Dr. Maya Rockeymoore,
Founder and President of Global Policy Solutions, the Center for Global Policy Solutions, and GlobalPolicy.tv
Right now, there are families in America who feel they have done all the “right things.” They have played by the rules and worked hard but they aren’t getting ahead financially. In fact, they are falling further behind and are basically beyond broke. They have many things in common but the thing that is most striking is their racial make-up; they are mostly African American and Latino.
In the so-called “recovery period” following the Great Recession, the average African American and Latino household still owns only six and seven cents respectively for every one dollar in wealth held by the typical white family, an increase of only a penny per group since 2009. And despite reports that U.S. households have regained much of the wealth they lost since the Great Recession, communities of color have yet to see the benefits of the economic recovery.
Our analysis of U.S. Census Bureau Survey of Income and Program Participation data show that between 2005 and 2011, the median net worth of households of color remained near their 2009 levels, reflecting a drop of 58 percent for Latinos, 48 percent for Asians, 45 percent for African Americans but only 21 percent for whites. Steep losses in homes and home equity in the lead up to and during the Great Recession contributed to more dramatic declines in the net worth of households of color.
But it gets even worse, for the data shows that many African American and Latino households are considered “liquid asset poor,” meaning that they do not have cash or assets readily converted to cash to cover basic living expenses if they are without income for three months. In fact, the average liquid wealth of whites is now over 100 times that of African Americans and more than 65 times that held by Latinos.
It’s not an accident that these communities have less wealth and cash on hand. Their low wealth position can be correlated with discriminatory governmental policies that largely excluded people of color from the formal economy up until the latter half of 20th century and policies that continue to
