A new study by the Urban Institute on April 28 shows that Blacks and other minorities have experienced a greater loss of wealth and economic progress in the past five years under President Obama than white Americans have. Even as wealth assets held by white individuals and families has remained stable during the ongoing Great Recession, the economic downturn has helped increase the disparity between racial wealth lines by nearly 50%.
Millions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute.
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. – NY Times
Much of this increase in wealth disparity has come from the overwhelming number of foreclosures that have occurred for minorities since the bursting of the housing bubble in 2007. Because of intimidation practices and other pressures placed on banks during the Clinton administration in the late 1990’s, many institutions were coerced into loaning money to minorities who could not afford to purchase a home, leading eventually to the sub-prime crisis.
A study in 2010 validates this assertion as Blacks and Hispanics filed for foreclosures at a rate nearly double that of white Americans.
Of borrowers who took out mortgages between 2005 and 2008, some 8% of both African-American and Latino borrowers have lost their homes to foreclosure, compared to 4.5% of non-Hispanic whites, according to a study by the Center for Responsible Lending. – CNN Money
Additionally, Blacks and Hispanics have experienced a much more difficult time finding good paying jobs since the start of the Great Recession, primarily due to lack of skills and education, and an increased demand for higher skilled labor in a shrinking employment pool.
During his five years in office, President Obama has done little to focus on, or improve the climate of jobs, and overall economy. According to the Government Accountability Institute, the second term President has spent twice as much time golfing and on vacation than he has participating in economic meetings of any kind. This lack of priority in helping to stave off America’s ongoing recession and rising unemployment will continue to hurt Blacks and minorities in increasing numbers over time, and dissolve any remaining wealth minorities may have accumulated before the start of the crisis.