Category: Prime Politics Published on Wednesday, 18 April 2012 12:02 Written by Christian Weller, Julie Ajinkya and Jane Farrell
We are currently in the third year of economic recovery following the Great Recession and the financial crisis that upended domestic and world markets and decimated the global economy from December 2007 to June 2009. Three years into the recovery, the economic outlook is improving as economic growth is stabilizing and job creation gradually accelerating. That said, America’s families, which have suffered for years from high and long-term unemployment, remain in desperate need of stronger economic growth for a prolonged period in the foreseeable future.
Stable economic growth in the future, however, will depend on having a strong, broad-based middle class. While economic growth in the United States is on the mend, the data show that the benefits of this growth have not been equitably shared. Many middle-class families, regardless of race or ethnicity, do not enjoy the opportunities needed for them and their children to get ahead.
More disturbingly, the data we summarize in this report shows that communities of color are substantially less likely than their White fellow citizens to enjoy the opportunities that come from having a good job, owning a home, and having a financial safety cushion in the form of health insurance, retirement benefits, and private savings. This difference exists because economic opportunities eroded faster for communities of color than for Whites during the Great Recession — and those opportunities have been coming back much more slowly for communities of color than for Whites during the economic recovery.
Our report specifically shows, among other things:
• African Americans and Latinos persistently suffer from high unemployment rates. The unemployment rate of African Americans is typically twice as high as that of White Americans, while the Latino unemployment rate is about 50 percent greater than the rate for whites.
• Slower job growth during the recovery leaves communities of color in a deep economic hole. Employment in the fourth quarter of 2011 was 88.9 percent of African American employment in December 2007 and 91.4 percent of Latino employment, compared to 93.6 percent for Whites and 92.9 percent for Asian Americans.
• African Americans enjoy fewer job opportunities than other groups. The employed share of the population was 52.1 percent for African Americans and 59.3 percent for Latinos, compared to 59.4 percent for whites and 59.9 percent for Asian Americans in the fourth quarter of 2011.
• African Americans and Latinos earn less than others. African Americans’ median weekly earnings were $674 (in constant 2011 dollars), and Latinos’ earnings were $549. In comparison, whites earned $744 each week, and Asian Americans earned $866 in the fourth quarter of 2011.
• African Americans and Latinos swell the ranks of minimum wage earners. From 2009 to 2011 — two years into the recovery — the number of African American minimum wage workers increased by 16.6 percent, and that of Latino minimum wage workers increased by 15.8 percent, while Asian Americans in minimum wage positions decreased by 15.4 percent, and Whites only increased by 5.2 percent.
• Household incomes have fallen drastically for African Americans since the recession. Inflation-adjusted median incomes for African Americans fell by 7.1 percent from 2007 to 2009, faster than for any other population group. Further, inflation-adjusted median household incomes dropped another 3.2 percent from 2009 to 2010, which was as fast or faster than comparable income drops for any other population group.
• Communities of color have substantially less health insurance coverage than whites. The share of African Americans without health insurance in 2010 was 20.8 percent, and the respective share of Latinos without insurance coverage was 30.7 percent. This compares to 18.1 percent of Asian Americans without health insurance and 11.7 percent of Whites without health insurance at the same time.
• Homeownership disappears fastest for African Americans during the recession and recovery. At the beginning of the recession in 2007, the African American homeownership rate was 47.7 percent, Latino homeownership was 48.5 percent, and the homeownership rate for other races was 58.6 percent, compared to the White homeownership rate of 74.9 percent. By the end of 2011, 45.1 percent of African Americans owned their homes, 46.6 percent of Latinos owned their homes, and 56.5 percent of all other races owned homes, compared to a home-ownership rate of 73.7 percent for Whites.
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