Jose Garcia

Still Dreaming of Economic Equality

It cannot be said enough that the Presidential inauguration was a historic moment for America and the world. The election of the first African American to our highest office suggests a sense of cohesiveness and inclusion in the racial fabric of our country that the previous generation only dreamed of.

Swept up in the excitement, one can forget that less than 50 years ago US policy was animated by the concept of "separate but equal"--on all fronts: legally, economically, in education, the military, where you ate, slept, worked, etc. While neither race nor color is legal means for discrimination in 2009, they are telling factors that underscore stark economic differences that persist across America's households. One of those differences that is now familiar to the whole country today is an experience that African American and Latino households face constantly: a state of endless recession.

So when an economic disaster of the scale we're currently dealing with-- a true recession bordering on a depression-- sweeps the entire nation, the effects are especially devastating for communities of color. In 2008, the unemployment rate for Whites grew from 5 percent in June to 6.6 by December. Over the same period, the unemployment rate for Latinos jumped to 9.2 percent from 7.7 percent , and for African Americans the number of jobless shot up from an already deeply concerning 9.4 percent to 11.9 percent.

With such high unemployment rates, it is no wonder that there are huge differences between the median family income--and general economic stability-- of White, African - American and Latino households . Between 2000 and 2007, a period when real earnings declined across the board, African Americans and Latinos lost close to $1000 and $903, respectively, compared to $12 by Whites. This is without factoring in the decline in family income experienced by the general population in 2008.

As families struggle to get by on less, savings continue to dwindle. For every one dollar that Whites save, an African American of Latino family, on average, is only able to set aside 18 cents. Coupled with the devastating effects of the mortgage meltdown which according to a recent study by public policy group United For a Fair Economy may strip as much as $213 billion in assets from Black and Latino households, today's families of color more often than not must turn to credit when a paycheck falls short.

The everyday economic reality of communities of color is one of struggle to make ends meet. As the Obama Administration crafts its economic recovery plan, efforts must be made to pull communities of color out of their constant recession-like conditions. The creation of good jobs with decent salaries and benefits is a start, benefiting all Americans including those of color. All policies must be crafted with a special attention to their impact on our most vulnerable communities. After an era of social disinvestment, we owe it to communities of color to ensure that they are no longer left behind.

Jose Garcia is Associate Director of Research and Policy at Demos in New York City.

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Posted at 9:25 AM, Jan 29, 2009 in Economic Opportunity
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