The State of Communities of Color in the U.S. Economy

Again, when times are tough, people of color are the ones that suffer the most. The following article by the Center for America Progress will be more detailed. Read & Learn….

The State of Communities of Color in the U.S. Economy

Racial and ethnic economic gaps have worsened or stayed the same during the recession and recovery. Unemployment rates rose faster for African Americans and Latinos than for whites while homeownership rates fell faster.

By Christian E. Weller, Jaryn Fields, Folayemi Agbede 1

Center for American Progress (January 21, 2011)

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The Great Recession of 2007-2009 produced widespread employment losses  for communities of color and white families alike-losses that have yet to be  overcome amid the still tentative economic recovery. All U.S. households were  severely hurt by the recession but communities of color experienced larger losses  than whites. This also means that, as the economic recovery deepens and the labor  market recovers, communities of color will have to climb out of a deeper hole to  regain the same level of economic security as they had before the crisis.

The level of economic security enjoyed by communities of color before the  housing and financial crises drove our economy into the ditch was far lower than  that of white families (though better than their current circumstances). The last  business cycle, which lasted from the beginning of the last economic recession in  March 2001 to the beginning of the Great Recession in December 2007, did little  to close the economic gap between communities of color and white families and  in some cases even exacerbated the difference in economic security. The Great  Recession thus made a bad situation worse.

Many communities of color, particularly African Americans and Latinos, experienced similar hardships during this recession even though their experience  during the preceding business cycle varied substantially. [1] African Americans saw  few economic gains during the last business cycle, with stagnant or declining  homeownership and wages, high unemployment rates, and low employment rates  even as the economy grew. Latinos, in comparison, saw comparatively strong jobs  gains that were reflected in other gains, particularly in homeownership, during the  last business cycle. Those gains, though, were insufficient to provide a buffer for  Latinos once the recession hit, leading Latinos to lose most of the ground gained  during the previous business cycle.

The data show that Asian Americans’ employment and earnings are generally  on par with those of whites, but the data are dominated by Chinese and Indian Americans. Other Asian nationalities, among them Vietnamese Americans and Cambodian Americans, are struggling to recover from the Great Recession, but limited data disguise the diversity within the Asian-American community. Still,  even the existing data for Asian Americans show substantial economic struggles in the worst recession, alongside economic hardships for white families.

The diverse consequences of the Great Recession and the ensuing tepid recovery for communities of color in our nation are evident in different sets of data.  Specifically the data show:

¢  Substantial differences in economic security exist by race and ethnicity. The  unemployment rate for African Americans, for instance, was 15.8 percent in the  fourth quarter of 2010, compared to 12.9 percent for Latinos, 7.3 percent for Asian Americans, and 8.7 percent for whites.

¢  Homeownership rates tell a similar story. In the third quarter of 2010, the homeownership rate for African Americans was 45.0 percent. The homeownership rate for Latinos was 47.0 percent, and the homeownership rate for whites  was 74.7 percent.

¢  Racial and ethnic differences have worsened or stayed the same during the recession and recovery. Unemployment rates rose faster for African Americans and Latinos than for whites while homeownership rates fell faster. Trends for poverty rates, health insurance coverage, and retirement savings  also show widening gaps by race and ethnicity throughout the recession and  recovery after 2007.

¢  Economic security losses during the recession and recovery exacerbated the  already weak situation for African Americans. They experienced declining employment rates, rising poverty rates, falling homeownership rates, decreasing  health insurance and retirement coverage during the last business cycle from 2001 to 2007. The recession that followed made a bad situation much worse.

¢  The recession and recovery quickly eliminated the modest gains that Latinos had seen during the last business cycle. Latino homeownership rates in 2010, for instance, were again close to their levels in 2001 even though Latino homeownership rates had risen from 2000 to 2007.