The average Black household income was once 10 cents to the dollar relative to the average white family. Thomas J. Sugrue has an excellent piece in this month’s Washington Monthly on that persistent and growing gap. He identifies the factors that systematically prevented Blacks from building up and passing on wealth: exclusion from social security and GI bill benefits, challenges in getting market-rate mortgages, and marginalization in neighborhoods with depreciating housing values.The Clinton and Bush administrations set policies to encourage Black home ownership, but these made things worse:
But around the turn of the twenty-first century, there also grew up a huge new industry of predatory lenders that targeted members of minority groups, including those who already owned their homes and were persuaded to refinance on what turned out to be usurious terms.
So when the real estate bubble burst, it hurt Blacks much more than whites: 25 percent of African-Americans who purchased or refinanced homes from 2004 to 2008 have lost or are losing them, compared to 11.9 percent of white Americans. According to Sugrue, “the median black family today holds only $4,955 in assets.”Insightful as it is, the piece underestimates the crisis. Government jobs have historically been an important source of security for the Black middle class, and many of those jobs are disappearing. Neither party is addressing this urgent issue. It isn’t even on the GOP’s radar, and the blue policies of the past 30 years, which the Obama administration would like to perpetuate, are no longer working.