The Price of Race

Financial Justice Ideas and Issues Personal Writings

Los Angeles        As Obama gets closer to finalizing the Democratic nomination and the 50-50 odds that we may actually have an African-American as President, hardly 40 years after finally making sure that African-Americans could actually vote, sinks into the electorate and the chattering classes, it was interesting to note in a recent Economist some statistics on where we are economically in this fight.  The situation is better but only if you grade on the curve it seems, and the curve is based on looking backwards.

    The median black household income has risen from $22,300 to $32,100 in 2006 (based on 2006 dollars).  Black life expectancy has moved from 34 years of age in 1900 to 73 now more than 100 years later.  The good news is right there on those numbers.

    Median black household income though is still only 63% of white household income.  Black children at 17 perform at the level of white children at 13.  The longevity is still 5 years less than whites.

    White men are more likely to work than black men.  The percentage of black men in the workforce has fallen from 74% in 1972 to 67% in 2007.  Only 5% of business firms are black-owned even though 13% of the national population is black.

    I have cited in these pages before the fact that assets at the bottom 1/5th for white families are $24,000 while for black families in the bottom fifth are $57.  Whites in the middle fifth are 5 times wealthier than blacks in that fifth.

    Part of this is because blacks are more likely to put their money in the bank, where you earn little, while whites are more likely to invest in shares in the market where are likely to find better returns.

    A problem in city after city when African-Americans have won political power is that they have been hard pressed to deliver economic development that meaningfully changes these numbers for the masses of people.  The same problem will be facing a new President, and in this case a President that could profoundly want to deliver to his most reliable constituency.  The problem is clear.  The solution needs to be clear as well, and that will take some consensus building over the next six months.