RSS

White Wealth – Black Debt 1984-2007

18 May

This comes from a combination of factors, both within and outside of the control of black wage earners. Income stability is a huge issue in the black community, with unemployment, and long term underemployment being both chronic and 2-3 times the rate experienced by whites. A second factor contributing to this is generational wealth. A third, is simply ignorance about financial investment and handling money. Lastly, is the existence of predatory and racially biased lending, forcing black people to pay considerably more for major loan based purchases such as autos and homes.

The one thing each of us can control is financial literacy.

White Wealth and Black Debt Shot Up in “Growth” Years

The wealth gap between Blacks and Whites has grown by fourfold over the course of Generation X’s lifetime, exploding to $95,000, a study released today found. And the debt burden among African American families has nearly doubled.

The study comes from Brandeis University’s Tom Shapiro, who’s among the pioneers in measuring economic equality by considering overall household wealth—your assets minus your debts—rather than just income. Shapiro’s research team looked at data from a decades-long, national survey of family economics and discovered that, between 1984 and 2007, the wealth gap saw unprecedented growth, as assets among high-income White households shot up while debt among all Black households did the same.

The visuals show it best. This first chart shows median assets by race (charts are from the report):

Median Wealth Holdings chart

But a second chart breaks it down by income levels:

Median Wealth Holdings by Income chart

So rich White people got really rich at the close of the 21st century. It puts the neo-liberal growth years into a new light–all that growth went into very few pockets. Meanwhile, Black folks’ debt shot up, too, as the lending market got less regulated and more perilous for working families. As Shapiro and his coauthors write:

Among those with no financial assets, credit is often an emergency resource. Summing all assets and debt, one in ten African‐Americans owe at least $3,600, while their debt burden was about half of this in real terms in 1984 ($2000). In sum, many African Americans hold more debt than assets. [Emphasis added]

The problem of debt growth can’t be overstated. Yes, all Americans have drowned in the fees and trap doors federal regulators never thought twice about until this year. But Shapiro’s research points to why financial regulation is about a lot more still: Black neighborhoods in particular are awash in predatory financial products, ranging from subprime home loans to check cashing joints, and that has helped propel a lopsided and unsustainable economic trajectory.

 
5 Comments

Posted by on May 18, 2010 in American Greed, The Post-Racial Life

 

Tags: , , , , , , , ,

5 responses to “White Wealth – Black Debt 1984-2007

  1. nanakwame

    May 18, 2010 at 12:54 PM

    Follow the money baby brother – This is why the massmen unleashed such vile against Obama, or the fool who wrote the book alluding to Obama making white male slaves. The middle class Afro-American might have risen but the amount of debt among our children is a long term burden, where many have to come back and live with their parents. My son’s credit after 10 years has just gotten better. The last 40 years had a lot of illusionists running government and writing rubbish, even made a joke out of what is conservative. New Note 8 out 10 do not want Reagan placed on a 50 over Grant, thank g_d and General Grant, if they allowed him to finish the South, hmmmm. Our first Civil Rights General.

    Like

     
    • btx3

      May 18, 2010 at 1:21 PM

      Actually I preferred Sherman…

      Like

       
  2. nanakwame

    May 18, 2010 at 1:37 PM

    Macro economic data suggest the great recession is over. But the gap between the haves and the have-nots is growing, thanks, in large part, to a jobless recovery. Wall Street Cheat Sheet’s Damien Hoffman says the growing underclass now accounts for about 10% of the U.S. population.

    A underclass in America at 10% not good baby brother at all

    Like

     
    • btx3

      May 18, 2010 at 2:17 PM

      The first part of the recession is over – the second part may be a real mother!

      Other parts of the debt industry will likely collapse, leading to a “double dip” recession.

      My deal flow right now is 80% International. I have only one deal I’m trying to put together in the US.

      Like

       
  3. nanakwame

    May 18, 2010 at 1:37 PM

    BTW – got new on web site damn Hank Jones died at 91.

    Like

     

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: