The Economic Immobility and Financial Insecurity for People of Color
According to a Pew Research Center study released last week, the median wealth (assets minus debt) for white households is a little over $113,000, whereas the median wealth for black households is little more than $5600. According to a study released last year by Insight, Center for Community Economic Development, the median wealth for single black women is $100. Twenty-five percent of women of color have student debt, and nearly 50 percent of women of color have credit card debt in order to pay for basic necessities, thereby endangering financial security and economic mobility. According to Insight "[s]ingle black and hispanic women have one penny of wealth for every dollar of wealth owned by their male counterparts and a fraction of a penny for every dollar of wealth owned by single white women."
- Single black and Hispanic women have a median wealth of $100 and $120 respectively; the median for single white women is $41,500.
- While white women in the prime working years of ages 36-49 have a median wealth of $42,600, the median wealth for women of color is only $5.
- Nearly half of all single black and Hispanic women have zero or negative wealth, the latter of which occurs when debts exceed assets.
- While 57 percent of single white women own homes, only 33 percent of single black women and 28 percent of single Hispanic women are homeowners.
- Only 1 percent of single Hispanic women and 4 percent of single black women own business assets compared to 8 percent of single white women.
- Social Security is the only source of retirement income for more than 25 percent of black women.
- Prior to age 50, women of color have virtually no wealth at all.
It should be noted that as a result of the debt deal entitled "The Budget Control Act," as of July 1, 2012, subsidized Stafford loans for graduate and professional students will end, thereby further increasing and solidifying institutional barriers to economic mobility for women of color, especially as access to jobs and income have not kept pace with educational debt. Further, the "longstanding racial disparity among college graduates has grown markedly worse in the course of the downturn. Between 2007 and 2010, unemployment among white college graduates under the age of 25 climbed by just over 3 percent; it shot up by more than 7 points for Latinos and nearly 6 points for African Americans."
As much as things change, as much they stay the same. Some decades after the victories of the Civil Rights movement, people of color have not achieved economic equality, and are, in fact, slipping backward in the current downturn. Persistent poverty, discrimination against women and people of color, and job and residential segregation still stand in the way of our nation’s quest for fairness. Women of color have always been an important part of the U.S. economy. For example, black and Latina women have historically had higher rates of labor force participation than white women because, due to discrimination and other factors, black and Latino couples were more likely than white couples to depend on the income from women’s work. Then and now, women of color are over-represented in traditional women’s jobs such as housekeeping and elder care, jobs that are undervalued and underpaid. Over 100 years later, job training, wage equity, and child care remain on the agenda for race and gender equity.
It should be further noted that while women of color struggle to make ends meet, the top 25 hedge fund managers took home an average pay of $880 million last year.
The Impact of the Foreclosure Crisis
In a country that was founded upon the theft of land from its indigenous population, followed by the genocide of its indigenous population and exploitation of enslaved blacks in order to literally and figuratively build this nation, is it any surprise that in 2011, the bankstas are now stealing homes and land from the same folks? The foreclosure crisis, simply put, is the legacy of post-slavery America:
"The legacy of de facto segregation practiced by banks, mortgage lending institutions, real estate agents, and average white citizens has been the most insidious barrier to African-Americans' pursuit of racial justice." -- Sikivu Hutchinson, Moral Combat at p. 66.
The foreclosure crisis has been the most significant driving factor behind the racial wealth gap, as the wealth of people of color are primarily derived from home equity. And the foreclosure crisis is far from over. According to the Center for Responsible Lending, it is estimated that somewhere between 10 million and 13 million homes will be foreclosed upon by the time crisis abates. Thus far, approximately 2.5 million homes have been foreclosed upon. Although the foreclosure crisis has affected every racial and ethnic group, communities of color have been disproportionately affected.
- Non-Hispanic whites represent the majority of at-risk borrowers, but African-American and Latino borrowers are more likely to be at imminent risk of foreclosure (21.6% and 21.4%, respectively) than non-Hispanic white borrowers (14.8%).
- American Indian (16.5%), Native Hawaiian or other Pacific Islanders (18.6%), and Asian borrowers (15.7%) all also show an increased likelihood of being at-risk.
[Source: Center for Responsible Lending]
Furthermore, in Mississippi (the poorest state in the nation, with the highest percentage of seriously delinquent subprime loans), at the height of the housing bubble, 70 percent of all loans made to African-Americans were subprime, whereas 30 percent of all loans made to whites were subprime.
The foreclosure crisis has crept into other individual, familial, and community arenas:
When families lose their homes, the resulting damage is multifaceted. First, there are the immediate impacts associated with the disruption and upheaval of eviction. A recently released study of Latino families by the University of North Carolina at Chapel Hill and the National Council of La Raza found that families facing foreclosure experienced high rates of depression, marital discord, and a decline in academic performance by affected children.
Second, there are the longer-term consequences of foreclosure. Families who lose a home cannot tap home equity to start a new business, pay for higher education or secure their retirement. Loss of a home also removes a financial cushion against unexpected financial hardships, such as job loss, divorce or medical expenses, and eliminates the main vehicle for transferring wealth intergenerationally.
Finally, foreclosures have ramifications that extend beyond the families who lose their homes. Communities with high concentrations of foreclosures lose tax revenue and incur the financial and non-financial costs of abandoned properties and neighborhood blight. Homeowners living in close proximity to foreclosures suffer depreciated home values—last year, CRL estimated that, by 2012, surrounding property owners would lose $1.86 trillion in home value.
[Source: Center for Responsible Lending]
These figures are unsurprising yet staggering at the same time, given the fact that America has a long way to go before it begins to redress the vestiges of slavery and plantation economies, namely: de facto residential segregation, Jim Crow, the mass incarceration of people of color (black men in particular), "policies going all the way back to the New Deal when African-Americans were shut out of some of the very earliest home ownership opportunities" (most New Deal programs discriminated against African-Americans), and discriminatory housing practices/redlining, thereby making African-Americans especially vulnerable to the subprime market, having been shut out of acquiring conventional loans. Lest northerners develop a superiority complex, many of these cotton and sugar plantation empires were run and owned by northerners who acquired wealth through the exploited labor of enslaved blacks.
As a result of the foreclosure crisis, African-Americans are now even more vulnerable to predation by payday lending schemes.
Sword and Shield: Dismantling and Transforming the System
Advances in civil rights -- whether it be politically, economically, culturally, legislatively, or symbolically -- are always followed by protracted, well-concerted, powerful efforts to reinforce and preserve white privilege, an unearned privilege borne from a system designed to benefit one particular group by subjugating other groups in every sphere of life. Achieving socio-economic and political parity and racially equality under such a system that institutionalizes racism, sexism, heterosexism, ableism, nativism, and cisgenderism is impossible. Parity and equality can only be achieved until the system is either dismantled or transformed.
Transforming the system can only come about after achieving a critical mass around foundational issues, such as elevating housing to a fundamental human right and securing community control over land. Systemic change and transformation is brought about by a two-pronged "sword and shield" approach: (1) the sword being community mobilizing and organizing around critical issues; and (2) the shield being legal defense work to protect and represent individuals in adversarial proceedings that cede the advantage to corporate goliaths, typically in bed with the government.
There is a slow, hopefully burgeoning, national movement, some of which is informally organized under Take Back the Land, mobilizing communities to take a unified stance, alongside homeowners, against bankstas and the police when they appear as swat teams to evict citizens from their homes, sometimes with humiliating and excessive force. Taking a literal stand provides more than just communal support for the threatened homeowner, it has had the affect of fending off bankstas and keeping folks in their homes.
Movements like Take Back the Land seek to achieve something truly transformational: elevate housing to a human right, transform our relationships to each other, transform our relationships to land, redefine community and undermine capitalism. This movement, however, is far from achieving a critical mass. There are not nearly enough ordinary citizens standing up against the bankstas and police with their neighbors -- and there are hardly any lawyers willing to do foreclosure defense work, notwithstanding the desperate need for foreclosure defense attorneys. Notwithstanding current public sentiment and anger, that is a truly sad testament regarding our privilege and value system. Why is that the case and, moreover, what can we do about it to get more people involved in local grassroots efforts?
We All Have a Stake in Racial Equality
"Happiness index" studies have shown that in countries with socialist paradigms (i.e., high tax rates and investments in the collective populace), the societies are generally homogeneous. Clearly, the rise of a heterogeneous population in America threatens white supremacy, forcing and fueling those who benefit most from the system to reinforce the current paradigm of corporate socialism and white privilege. White supremacy is not merely embodied by out and spoken members of the KKK, but white supremacy is a culture and a system that pervades every arena of life through cultural concepts such as individualism, private ownership, and economies based on "scarcity" rather than abundance; through various media; through law; through humanitarian and non-profit organizations; through injustice systems; through literature; and through the education system, to name but a few. White supremacy normalizes "white experience" as superior to other experiences or other ways of thinking.
As such, the mother lode of institutional, cultural and individual racism is the arch enemy. If we are ever to live up to the promissory note of "equality, liberty, and justice for all," the system must be transformed to eliminate the mother lode of racism and all other "isms" derived from the desire to subjugate. Thus, it would seem that we all have a stake in achieving racial justice.
Although it is difficult to overstate the historic and monumental significance of the election of President Barack Hussein Obama (which, on the one hand reflects significant cultural changes in attitudes, yet also reflects the tendency to exceptionalize "acceptable" people of color), by the same token, the election of the first African-American male U.S. president has catalyzed a culturally and politically attitudinal regression with respect to white leadership normativity -- and further galvanized white supremacy and preservation against the economic mobility of people of color.
Beyond overcoming deeply entrenched cultural attitudes regarding the white leadership normative hegemonic framework, the system inherently guarantees that the economic ability for people of color to attain leadership positions remains abysmally low, given the fact that most people of color, and particularly single black women, even with advanced level degrees, are struggling barely to survive.
Barriers to acquiring wealth and systems that enable the theft of wealth from people of color are directly linked to access to health care, education, and employment. Although it is widely known that banking and mortgage lending institutions engaged in widespread fraud through robo-signed subprime loans, they were given billions of dollars in TARP funds, the purpose of which was to keep people in their homes. However, not only are homes being foreclosed upon while bank and government-owned homes remain vacant (thereby increasing homelessness, crime, and declining property values), the organized criminals at Washington Mutual, Deutsche Bank, Lehman Brothers, Bank of America, the American International Group, and Moody’s Investors Service have not been held criminally accountable by the government for perpetrating such economic terrorism.
But the racial wealth gap is more than just a product of failed and unethical political processes and systems: it is a very ugly reflection of America's collective value system. As such, in order to even remotely begin thinking about the feasibility of serious racial equality in America, we the people must begin to not only examine and transform the system by collectively organizing around critical issues, but, first, we must also begin to examine our own values and unearned privileges. Otherwise, in the face of a highly organized white supremacist opposition, who and to what end are we organizing for, and with whom are we organizing against?
Outside of participating in the electoral process, what do we need to do to mount a successful movement towards true racial equality in America? How do we become fierce anti-racist activists and how can we better educate others to be fierce anti-racist activists?
Update: This article is available for classroom use [pdf]. Please be sure to let me know how your class responds to the information catalogued and discussed in this article -- and how your students respond to the questions raised in this piece. Thank you!