The Huffington Post
by Preeti Vissa
My colleagues in The Greenlining Institute’s Economic Equity team just spent several days in Washington, D.C., meeting with officials from the Federal Reserve, Small Business Administration and other agencies critical to Americans’ economic well-being. Part of their message was simple and painful: Don’t forget the millions of Americans for whom the Great Recession has never ended.
The National Bureau of Economic research tells us that the recession officially ended in June 2009, when the U.S. economy started growing again. But this rising tide definitely did not lift all boats.
The most recent data from the Census Bureau looks at household wealth from 2001 through 2011, over a year and a half into the supposed recovery, and it’s not a pretty picture. Remember that wealth can often be a better picture of a family’s financial security than income, because it measures the assets — savings, home equity, investments — that can get you through a job loss or other misfortune.
The wealthiest 40 percent of Americans gained during this period, with the top 20 percent seeing their median household net worth rise from $569,375 to $630,754. The other 60 percent lost wealth, with the poorest fifth of the country now having a deeply negative net worth — in the hole by more than $6,000. An awful lot of people would be in real trouble (as in at risk for homelessness) if they were out of work for much more than a couple of months.
Looked at by race and ethnicity, whites showed a small gain in net worth, but that gain went only to the top 60 percent. African Americans and Latinos saw their net worth plunge by 37.2 percent and 42.1 percent, respectively, again with the best results concentrated in the wealthiest segments of these groups (unfortunately, the Census report did not provide data for Asian Americans).
By way of comparison, the Dow Jones Industrial Average has risen about 70 percent since October 2008 (when it hadn’t even hit bottom yet). That’s great for the small slice of Americans who own lots of stock, but not so much for the rest of us. And that’s not just me talking. In a recent report, Standard and Poors found that economic disparities hurt the whole economy, writing, “the current level of income inequality in the U.S. is dampening GDP growth.”
A snapshot of recent trends, from 2008 to 2013, was released over the summer by the Federal Reserve. The Fed’s survey asked Americans a battery of questions about how they feel they are doing financially.
In some ways, the results are slightly more reassuring, with a majority saying they are “doing okay” (37.3 percent) or “living comfortably” (23 percent). But again, when you dig deeper into the numbers all is clearly not well for many of our neighbors.
Overall, more people said they were worse off in 2013 than in 2008 — 34 percent, compared to 30 percent doing better. Those with annual incomes under $75,000 were far more likely than those making more to see themselves as worse off, and those with incomes under $25,000 were by far the most likely to describe their financial situation as “much worse.” As with the Census numbers, people of color in the Fed survey seemed to be doing worse (and again no data were reported for Asians — am I noticing a pattern here?), with 17.3 percent of blacks and 15.7 percent of Latinos saying they were “finding it difficult to get by,” as opposed to 12.2 percent of whites.
While blacks and Latinos were actually a bit more likely than whites to say that their economic situation has improved since 2008, they were also more likely to have student loan debt and dramatically less likely to think they could get by for three months after losing their main source of income. Forty percent of Latinos and 42.5 percent of blacks had zero retirement savings or pension, compared to 25.4 percent of whites.
Such disparities are painfully apparent here in California. California’s unemployment rate has dropped a full five points since August 2010, to 7.4 percent, but for Latinos it’s 9.2 percent and for African Americans unemployment is still at 13.6 percent. Many rural areas, also hammered by drought, continue to struggle. The San Francisco Bay Area where I live has felt an economic earthquake from the boom in tech — one of the least diverse industries – that has left some doing extraordinarily well and others, disproportionately black and Latino, struggling simply to keep a roof over their heads.
Every part of the country has its own story, but the theme of inequality runs through them all.
That so many of our friends and neighbors face such profound financial insecurity after five years of supposed economic recovery tells me we have a lot of work to do if we’re serious about America being the “land of opportunity.” And I sure don’t see much sign of Congress trying to do anything about it.
Next time, I’ll discuss how we might open up some of those doors of opportunity, and what my colleagues heard while in Washington.