By Christian E. Weller, Julie Ajinkya, Jane Farrell | April, 12, 2012
Read the full report, here.
To listen to today’s press call, click here.
Washington D.C. — The Center for American Progress released a report today entitled “The State of Communities of Color in the U.S. Economy: The Third Year of the Recovery” analyzing how communities of color have not enjoyed the benefits of the recovery’s growth and shows that communities of color are less likely than whites to enjoy the opportunities that come from having a good job, owning one’s own 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 have been coming back more slowly for communities of color than for whites during the economic recovery. More notably, the report found that African Americans have enjoyed fewer job opportunities than other groups, putting their employed share of the population at 52.1 percent compared to 59.3 percent for Latinos, 59.4 percent for whites and 59.9 percent for Asians in the fourth quarter of 2011. As the country’s demographics shift, it is imperative for future policy makers to take the slow progress communities of color have experienced into account in order to strengthen and improve the nation overall.
See some of the following key facts from the report:
- African Americans and Latinos persistently suffer from high unemployment rates. The unemployment rate of African Americans has typically been twice as high as that of whites, while the Latino unemployment rate is about 50% greater than for whites.
- Slower job growth leaves communities of color in a deeper hole four years after the recession began. Employment in the fourth quarter of 2011 was 88.9 percent of their employment in December 2007 for African Americans and 91.4 percent for Latinos, compared to 93.6 percent for whites and 92.9 percent for Asians.
- African Americans and Latinos earn less than others. African Americans’ usual median weekly earnings were $674 (in constant 2011 dollars) and Latinos’ earnings were $549. In comparison, whites earned $744 each week and Asians earned $866 in the fourth quarter of 2011.
- There are more African Americans and Latinos employed at or below the minimum wage than other groups. 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 had increased by 15.8 percent, while Asians decreased by 15.4 percent and whites only increased by 5.2 percent.
- Household incomes have fallen drastically for African Americans since December 2007. Inflation-adjusted median incomes for African Americans fell by 7.1 percent from 2007 to 2009, faster than for any other population group. And, 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 was 30.7 percent. This compares to 18.1 percent of Asians without health insurance and 11.7 percent of whites without health insurance at the same time.
- Wealth gap between communities of color and whites widens sharply due to housing market weaknesses. The median non-white or Latino household owned with $23,300 (in 2009 dollars) less than one sixth of the wealth of white non-Latino households, who owned $149,900 at that time in 2009. This reflects a substantial widening of an already very large wealth gap between communities of color and whites at the start of the recession since non-whites or Latino households owned about one-fifth of the typical wealth of white non-Latino households in 2007.
- Homeownership disappears fastest for African Americans during recession and recovery. The At the beginning of the recession in 2007, the African American homeownership rate was 47.7 percent, the Latino homeownership was 48.5 percent, and the homeownership rate for other races was 58.6 percent, compared to the white homeownership rate at 74.9 percent. By the end of 2011, 45.1 percent of African Americans owned their homes, 46.6 of Latinos owned their homes, and 56.5 percent of all other races owned homes, compared to a homeownership rate of 73.7 percent for whites.
- Communities of color at higher risk of losing their homes to foreclosure than whites. The foreclosure rate for African Americans was 9.8 percent, for Latinos 11.9 percent and for Asians 6.6 percent, while the foreclosure rate for whites was 5.0 percent a in 2011.
- Retirement plan coverage is lower for communities of color than for whites and continues to decline for African Americans in the recovery. One year into the recovery, in 2010, the percentage of African American private sector workers who participate in a retirement plan at work was 34.4 percent, 21.4 percent for Latinos, and 44.3 percent for whites.
All in all, communities of color generally have worse economic security than white households. The data further show that all groups seem to have experienced some improvements, starting in 2010, except for African Americans. African Americans suffered longer from the fallout of the Great Recession than any other large population group. The widespread economic pain and the lingering economic distress following the Great Recession require policymakers’ attention. The report finds that a return to economic growth is insufficient to lift all boats and that policymakers need to step in to make sure communities of color equitably benefit from the economic recovery.
Read the full report, here.
To listen to today’s press call, click here.
To speak to CAP experts, please contact Laura Pereyra at [email protected] or 202.203.8689.
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