The NewStandard ceased publishing on April 27, 2007.

Blacks Losing Ground in Economic Race

by NewStandard Staff

Mar. 30, 2006 – In communities across the United States, times are tough for many, but the financial status of black Americans looks especially dire and continues to lag far behind that of whites, according to a new report released Wednesday.

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Themed "Opportunity Compact," the 2006 edition of an annual report by the liberal think tank National Urban League (NUL), relays mostly negative trends in disparity between blacks and whites.

"The state of black America is in trouble," said NUL’s president, Marc Morial, in a statement accompanying the report.

Published annually since 1976, "The State of Black America" assesses progress made in education, health, housing, jobs, social justice and discrimination. The 2006 report, released yesterday, found that in terms of equality there has been little improvement over the last few years, and even slippage in some areas.

The report includes essays on the impact of Hurricane Katrina, rising rates of incarceration and the racial composition of American jobs. It contains an index measuring gaps between blacks and whites in five areas: economic status, health, education, civil rights and civic engagement. When those areas are taken together, the report found, black status hovers 27 percent below that of whites.

According to its authors, "more than simply describing the problems, the report offers concrete solutions for moving Americans from poverty to self-sufficiency to prosperity" through a "five-point empowerment agenda."

Among the most drastic proposals is a single-payer healthcare model. But other ideas revolve around broader implementation or enhancement of government and social policies already in place, such as affirmative action and fair-housing laws.

In another instance, the report suggests setting a national goal of reducing child poverty by half over the next decade, leaving its elimination to "as soon as possible thereafter." The available portions of the report do not address the root causes of child poverty; neither do the authors set forth concrete solutions for its eventual eradication.

Using whites as a control group, report authors Rondel Thompson and Sophia Parker of Global Insight, an international economic forecasting company, found the widest disparity to be in the area of economics, with blacks at 56 percent of the white financial status – a 1 percent drop from 2005 figures.

Unemployment remains twice as high for blacks, and median "net worth" of African-American households is just one-tenth that of their white counterparts. That is, half the families in black America have less than $6,166 when their debts are subtracted from their assets, while among whites, half could cash in for more than $67,000. The federal government’s own figures from 2000 indicate the same disparity, but with higher medians: $79,400 for white families compared to $7,500 for blacks and $9,750 for Latinos.

Graph displaying household net-worth statistics

Indeed, according to US Census Bureau statistics also released Wednesday and reviewed by The NewStandard, the unemployment rate for blacks is 10.7 percent, compared to 5.1 percent for whites. Of blacks employed, just 26.8 percent hold managerial or professional positions compared to 39.1 percent of whites.

"We can't close the great divides in this country in a day, just like we can't end poverty in a night," said Morial. "But we're going to start by speaking truth to power. America is not America when millions of our citizens are still viewed as a fraction of a person."

Report contributor Darrick Hamilton, a professor of management and urban planning at the Milano New School, recommends conventional reforms such as better anti-discrimination laws and affirmative-action polices to counter what he himself considers the "systematic crowding of blacks into low-wage jobs."

Home ownership, an increasingly difficult goal for many Americans, has increased for blacks over the years due to fair-housing legislation aimed at diminishing discrimination in selling and lending practices. Though federal figures show that black home ownership increased by 1.3 million during the 1990s, according to NUL’s report, that rate remains at nearly 50 percent of households, compared to 70 percent for whites.

Lance Freeman, professor of urban planning at Columbia University, said that an increase in home ownership for blacks does not mean comparable increases in home equity, which would begin to address the staggering disparity in "net worth." In the report, Freeman states that a high level of residential segregation between blacks and whites continues a dual housing market in which many blacks are limited to buying homes in neighborhoods with higher poverty rates, fewer or poorer amenities and services, and consequently lower property values.

Freeman suggested better financial-literacy programs, more vigorous enforcement of anti-discrimination laws, and a strengthening of policies such as those of the federal Community Reinvestment Act, which encourages banks to lend in low-income neighborhoods.

According to 2001 statistics from the Centers for Disease Control, the death rate from heart disease for black Americans was 30 percent higher than that for whites, and the death rate for cancer was just over 25 percent higher. Additionally, blacks are twice as likely to have diabetes and accounted for more than 50 percent of new HIV/AIDS cases, though they make up about 13 percent of the US population.

"Take a group that suffers disproportionately from healthcare issues," wrote the report’s authors, "and couple that with a higher percentage of that group not having the means to combat illness or receive preventative treatment – the outcome is a vicious cycle that holds the promise of perpetuating itself for years to come."

Another essay contributor, researcher Brian Smedley, said decreasing these inequities will demand the collaboration of state and federal agencies. He calls for universal health coverage through a "Medicare-for-all" type of single-payer plan.

Blacks also are more likely than whites to receive longer prison sentences, another factor contributing to the overall disparity in the NUL’s equality index. According to the Sentencing Project, a group that pushes alternatives to prisons, one in three African-American males aged 20 to 29 is currently either in prison or jail, or on probation or parole.

The group also found that, while African-Americans constitute only 13 percent of drug users, they represent 35 percent of drug possession arrests, 55 percent of convictions and 74 percent of prison sentences. To reduce this disparity, the Sentence Project suggests reforming drug laws to focus more on treatment and less on incarceration, and to eliminate harsh sentencing rules that by extension have a disproportionate affect on minorities.

The report did show positive growth in business ownership, with the gap between black and white-owned businesses shrinking from 3 to 1, to 2.5 to 1 since last year’s report.

The education index saw slight increases in black youth enrolled in college and high school students enrolled in advanced science and math classes.

The Urban League did not express its findings or recommendations to the people most affected. Rather, the authors address public officials, scholars and policymakers, who the group asks to use the annual State of Black America report as ammunition to "attack" persistent racial and class inequities. A full copy of the report is available for $29.95.

"Poverty, the racial divide and social injustice do not impact only those who suffer most visibly," said Morial, the Urban League president. "Alleviating poverty and injustice is a responsibility we must never forget or abandon."

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The NewStandard ceased publishing on April 27, 2007.

This News Report originally appeared in the March 30, 2006 edition of The NewStandard.
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