“That last figure is crucially important, because although home values are plummeting for almost everyone in the United States, African Americans were disproportionately steered into the worst-term, higher-cost, rip-off subprime loans.”______________________________
by Robert Weissman
(April 05, Washington, Sri Lanka Guardian) Yesterday marks the 40th anniversary of the assassination of Dr. Martin Luther King, Jr.
If the United States makes progress in closing the black-white income gap at the same rate it has since King was assassinated, there will be income equality in 537 years. If the racial wealth divide closes at the same rate as it has since 1983, it will take 634 years before African-American families have the same wealth as whites.
And that's the optimistic way of looking at things.
"The Unrealized American Dream," a new report from the Program on Inequality and the Common Good of the Institute for Policy Studies, shows that the United States has made significant, if wholly unsatisfactory, progress in closing racial education gaps. But income and wealth inequalities remain monstrous.
With the Iraq war continuing with no end in sight, this anniversary of King's death is spurring some reflection on King's actual views and actions -- especially in the last years of his short life -- rather than the standard iconization that focuses solely on his opposition to legal segregation. The real-world King harshly condemned the Vietnam War and was increasingly focused on questions of economic justice. He was killed in Memphis, where he had come to support striking garbage collectors.
Dedrick Muhammad is the author of "The Unrealized American Dream." He says two key factors explain the failure to close income and wealth gaps.
First, the government investment programs of the 1930s and 1940s -- everything from the New Deal job creation programs to the GI Bill of Rights -- played a key role in building the broad U.S. middle class. But African-Americans were not able to participate in or benefit equally from many of those programs, because of legal and de facto discrimination.
Second, since the late 1970s, pro-corporate, pro-rich deregulatory and tax policies, along with corporate globalization, have led to an overall concentration of wealth in the United States. This has made income and wealth gaps much worse in the whole society. Middle class security has been weakened, and many working class communities and families have been devastated. There are relatively few, and proportionately fewer, African-Americans benefiting from recent decades' wealth-concentrating policies and corporate power grabs.
Indeed, one way to look at the data compiled in "The Unrealized American Dream" is that the country made modest improvements in reducing inequalities through the 1960s and 1970s, but that things have been stagnant or gone backwards since the late 1970s. Black per-capita income as percentage of white income started at 54 percent in 1967, reached 60 percent in 1976, and has held more or less constant since. It was at 57 percent in 2005.
That's income. Wealth is worse. Here are snapshots of the current state of wealth inequality:
* Median household wealth by race (2004) -- White: $118,300. Black: $11,800.
* Median financial wealth by race (2004) -- White: $36,100. Black: $300.
* Median home equity by race (2004) -- White: $82,200. Black: $11,500.
That last figure is crucially important, because although home values are plummeting for almost everyone in the United States, African Americans were disproportionately steered into the worst-term, higher-cost, rip-off subprime loans. A January report that Muhammad co-authored, "Foreclosed: State of the Dream," concludes that the subprime crisis "represents the greatest loss of wealth for people of color in modern U.S. history." The report estimates African-American borrowers will lose between $71 billion and $92 billion from subprime loans (Latinos will lose a comparable amount).
Muhammad notes that while the deindustrialization of the last quarter century has hardest hit working class African Americans, the current housing crisis is going to hit hardest at the middle class. Upper-income African Americans were almost as likely to be steered into high-cost mortgages as lower-income African Americans, and twice as likely as lower-income whites.
In short, when the data is in for 2008/2009, racial wealth inequality will almost certainly be worse than it was a few years ago.
There's little mystery about how to redress racial and overall income and wealth gaps. The key features include: a rebalanced tax policy; federal involvement to assist people get fair mortgages for home purchases; single-payer healthcare; massive public investment in infrastructure and to meet pressing environmental needs; real guarantees for workers to organize unions without employer interference; and a reversal of corporate globalization.
Muhammad says we are now in a "serious step-back recession." But he remains hopeful. The mounting dissatisfaction with the state of the economy, he says, offers "the opportunity to advance a progressive agenda" -- the economic justice agenda for which King was working when he was killed.
(Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor and director of Essential Action.)
- Sri Lanka Guardian
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