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When White Folks Catch a Cold, Black Folks Get Pneumonia
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When White Folks Catch a Cold, Black Folks Get Pneumonia

Racial disparities in the economic circumstances of black and white middle-class families point toward institutional racism.

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The Horace Baker family decides to sell their home and leave the neighborhood in Folcroft, Pennsylvania, in the 1960s. (AP/WMW)
The Horace Baker family decides to sell their home and leave the neighborhood in Folcroft, Pennsylvania, in the 1960s. (AP/WMW)

There’s an old saying in some African American communities that is often applied to the broad-stroke disparity of nation’s economy: when white folks catch a cold, black folks get pneumonia. Loosely translated, this clichéd quip means a downturn in the economy might pose hardships for some white Americans, but it’s deadly for those black Americans who are already mired at the bottom of economic ladder.

Facts bear witness: A 2013 Urban Institute study found that while millions of Americans suffered a loss of wealth during the now-ending recession and the gathering recovery over the past five years, black and Latino families suffered disproportionately. As reported in The New York Times, the study found that the income gap between white Americans and Americans of color remained stable during the recession and the early months of the recovery, but the racial wealth gap grew larger:

As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth — as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances — white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.

The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families.

As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth — as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances — white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.

The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families.

“But today, the nation’s highest-income majority-black county stands out for a different reason – its residents have lost far more wealth than families in neighboring, majority-white suburbs,” The Washington Post reported. “And while every one of these surrounding counties is enjoying strong rebound in housing prices and their economies, Prince George’s is lagging far behind, and local economists say a full recovery appears unlikely anytime soon.”

And Prince George’s County isn’t alone. According to the Wall Street Journal, a similar racial disparity is affecting black communities in New York City. “As the black middle-class shrunk, the cluster of white, high-income, largely single people grew at the fastest rate of any group in the city,” the newspaper reported late in 2014.

Peter Sanders, an urban planner and blogger at The Corner Side Yard, noted this trend and found issues—I’d call them structural inequality factors or institutional racism—that compounded the problems faced by black middle-class families.

First, middle-class black homeowners tend to be limited by race in the resale of their homes. For the most part, white homebuyers don’t seek homes in predominately black communities, reducing the demand for homes in suburban Washington, D.C., New York City, Atlanta, Chicago, and other communities with affluent but largely African American home sellers. So even during the recovery, middle-class homeowners are stuck in place and largely unable to benefit from the surge in home prices.

Sanders also noted that African American homebuyers were targeted for subprime mortgages far more often than white homebuyers. This seemed to be true even when the potential black homebuyer had demonstrated high incomes and could have qualified for more conventional mortgages.

These issues, he argues, raise the need for public policies that could correct such structural inequality. “The demographic changes happening at all levels of our nation require thoughtful analysis,” Sanders wrote. “But as importantly, when looking at remedies that mitigate against disparate impacts, they require direct engagement – and I wonder if our nation is ready for that.”

I share his concerns and doubts, too. I’m skeptical that what Sanders calls “direct engagement” would be interpreted as a handout or affirmative action because it is targeted to assist the economic well-being of African Americans or other minority groups, rendering them impossible to pass political scrutiny. Indeed, even President Obama seems wary of going too far down that road and tends to couch his fiscal ideas in broad terms of middle-class economics, which he defined in his State of the Union speech as “helping working families feel more secure in a world of constant change.”

But will that be enough? Will that simple prescription alleviate white America’s cold, while doing little to cure black America’s pneumonia?

Sam Fulwood III is a Senior Fellow at the Center for American Progress and Director of the CAP Leadership Institute. His work with the Center’s Progress 2050 project 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.

Authors

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)
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