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Dr. Boyce Watkins; Racial Wealth Gap, Worse Than it’s Been in 25-Years…

July 26, 2011 by  
Filed under Misc., Money, News, Opinion, Weekly Columns

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(ThyBlackMan.com) A new study presented some disturbing, yet expected news about the sad state of economic affairs within the African American community. According to the study, the wealth gap between white and black Americans has become the widest that it’s been in the last 25 years. As it stands, whites have a wealth level that is 20 times greater than blacks, and 18 times greater than Hispanics.

Much of the drop in black family wealth is due primarily to the decline in home values and heightened unemployment during the great recession of the last three years. African Americans currently have the highest unemployment  rates in America, with the most recent data listing the rate at 16.2 percent.

The wealth gap is the largest that it’s been since officials began tracking the disparities back in 1984. At that time, the gap was merely 12-to-1, implying that African Americans are worse off than they were in the 1980s, when Ronald Reagan promoted trickle-down economics, which destroyed black communities everywhere.

I am afraid that this pushes us back to what the Kerner Commission characterized as ‘two societies, separate and unequal,'” said Roderick Harrison, a former chief of racial statistics at the Census Bureau. “The great difference is that the second society has now become both black and Hispanic.”

Another reason that whites are so much better off than blacks is because they are more likely to own stocks. The same Wall Street bankers who caused the recession were the first to be bailed out, leading to a quick recovery for those who owned securities. Whites are far more likely than blacks to own 401(k) and IRA plans, in addition to stock funds, with these assets accounting for 28 percent of their wealth. On the contrary, only 19 percent of black wealth comes from these assets.

Each time I notice how much worse off the black community has been during the last three years, my mind goes back to the statement by President Obama, in which he argued that the “rising tide will lift all boats” as it pertains to the economic recovery. The argument by the Obama Administration was that by dealing with the broader economy, African Americans would naturally benefit. At the time, there were those who expressed concern, given that this policy of ignoring economic inequality sounded a lot like a racialized version of trickle-down economics.

Since that time, black unemployment has risen by 150 basis points (14.7 percent to 16.2 percent), while white unemployment has declined (9.4 percent to 9.1 percent). Additionally, black family wealth has dropped to levels we haven’t seen since I was a little boy. Having so many Wall Street bankers on the Obama Administration economic team doesn’t add much hope that perhaps our government even remotely understands the complexities of deep and historic wealth gaps between blacks and whites in America.

Like a festering disease left untreated, racial inequality has resurfaced in America. Most interesting is that nearly every member of Congress and the Obama Administration has remained tone deaf to the issue, arguing that there are bigger fish to fry than the uncomfortable issue of race. The differences in composition of black wealth vs. white clearly implies that different economic medicine must be used for different segments of our economy. One cannot always treat two different illnesses in two different sections of the body with the same medication. Trickle-down economics didn’t work in the 1980s and it is not working today.

The Republicans will surely jump on this information, arguing that African Americans have little reason to support President Obama. The problem they have is that history clearly proves that they won’t do any better. Their opposition to Affirmative Action programs, opposition to labor unions and desire to hammer social security, in addition to their commitment to ruthless and uncompassionate capitalism implies that they would only worsen the wealth gap themselves. Their hero, Ronald Reagan, is the one who sent our nation into the tailspin of deficit spending and greed that puts our nation on the brink of its first default in history.

At the same time, the Democrats expect African Americans to line up in lockstep with every issue that matters to them, but refuse to say a peep about the intense and persistent economic pain within black America. As a result, we have a black president who grants our community tremendous symbolism, but refuses to take a stand on racial issues because he knows that white liberals won’t like him anymore. As a result, he fills his cabinet with elitist Harvard cronies and Chicago political colleagues whose only interest is preserving power and manipulating our minds to ensure his reelection.

The evidence clearly shows, without question, that black people are not better off under Obama. It is up to the Obama Administration to provide evidence to the contrary, rather than hoping that their political foot soldiers will discredit anyone who speaks up on the issue. The rising tide is NOT lifting all boats, so we need a better solution than that.

Staff Writer; Dr. Boyce Watkins

Dr. Boyce Watkins is the founder of the Your Black World Coalition. For more information, please visit http://BoyceWatkins.com.



Comments

6 Responses to “Dr. Boyce Watkins; Racial Wealth Gap, Worse Than it’s Been in 25-Years…”
  1. Patsy says:

    Interesting article but it would have been interesting to talk also about underemployment. Too many times in the media, we hear about unemployment but what about underemployment???

  2. I don’t think the problem is with black and white at all. I think the problem is about erecting barriers to small businesses. Used to be, anyone could open up a little sideline business in the neighborhood and make some extra money that could be used to build a larger business or save money for a rainy day. People who might otherwise be unemployed could get a table and a sign and open a small business. Those people could see the direct benefit of their labor. Instead, those people are forced into the drug trade or worse, total unemployment. If an answer is needed, then here it is – get the foot of the Man off of people’s neck and they’ll make their own lives.

  3. Jamesofthecommons says:

    The wealthy of today,are from the wealthy families of yesterday;this is the very nature of capitalism.It takes money,”not hard work”to make money. Since as a general rule,the black Americans of yesterday were poor,you should not be surprised, that such a large percentage of African Americans are poor today.

    Now of course,I am not going to suggest that capitalism alone is responcible for the imoverishment of black Americans of today,nor those hardworking blacks of yesterday.The fact of the matter is, that racial descrimination on behalf of whites has,and still does,play a huge role,in the continuing scourge of black poverty.If you are an honest white person who has been beyond your own back yard, you know this to be true,because you like me,know full well what gets said and done behind the closed/locked doors of rooms inhabited by whites of all ages and socioeconomic status.
    Untill people of all races,ability,education,financial status,creed and faith are allowed to share of the abundance of the earth,no person nor people will know true prosperity nor freedom.

    Thank you to Dr.Watkins for allowing me to share my thoughts on your site.

  4. Wingnut says:

    Hi. Great article and fine comments.

    Unity amongst the poor and downtrodden is just another kind of army-building, and that leads to warring. We have plenty of US vs THEM warring (class warring) happening right now. No need to build more armies. The only unification that could possibly work… is the unifying of EVERYONE… in a FLAT system where all are treated fairly and equal (communalism). That would require the elimination of anything being tugged-over in the giant tug-o-war called capitalism, which is a get-a-leg-up pyramid scheme. What are the “devices” being tugged-over? Money and entitles of ownership… which all relates to CONTROL. Money doesn’t really have entitles of ownership, and thus, it really can’t be owned… but most USA (capitalist-) folk are bought into the belief that it CAN be.

    What if everyone quit using economies (money, ownership, price tagging)… and instead used a moneyless socialism such as that used by the US military supply system (requisition forms handed-out freely and no ownership, only custodianship)? What if EVERYONE was a member of the government… and a police officer to boot? Big government? Love it. Lets throw in a mentor/storyteller skill, too. What have you got? An “elder” figure in a Native American tribe (commune), correct? Wisefolk.

    Not a single other living creature on the entire planet… uses economies. Why do capitalists? We all see the pyramid scheme symbol on the back of the USA dollar… and we know its Columbian Freemason. We know that the USA gov resides in a district of COLUMBIA and is not part of the USA proper. Why do we deny that economy usage and OWNing causes rat-racing servitude-infested pyramid schemes? Its right in front of our noses! We force the USA 18 yr olds to join the competer’s church (the free marketeers pyramid scheme)… OR STARVE… OR ELSE. That’s felony extortion and forced religion. And do we see any Chicago mob-like “pay up or lose your wellbeing” going-on in capitalism’s pyramid scheme? RAMPANT!

    All we have to do is own-up to a few things, and then we will realize that economies and pyramiding just will not work. Just like the childhood pyramids we failed miserably-at… the upper kids are heads-in-the-clouds while the kids on the bottom are crushed. Pyramids ALWAYS collapse… always will. They get too top heavy from too many… trying to “get a leg up” on each other and on the self-created cost-of-living (surviving).

    Its all about spirography… what goes around… comes around. Issue a bunch of invoices/bills/demands, and it comes back into your own mailbox. Issue a bunch of giving and love, and it comes back too. That happens because the tip of each spirograph petal (each person)… is a loop, not a point. All giving… handed-on. All billing, handed-on, loop, loop, loop, home. No matter which way you start the spirograph gears rolling (billing or giving)… the pen ALWAYS, EVENTUALLY, returns to its starting place. Spirography. Get to know me!

    So, own-up to pyramiding, and own-up to the wisdom and morals of FLAT, FAIR, PURE EQUALITY (the attempted policies of childhood schools and churches… everyone treated the same, capitalist or not)… and we’re on our way to more sanity. Abolish economies and ownership. Use custodianship. Build repairable and re-usable. Follow the rules used by the USA military for delineating a luxury from a necessity… and build a flat commune. After all, communication, communion, community, the very best things in all of humanity… are based upon the word ‘commune’. GET to know it instead of being unfoundedly fearful of it. You’ve not yet seen “communALism” in all of history. Why not give it a try? Turn OFF the racing system and try sharing.

    Best Regards!

    Larry “Wingnut” Wendlandt
    MaStars – Mothers Against Stuff That Ain’t Right
    (anti-capitalism-ists)
    Bessemer MI USA

  5. Tyler says:

    These issues affect poor people of all races. I acknowledge the disparity the statistics presented in this article in regards to a higher percentage of black people suffering from unemployment, the decrease in wealth etc. However, I would like readers to understand the following statistic:

    White population in U.S.A 80% x 300 million

    Black population in U.S.A 12% x 300 million

    Yet, our country still bickers about racial issues when poor people of all races are suffering from the same economic and poitical descrimination. We must unite poor and middle class people of ALL races to stand up for reform, and in time, the disparity between Black people and White people will even out.

  6. Mike says:

    Dr. Watkins,

    Good article. You have a talent for breaking complex ideas down. A news article on this subject was buried on page 6 of the Wall Street Journal today. It should have been on the front page in my opinion. Regardless of the cause, this is clear evidence that we are going in the wrong direction as a society and need to start figuring out some answers. However, I disagree with the idea that white liberals are going to flee if Obama starts hitting racial issues. What are they going to do? Vote republican? It has a lot more to do with keeping moderates on board. Said moderates could be black or white because, as you pointed out, Obama is not exactly hitting a home run in the black community. In fact his policies are hurting the working poor and lower middle class in general. The working poor just happen to be a larger percentage of the black and latino community than the white. The only boat this tide is lifting is people who had money to begin with. At least with ‘trickle down’ there was a CONCEPT of money trickling down. Now we don’t even have that anymore. Unity among all working poor and lower middle class is the only answer. It’s time to start watching each others backs.

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