Surprise! White-Minority Income Gap Continues to Widen

The income gap between whites and blacks in America has been widening for some time. A few years ago, a Brookings Institution study spelled out the fact that thirty-something blacks in 2007 were worse off than their parents had been at the same age in the mid-1970s. Despite the civil rights wins, the gap between African-Americans and whites had at some point started getting worse, not better.

And with the recession comes even more disheartening news. A new study by United for a Fair Economy, aptly titled "State of the Dream 2010: Drained – Jobless and Foreclosed in Communities of Color" (pdf), paints a dismal portrait of the situation at the end of last year. Its authors broke down the unemployment rate by race and ethnicity and found that the Dec. 2009 rates were higher for African-Americans and Latinos than any annual rate in nearly three decades.

Black unemployment was at 16.2 percent; for Latinos it was at 12.9 percent. Meanwhile, unemployment among whites fell for the second month in a row to 9 percent. And in certain states -- like Michigan and Ohio -- the African-American unemployment rate could hit the 20s this year.

Of course, the terrible strain on the economy has caused job losses all across the spectrum -- no socio-economic demographic has been untouched. Just this morning I was marveling over this sobering animation that geographically maps the universal rise of unemployment from 2007 through last year.

But even as we've watched our economy flush itself down the proverbial shitter, whites only saw an increase of unemployment of 2.4 percent from Dec. 2008 to Dec. 2009, in the worst recession since the Great Depression. Additionally, the report points out that in 13 states -- mostly in the Midwest, Great Plains, and the South -- unemployment for blacks was at least 2.5 times higher than for whites. In five states, Latinos were twice as likely to be unemployed as whites.

Adding insult to injury is the fact that the income gap isn't the only disparity measure that's growing -- the wealth gap is as well. So while blacks earn 62 cents and Latinos 68 cents to every dollar the average white person takes in, they have only 10 and 12 cents of net wealth, respectively, for every dollar whites have.

One reason for this, the Dream report argues, is that minorities have been disproportionately targeted by the financial institutions that foisted predatory lending -- and this mighty recession -- onto the American consumer. Indeed, over half the mortgages granted to African-Americans in recent years have been sub-prime loans, 60 percent to folks who would have qualified for regular loans. (Yep, banks are not only evil, they're racist, too!)

This report is an eye-opener even if you already know the major systemic truth -- blacks and Latinos get the short end of the stick in America. They get paid less, hired less, and their kids have far fewer opportunities.

The entire nation has been affected by the tough economic climate, but the demographic groups that have had it worst for decades have borne a disproportionate amount of the brunt of a recession created by a predominantly white financial class that has been swimming in tax-payer money and government aid. It's time to redirect our efforts to those who need help most.

The policy recommendations outlined by the report are so simple. Send money to the states with the highest unemployment rates; recommit to affirmative action policies; stop foreclosures and help people stay in their homes; strengthen financial regulation; end the Bush tax cuts for the wealthy and reinstate the estate tax. These policy changes will not only help blacks and Latinos, they'll help everyone who's struggling.

President Obama has said his administration is committed to helping "all Americans" weather the recession. To do so we must institute social and economic policies that target the communities that have suffered most -- recently and historically. If we do this, we all stand to gain.