Liberal think tank: Racial economic inequalities will persist
Published: January 27, 2012
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If current trends continue, in 2042, median black family income will be 61 cents to every dollar of white median family income.
According to the Census Bureau, people of color will collectively make up the majority of the population in 2042, 30 years from now. If the country continues along the path that it has been on for the last 30 years, the racial economic divide will remain in 2042 and, in many regards, will be considerably worse. This is the core message of the liberal think tank, United for a Fair Economy’s (UFE) ninth annual MLK Day report, “State of the Dream 2012: The Emerging Majority,” released Jan. 13 in advance of the holiday.
The report examines trends across a variety of indicators including income, wealth, education, employment, health and incarceration. It finds that when the U.S. becomes a “minority-majority” country, the racial economic divide will remain disastrously large and will threaten the stability of the entire economy.
“The early 1980s marked a turning point in U.S. politics,” says Brian Miller, executive director of UFE and a co-author of the report. “The policies since have done little for economic progress for people of color, which should raise great concern as these demographic shifts occur. Without a sea-change in public policy, racial inequality will devastate our economy as people of color become the population majority.”
In 2010, blacks and Latinos earned 57 cents to every dollar of white median family income. Persistent wealth inequality continues to entrench the racial economic divide. Near the height of the housing bubble in 2007, white net worth was five times greater than black net worth and 3.5 times that of Latino net worth. The black-white income divide will be only slightly reduced by 2042 if we do not change course, while the Latino income and wealth gaps and the black wealth divide will all expand.
“Income and wealth inequality lend to a host of other social inequalities that keep people of color locked into cycles of hardship and poverty,” says Wanjiku Mwangi director of UFE’s “Racial Wealth Divide” program. “If we do not change course, our economy will not be able to provide for the swelling numbers of blacks and Latinos out of work, in poverty and in prison.”
If current trends continue, in 2042, median black family income will be 61 cents to every dollar of white median family income. Latinos, who account for the majority of population growth, will continue to experience a decline in economic security, earning only 45 cents for every dollar of income earned by the median white family. In addition, black poverty will be nearly twice as high as white poverty, and poverty among Latinos will be more than 2.5 times greater than that of whites.
The report proposes policy solutions to significantly reduce the racial divide. Foreclosure relief, federal aid to states and targeted job creation programs are needed to both combat the economic slump and to reduce racial economic disparities. Longer-term strategies including equity initiatives, wealth-building programs, increasing taxes on the rich, strengthening safety net programs, ending the war on drugs, and humane immigration reform are needed in order to substantially reduce racial inequality.
“Dr. King noted in the 1960s that blacks have half the income of whites and are twice as likely to be unemployed,” recalls Mwangi. “Sadly, the same words could be used to describe the racial economic disparities that persist today. Closing the racial economic divide is a moral imperative, and should be reflected as such in our public policies.”
