced commodities that were sold in international markets for profit, which is characteristic of modern capitalism.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">The exploitation of African labor by White slave owners transferred wealth from enslaved Africans, and their descendants, to White European slave traders, their progeny, and other Whites who benefitted from the system. Since enslaved Africans were not financially compensated, they had very little chance to accumulate and pass down wealth in their communities. Even after slavery ended, that transfer of wealth ensured that African-Americans would remain socioeconomically subordinate to Whites for future generations. This is how the present racial wealth gap was formed.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">Just as there were laws protecting slavery, many policies, practices and institutions maintain the racial wealth gap. According to the Brandeis\u00a0<a title=\"Brandeis Study\" href=\"http:\/\/iasp.brandeis.edu\/pdfs\/Author\/shapiro-thomas-m\/racialwealthgapbrief.pdf\" target=\"_blank\"><span style=\"color: #000000;\">study<\/span><\/a>, \u201chomeownership, income, college education, inheritance, and unemployment\u201d are the \u201cmajor drivers of the racial wealth gap.\u201d The study points out that \u201cfor many years, redlining [denying or raising price of insurance or other financial services to particular neighborhoods based on race], discriminatory mortgage-lending practices, lack of access to credit, and lower incomes have blocked the homeownership path for African Americans while creating and reinforcing communities segregated by race.\u201d Many of these practices are perpetrated by the financial sector \u2014 the same sector whose roots go back to slavery.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">Practices in employment and education also contribute to the racial wealth gap. Currently, Black unemployment\u00a0lies\u00a0at 13.8%, while 6.8% for Whites. According to a Center for American Progress\u00a0<a title=\"CAP\" href=\"http:\/\/www.americanprogress.org\/issues\/poverty\/report\/2012\/04\/12\/11423\/the-state-of-communities-of-color-in-the-u-s-economy\/\" target=\"_blank\"><span style=\"color: #000000;\">study<\/span><\/a>, the weekly median earnings of African Americans (in 2011) were $674 compared to $549 for Latinos, $744 for Whites, and $866 for Asian Americans. Much of this is due to \u201clong-standing patterns of discrimination in hiring, training, promoting, and access to benefits\u201d that make it \u201cmuch harder for African Americans to save and build assets,\u201d said the Brandeis study.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">In addition, neighborhoods are deeply\u00a0segregated\u00a0by\u00a0<a title=\"Pew Research\" href=\"http:\/\/www.pewsocialtrends.org\/2012\/08\/01\/the-rise-of-residential-segregation-by-income\/\" target=\"_blank\"><span style=\"color: #000000;\">class<\/span><\/a>\u00a0and race. This leaves many lower-income students, particularly students \u201cisolated and concentrated in lower-quality schools, and less academically prepared to enter and complete college.\u201d<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">The latest emphasis on austerity disproportionately harms African Americans, as well. Cuts to government spending forces the public sector lay off workers. This\u00a0hurts\u00a0African Americans since they are 30% more likely to work in the public sector than the general workforce,\u00a0<a title=\"Fair Economy\" href=\"http:\/\/www.faireconomy.org\/files\/State_of_the_Dream_2011.pdf\" target=\"_blank\"><span style=\"color: #000000;\">according to<\/span><\/a>\u00a0a United for a Fair Economy study. The private sector has a long history of racial discrimination against African Americans, which is why the public sector has been more reliable for Black workers.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">Austerity, therefore, has a detrimental impact on African American employment. It curtails their ability to accumulate wealth, thereby, reinforcing the racial wealth gap. The latest round of sequestration will only\u00a0exacerbate\u00a0this trend. This comes at a time when corporate America and Wall Street\u00a0recovered very well\u00a0after the recession, experiencing high profits, while the rest of the country still\u00a0suffers\u00a0unemployment, low wages, slow job growth, and poverty.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">Wealth provides communities with a stable economic foundation. During hard economic times, when employment is difficult to find, possessing wealth helps people stay economically afloat. People can also have income from certain kinds of wealth, like stock or property, meaning that they can make money without working, simply by owning stuff. In addition, wealth can be passed on to future generations, which makes it easier for one\u2019s children and grandchildren to survive economically. Put simply, wealth builds economically stable communities.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">Depriving certain communities of opportunities to accumulate wealth makes it harder for them to survive economically. Those who have massive amounts of wealth do what they can to protect it, even\u00a0<a href=\"http:\/\/adamhudson.org\/2011\/12\/13\/occupy-wall-street-a-movement-against-oligarchy\/\" target=\"_blank\"><span style=\"color: #000000;\">influencing the political system<\/span><\/a>. This drives the wealth gap, especially the racial wealth gap, even wider and undermines democracy by putting political and economic power in the hands of a relative few. Tackling the racial wealth gap would advance racial equality, justice and true democracy.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\">\u00a0<\/span><\/p>\n<p><span style=\"color: #000000; font-size: medium;\"><strong>By:\u00a0Adam Hudson<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; June 4, 2013 &nbsp; The Racial Wealth Gap Explained &nbsp; The Astonishing Collapse of Black Household Wealth Black people suffer high rates of unemployment because of their failure to support Black owned businesses AFRICANGLOBE\u00a0\u2013 Despite growing economic inequality and mass unemployment, Washington is focused on austerity. Politicians and pundits debate how much to cut [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_s2mail":"yes"},"categories":[6],"tags":[4,12,11],"_links":{"self":[{"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts\/176420292"}],"collection":[{"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/comments?post=176420292"}],"version-history":[{"count":3,"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts\/176420292\/revisions"}],"predecessor-version":[{"id":176420317,"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts\/176420292\/revisions\/176420317"}],"wp:attachment":[{"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/media?parent=176420292"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/categories?post=176420292"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/tags?post=176420292"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}