Making Progress; Moving Forward!
Majority of Black Americans 
Are Living through Worst Economic Conditions
Liquid Wealth of Black Americans $200  

 

By Phillip Jackson

February 10, 2015

 

(Sri Lanka) Welcome to America, where Black Americans are more likely to be under-educated, unemployed and imprisoned than their White peers; where Black Americans, in general, have significantly less wealth, dramatically lower-quality housing, much poorer nutrition and sub-standard medical care. This is an America where Black people remain relatively silent while these conditions and a raging economic genocide, eliminates them, their children and their grandchildren from ever participating in the American mainstream!

 

Recent economic, wealth and employment reports confirm what much of Black America already knows: We are in serious TROUBLE and multitudes of Black people exist in deep poverty. Many Black people in America are not just poor by American standards; many of us are third-world poor. Black Americans are in an economic free-fall with no fiscal backstop. Many Black Americans will live their entire lives without ever having a positive net worth. Most Black people today who work are like "sharecroppers", men and families who did most or all of the work on a farm, but seldom earned enough to pay their debts and never owned anything of value.

 

While many economists praise the American economy with talk of low unemployment, record-housing starts and a booming GNP (gross national product), none of this tells the real story of the devastated Black economy within America. Recent data from the Pew Research Center shows the median wealth of Black households dropped an astonishing 34 percent from 2010 to 2013 while that of White households grew, albeit slightly, over that same period.

 

Pew's research shows that when automobiles and other durable goods are included, the net worth of White families was $141,900 in 2013 while the net worth of Black families that year fell to $11,000, down from $19,000 in 2007. This means that two years ago White families had 13 times the wealth of Black families in America, a 24-year high for the wealth gap.

 

But it gets much worse! When you remove vehicles and other durables from the equation, according to New York University economist Edward Wolff, the median Black family worth is just $1,700 (while 40 percent of Black families have zero or negative wealth). The median White family worth (without durable goods) is roughly 69 times more than that of Black families, or about $116,800.

 

And worst of all, the sad reality is that liquid wealth is largely non-existent within Black families. Liquid wealth is the money used to pay bills, buy food, pay the rent and cover emergency situations. In 2011, the Center for Global Policy Solutions in a report entitled Beyond Broke, showed the median liquid wealth of Black Americans as only $200, compared to $23,000 held by Whites.

 

More than $100 billion might have been extracted from Black American communities during the recent recession according to a report by the Center for Responsible Lending, Foreclosures by Race and Ethnicity. That money left the bank accounts, housing accounts, investment accounts and pockets of Black people and went somewhere else. While few people are searching for where that $100 billion went, it is almost certain that it will never come back to those Black families. This economic carnage of the Black American economy constitutes a kind of "financial rape" of the African American community, similar to the devastating effects of colonization on the African continent. Black Americans might never recover. Never!

 

Higher education, once the reliable key to moving from low-income to middle-income status, is no longer an option. The portals that lead away from poverty, crime and despair have closed tight. Generational poverty is inextricably intertwined with race. Hope for breaking the poverty cycle diminishes as generations of Black children are born into inescapable poverty. Many more Blacks in America are slipping into a third-world status-from poverty to deep poverty.

 

Black America cannot wait for the government, foundations and universities to save us. Annually, Black Americans generate about $1 trillion within the U.S. economy. We must take control of our financial resources and improve Black personal finances, our family wealth and our communities' economies. Although life might be good economically in America, the majority of Black Americans are living through the worst economic conditions in modern history!

 

TEN KEY SOLUTIONS FOR BLACK ECONOMIC WELL-BEING:

1. Start your own business. By starting your own business, you can hire family, friends and community members.
2. Get as much formal education as you can. It usually translates into higher income.
3. Stop renting an apartment. Save enough money to make a down payment on a house. Then buy a house.
4. Get married! Two-person-headed households are more viable economically. Marriage can be an economic advantage when both parties are aligned on financial priorities and share similar fiscal visions.

5. Open savings accounts for your children, teach your children the value of money and have them take personal finance classes.
6. First, invest your money and your time in your skills, your knowledge base and your self-improvement. Second, learn how to let big companies work for you rather than you only working for them through stock ownership. And third, invest your money in the U.S. and other global stock markets.
7. Manage your credit carefully and avoid unnecessary debt.
8. Create a living strategy that includes good nutrition, plenty of exercise and proper rest so that you might live a long and healthy life. Health is wealth!
9. Contribute to your faith-based institution and invest in a social organization or social cause.
10. Create a will or trust to pass on your accumulated wealth.

 

Phillip Jackson is founder and executive director of The Black Star Project in Chicago.  You may reach him at 773.285.9600.

 

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Projected Decline in Unemployment in 2015 Won't Lift Blacks Out of the Recession-carved Crater

15 States with Highest Black Unemployment Rates in 2014

United States - 11.4% (Average)

Wisconsin - 19.9%

Nevada - 16.1%

Michigan - 15.8%

District of Columbia 15.7%

Iowa - 15.6%

Illinois - 14.7%

Missouri - 14.4%

Washington - 14.3%

California - 14.0%

Connecticut - 13.1%

Indiana - 13.1%

Georgia - 12.5%

Mississippi - 12.5%

Alabama - 12.3%

New Jersey - 12.0%

Statistics provided by Economic Policy Institute

By Valerie Wilson
March 26, 2015

After a year of solid job growth in 2014, the forecast for 2015 is for modest improvements in unemployment. The national unemployment rate is projected to fall from 5.7 percent in the fourth quarter of 2014 to 5.4 percent in the fourth quarter of 2015.

This issue brief examines how unemployment rates, employment-to-population (EPOP) ratios, and long-term unemployment (defined as out of work for six months or more) of whites, Latinos, and African Americans changed nationally and by state between 2013 and 2014, and projects unemployment rates for the fourth quarter of 2015.

Key findings include:

In the fourth quarter of 2014, nationwide unemployment rates were 4.5 percent for whites, 6.7 percent for Hispanics, 11.0 percent for blacks and 4.4 percent for Asians. These rates are projected to decline modestly through the end of 2015.

Five years into recovery from the Great Recession, in the fourth quarter of 2014, the national white and Hispanic unemployment rates were each within 1 percentage point of prerecession levels while the black unemployment rate was 2.4 percentage points higher than it was at the end of 2007.

The national black unemployment rate of 11 percent in the fourth quarter of 2014 is still higher than the national unemployment rate at the peak of the recession (9.9 percent in the fourth quarter of 2009, according to the Bureau of Labor Statistics).

In 2014, the annual black unemployment rate was highest in Wisconsin (19.9 percent), Nevada (16.1 percent), Michigan (15.8 percent), and the District of Columbia (15.7 percent).

 

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How the Recession Hurt Black College Grads More Than Their Peers

The gap in unemployment rates between African Americans and whites is 
even worse now than it was in 2007.
Photo provided by The Black Star Project (credit)
By Sonali Kohli
December 29, 2014

The Great Recession might be over, but it has left behind widened racial inequalities in unemployment and wealth.

 

The unemployment rate for white Americans over 25 who had not finished high school was 9.7 percent in 2013. Meanwhile, the unemployment rate for black Americans who had advanced further on their educational trajectories, attending but failing to graduate from college, was 10.5 percent. That's an increase from 2007, before the recession:

This same trend can be seen among recent college graduates. The unemployment rate for black degree-holders between the ages of 22 and 27 was 12.4 percent in 2013. The unemployment rate among all college grads in that age range, by comparison, was 5.6 percent, according to a May report from the Center for Economics and Policy Research. The number was even lower for white college graduates in the age range-4.9 percent, the study's co-author told The New York Times.  

 

That's a gap of 7.5 percentage points. Compare that to 2007, before the recession, when the gap was just 1.4 percent. Black Americans with college degrees then had a 4.6 percent unemployment rate, while white Americans with undergraduate degrees were at 3.2 percent, the Times notes.

 

And the recession hasn't only affected people coming out of college. The median net worth of white households was 10 times that of black households' median wealth in 2007-and 13 times the median wealth of black households in 2013, according to a recxent Pew Research Center report.

 

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Wealth gap between whites and minorities is growing, Pew says

White Wealth 13 Times Black Wealth

Above chart provided by Pew Research Center.  

Andrew Khouri

December 12, 2014 

 

An unequal economic recovery has helped create the largest wealth gap between minorities and whites in more than a decade, a new report found.

 

The gap has grown, as white Americans -- who are more likely to own stocks -- rode surging financial markets to greater wealth, the Pew Research Center said Friday.

 

Meanwhile, minorities, hit harder by the housing crash, saw their wealth decline between 2010 and 2013.

 

The median wealth of white households was 13 times that of black households in 2013, Pew said, using data from the Federal Reserve's Survey of Consumer Finances. That is the largest gap since 1989 and compares to a gap of eight times in 2010.

 

White households had 10 times the wealth of Latinos, the widest margin since 2001.

 

The median wealth of black households fell nearly 34% from 2010, reaching $11,000 last year. Latino household wealth dropped 14.3% to $13,700.

 

White households saw a gain. Their median wealth rose 2.4% to $141,900.

 

The homeownership rate for whites fell from 75.3% in 2010 to 73.9% in 2013. For minorities, it dropped from 50.6% to 47.4%.

 

Click Here to Read Full Pew Report