The recession and economic meltdown has had a much more negative impact on ethnic minorities and, in many cases, completely wiped out decades of minority advancement. The gains have receded from a high of 7-to-1 in the white-to-black income gap in 1995, the study states.
But there are additional ingredients stirred into this toxic financial brew, says financial expert Jennifer Streaks. The marketplace crash stole from blacks the two largest components in wealth establishment. “Understand what happened during the [economic downturn]. You had minorities who lost their homes and also their 401k [plans]. So many of us, as minorities, we were still a generation of first-time college graduates, first-time lawyers [and] first-time doctors. We were not prepared to take the hit that the recession brought upon us,” said Streaks, the executive director of the Financial Literacy Foundation.
There is another equally, if not greater, reason for this grotesque report: mass mortgage corruption. Several mortgage companies and large financial institutions, who are the subject of colossal fines and lawsuits for deliberately steering minorities into subprime loans, also played a big role in decimating minority communities and creating vast economic wastelands.
“They snatched the American Dream right from under us,” Streaks concluded grimly. “It’s like we’ve been dragged back to the starting line. We’re at zero [again].”
Of course, it helps that Caucasians had a long head start on minorities since the establishment of this nation. “Caucasians … they have generational wealth. We do not. So the recession came through and wiped out the foundation that many of us were building for our families – in terms of buying a house or investing in rental properties. That’s gone. In terms of savings, that’s gone because you’ve been out of work and unemployed for so long that you’ve had to go through your savings.”
The numbers bare out Streaks’ points. The median wealth of white U.S. households in 2009 was $113,149, compared with a paltry $6,325 for Hispanics and $5,677 for blacks, the Pew research revealed.
Another factor: Long-established institutional racism does factor greatly into the abysmal numbers, without question.
“Typically in recessions, minorities suffer from being last hired and first fired. They are likely to lose jobs more rapidly at the beginning of the recession and are far slower to gain jobs as the economy recovers,” Roderick Harrison, a sociologist at Howard University, told the media. “One suspects that blacks who lost jobs in the recession, or who have tried to help family members or relatives who did, have now spent whatever savings or other cashable assets they had.”
–terry shropshire
