Black Homeownership Up, Black Wealth Down
Black America Web, News Report, Wayne Dawkins, Posted: Nov 09, 2004
Cambridge, Mass. – Despite boasts by President Bush that black homeownership rose to an all-time high during his first term, many black households are losing ground because of a growing wealth gap, according to a leading social policy expert.
Black families lost 25 percent of their wealth during the jobless recovery from the recent recession, Thomas Shapiro, a Brandeis University professor of law and social policy said Sunday during a meeting with The Trotter Group, an organization of black columnists and commentators.
During the same period, white family wealth rose slightly, said Shapiro, author of the new book, “The Hidden Costs of Being African American: How Wealth Perpetuates Inequality.”
Almost two out of five families do not have enough financial assets to survive three months, if the suffer a major income interruption, Shapiro said. “About 54 percent of white families have the ability to survive for three months, versus 26 percent of black families,” he said.
Many middle-class black households had to sell stocks, dip into savings and tap their 401K plans to make ends meet, Shapiro said. Others, “nearly 50 percent of these families” had no assets to fall back on.
During a presidential debate last month Bush said 69 percent of Americans are homeowners, a record high and a sign that his administration polices were working. John Kerry, his Democratic opponent, countered that black homeowners were six times more likely than whites to go bankrupt.
Shapiro said the culprit is an expanding wealth gap between blacks and whites.
He noted that in the 1965, there were 750,000 middle-class blacks and by the mid-1990s the number multiplied 10-fold to 7.5 million.
But those gains have been undermined, Shapiro said, by a growing gap in inherited wealth between blacks and whites, and the “continuing institutional discrimination in homeownership.”
The “ownership society” that Bush touts looks like a debtor’s society for many black families, Shapiro said. There have been record levels of foreclosures, car repossessions and predatory lending.
According to 2003 federal government data, 1.6 million households filed for bankruptcy in 2003, up 33 percent from 2000. Shapiro said it is harder today for young families with children to get down payments for houses, however white, first-time homeowners usually do much better than blacks. That’s because they are more likely to be able to get help from their parents, grandparents or other family members.
For every $1 of white wealth, blacks have 10 cents of wealth. Middle-class black households have just 25 cents of wealth compared to $1 for whites, Shapiro said.
While two-thirds of all middle-class wealth is tied up in home equity, Shapiro said, black families are at a disadvantaged because of the residential discrimination that drives down the value of homes in many urban areas.
Shapiro said his book attempts to persuade policy makers to look beyond the conventional economic wisdom of comparing whites and blacks by income.
Blacks earn 60 cents for every $1 that whites make. “Why not shift the comparison” said Shapiro, to private family wealth? This advantage has deepened over generations, he said.
Shapiro warned that Bush administration proposals to seek a new round of tax cuts will only widen the wealth gap between blacks and whites.
“Assets don’t just add to your bank account, but assets feed dreams,” Shapiro said.
Related Stories:
The Color of Money: College Students and Credit
Powernomics Shakes Up Detroit
Wealth of a White Nation
Page
1 of 1
|
