Continuing Inequalities Blur the American Dream

While racial gaps in the U.S. income cost are old news, revitalized versions of these statistics are no less significant for the nation’s economic recovery.

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Protestors demonstrate outside of a McDonald's restaurant in Oakland, California, in December 2013. (AP/Ben Margot)
Protestors demonstrate outside of a McDonald's restaurant in Oakland, California, in December 2013. (AP/Ben Margot)

For those who have been paying attention, there’s nothing new or surprising in the periodic release of data that measure the effect of sexism and racism on the nation’s economy. My colleagues at the Center for American Progress are among a growing chorus of voices who have tracked and documented how America’s vast economic and racial inequalities hinder economic growth for all Americans.

As far back as 2013, CAP’s Progress 2050 project released All-In Nation: An America that Works for All, a book that estimated that racial gaps in income cost the U.S. gross domestic product $1.2 trillion in 2011 and that ending these racial gaps would lift some 13 million Americans out of poverty. That’s old news.

But just because something is old news doesn’t make a refreshed version of it any less significant. While still alarming and shockingly disappointing, a series of new economic reports demonstrates that the nation’s improving economy isn’t yet the rising tide to lift all boats—especially for the poor, women, or  people of color.

According to findings contained in a recently released economic survey of the nation’s economy by the Paris-based Organisation for Economic Co-operation and Development, or OECD, seven years after the global financial crisis, the United States has had one of the strongest rebounds of the OECD’s 34 member countries. “Many private-sector jobs have been created, pushing unemployment down to its pre-crisis level, thereby providing consumers with higher income and improving their confidence,” the report stated.

Yet, the OECD report highlighted how sexism and racism impedes economic progress. The report noted, for example, that women, African Americans, and people with criminal records are less likely to see returns on the nation’s recovery. For example, regarding women, the OECD noted, “Women’s participation in the labour force and employment rates remain well below those of men’s and have been falling back recently such that they are now below those of Germany and Japan.” Additionally, the OECD suggests that a federal paid maternity leave policy would greatly benefit women’s labor force rate.

The OECD also drew attention to “substantial gaps” in the earnings of full-time workers across racial demographics.

“Black and African American and Hispanic and Latino male workers earn a bit less than three quarters of that earned by white males,” the report said, noting that people with criminal records face even higher hurdles in the workplace. “Given the over-representation of blacks in the prison populations, black males, particularly young males, have much higher unemployment rates and lower employment rates.”

In a separate study released earlier this month by the Roosevelt Institute and the Franklin D. Roosevelt Presidential Library and Museum in Hyde Park, New York, a team of researchers exposed the roots of racial and economic inequality among black Americans.

As the report’s authors view it, economic inequality is the result of “racial rules that undergird our economy and society.” To draw attention to those “laws, policies, institutions, regulations, and normative practices,” the authors examined how those rules effect the lives of black Americans in six dimensions: income, wealth, education, criminal justice, health, and democratic participation. What’s more, the authors traced how those rules have evolved over time, from the end of slavery to the civil rights era to the current post-civil rights era. The authors wrote:

At every level of education, black Americans are paid less than their white counterparts. At every level of income, black Americans have less in assets then their white counterparts. Compared to white Americans, black Americans have higher rates of unemployment, accrue less wealth, and have lower rates of homeownership. But just as critically, even middle-income black Americans have unequal access to the quality-of-life goods—education, health, and safety—that economic success is expected to guarantee. The reasons for this are a complex web of racial rules.

Of course, the history of past problems doesn’t have to be a roadmap for a future repetition of them. Old news can inform the nation about what to avoid as it moves forward and becomes more diverse.

And solutions aren’t impossible, nor do they need be novel. For years, those who have been paying attention have been aware of proven policy proposals, such as investments in public infrastructure; improved access to education; federal paid parental leave and better access to child care; and greater access to employment for workers with criminal records. In other words, there’s no reason why the old news of sexism and racism must be permanent features holding back a shared national prosperity.

The nation’s economy continues to thrive. Even when there’s cloudy news—such as lower than expected job production this past month—one need only dig a bit deeper into the story to find a silver lining of optimism. The resilience of the nation’s economy is the product of choices Americans make. The speed of the nation’s economic recovery, therefore, can be accelerated with wise decisionmaking. The nation only has to choose to do so.

Sam Fulwood III is a Senior Fellow at the Center for American Progress. His work with the Center’s Progress 2050 examines the impact of policies on the nation when there will be no clear racial or ethnic majority by the year 2050.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.


Sam Fulwood III

Senior Fellow

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President Barack Obama delivers his State of the Union address before a joint session of Congress on Capitol Hill in Washington, Tuesday, January 12, 2016. (AP/Evan Vucci)