Economic gains suffer big setback in Great Recession

Millions of Americans endured similar financial calamities in the recession. But, for Goldring and many others in the black community, where unemployment has risen since the end of the recession, job loss has knocked them out of the middle class and back into poverty. Some even see a historic reversal of hard-won economic gains that took black people decades to achieve.

Goldring remembers her mother taping the window shades to the wall so no one could see them stealing electricity. She remembers each time she sat on the curb with her three brothers, surrounded by her family's belongings, waiting for a new place to live. Sitting on those curbs, she promised always to pay her bills on time.

Now, after finding herself poor again, “the only word I can say is devastated,” says Goldring, 58.

“For me to live that life we were so comfortable in, we never had to worry about finances, we always had money where I can help my kids and my grandchildren – to go to calling my daughter to borrow $100 because I can't pay a bill …” Goldring's voice trails off as she struggles to hold back tears.

Economists say the Great Recession lasted from 2007 to 2009. In 2004, the median net worth of white households was $134,280, compared with $13,450 for black households, according to an analysis of Federal Reserve data by the Economic Policy Institute. By 2009, the median net worth for white households had fallen 24 percent to $97,860; the median black net worth had fallen 83 percent to $2,170, according to the EPI.

Algernon Austin, director of the EPI's Program on Race, Ethnicity and the Economy, described the wealth gap this way: “In 2009, for every dollar of wealth the average white household had, black households only had two cents.”

Since the end of the recession, the overall unemployment rate has fallen from 9.4 to 9.1 percent, while the black unemployment rate has risen from 14.7 to 16.2 percent, according to the Department of Labor.

“I would say the recession is not over for black folks,” Austin says. He believes more black people than ever before could fall out of the middle class because the unemployment rate for college-educated blacks recently peaked and blacks are overrepresented in state and local government jobs that are being eliminated due to massive budget shortfalls.

Maya Wiley, director of the Center for Social Inclusion, says the anti-discrimination laws passed in the 1960s took decades to translate into an increase in black economic security – and that was before the recession.

“History is going to say that the black middle class was decimated” over the past few years, Wiley says. “But we're not done writing history.”

This May, black male employment fell to the lowest level since the government began keeping track in 1972. Only 56.1 percent of black men over age 20 were working, compared with 68.3 percent of white men.

Chris Wilder, a Philadelphia journalist, lost his job in 2008 as the media industry suffered huge losses.

Unemployment benefits amounted to about one-third of his salary. Ever since they ran out, his income has been near zero, other than sporadic freelance work.

If not for a policy in his apartment co-op to help people who lose their jobs, “I might be living with my mother,” he says.
He has felt depression and anxiety. He has gone from a six-figure salary to having to check his balance before using his bank card. “I miss being able to go into a store and go off budget,” he says. “Now, when I go to shop for something, I have to stick to exactly what I came to get.  I never have money to buy anything else.”

Wilder, 43, grew up solidly middle class, the son of a newspaper editor and a college administrator. Now the single parent of a 15-year-old, he has managed to keep his son in cleats and baseball camps but thoughts of dying poor have crept into his mind. All his savings are gone.

“It's definitely harder for black people to get jobs,” Wilder says. “With the economy as bad as it is, people are hiring nephews and family friends and friends of friends. It's hard for black people to break that cycle. We don't own or even run the big companies.”

“It's hard to keep jobs, as well, because they're gonna ‘last hired/first fired’ you,” he adds.

Wilder isn't giving up on finding a job in his field “but I should.”

“I call everyone. I send resumes. It is extremely rare that I get a call back,” he says. “When I was growing up, I never imagined there would be a time when I was out of work for three years.”

College-educated blacks fared worse than their white counterparts in the recession. In 2007, unemployment for college-educated whites was 1.8 percent; for college-educated blacks it was 2.7

percent. Now, the college-educated unemployment rate is 3.9 percent for whites and seven percent for blacks.

“I've definitely played by the rules,” Wilder says.

He is not desperate enough to break the law but “I see why people become drug dealers.”

Horace Davis did become a drug dealer. He illustrates another dimension of the recession's impact on blacks: While law-abiding folks are falling out of the middle class, those who got in trouble with the law are further than ever from a second chance.

After serving four years for drug trafficking, Davis walked out of prison into the middle of the recession in 2008. “I thought to myself, I'm older, I need to get a job, move on. The dope game was dead to me,” Davis says, sitting on a concrete porch in an Asheville, N.C., housing project.

In the past few decades of the federal “War on Drugs,” harsh sentencing laws have sent a disproportionate number of black people to prison, even though blacks are not more likely than whites to sell or use drugs, according to a 2008 report by the Sentencing Project. Today, about 280,000 African Americans emerge from behind bars each year. They are often the last of the last to be hired.

After Davis got out, he spent months applying for dozens of jobs mopping floors or flipping burgers. He carried a letter from the state offering a $2,500 tax credit for hiring ex-offenders. He got one call back, from a chicken restaurant. “We'll be in touch,” Davis remembers them saying. They weren't.

“Nobody wants black felons in their businesses,” says Davis, 26.

A 2003 University of Chicago study by Devah Pager sent young white and black “testers” to apply for real low-wage jobs. Some of the testers were randomly assigned felony convictions. The study found that whites with felonies were slightly more likely to get callbacks than black applicants without criminal records.

“The penalty of a criminal record is more disabling for black job seekers than whites,” Pager and other researchers wrote in a follow-up study in 2009.

Davis says he learned skills in prison: “How to cook, clean, horticulture, janitorial. I can do it. I've been trained. Tile, carpentry, mortar, edging and trimming; all that. I can operate a backhoe, a roller. Any opportunity to do something that would show my talents, I'd do it. It would be my ticket out of the streets.

“I just need someone to give me that chance. A nice construction job, anything. I would hold onto that until I die.”

Some economists say the real black unemployment rate is as high as 25 or 30 percent, because government figures do not count “discouraged” workers who have stopped looking for jobs and dropped out of the labor force.

Davis now falls into that category, partly due to societal forces and partly, he knows, because of his own bad decisions.

Recently, police said they caught Davis with a half-ounce of marijuana. His trial date is approaching. As a habitual felon, he could get a 10-year sentence.

Some see a bitter irony in soaring black unemployment and the decline of the black middle class on the watch of the first black president.

“I thought Barack Obama could have provided some way out. But he lacks backbone,” Princeton professor Cornel West told truthdig.com recently.

He said Obama had sold out the poor and become “a black mascot of Wall Street oligarchs and a black puppet of corporate plutocrats … I don't think in good conscience I could tell anybody to vote for Obama.”

Yet many jobless blacks do not blame their plight on the president.

“I have no problem with Obama when I look at what the alternatives are,” Wilder says.

Goldring does not think Obama is doing a bad job, either. “The unemployment situation is not the best but I don't think it has a lot to do with him,” she says. “Fixing this economy, it's going to take time.”

Wiley, the Center for Social Inclusion director, says Obama should be applauded for several initiatives that have helped the black middle class, such as programs to modify certain mortgages and prevent foreclosure due to job loss.
She would have liked Obama to counter aggressively the suggestion that first black president would be showing favoritism if he specifically helped black people.

“It's the right thing to do for the nation,” she says. “Black people are a huge segment of the population; they're especially hard-hit and the country cannot recover if the black community, as well as the white community and others, does not recover.”

BY THE NUMBERS
• In 2004, the median net worth of white households was $134,280, compared with $13,450 for black households.

• In 2009, the median net worth for white households had fallen 24 percent to $97,860; the median black net worth had fallen 83 percent to $2,170.

• Since the end of the recession, the overall unemployment rate has fallen from 9.4 to 9.1 percent, while the black unemployment rate has risen from 14.7 to 16.2 percent.

• This May, black male employment fell to the lowest level since the government began keeping track in 1972. Only 56.1 percent of black men over age 20 were working, compared with 68.3 percent of white men.

• In 2007, unemployment for college-educated whites was 1.8 percent; for college-educated blacks it was 2.7 percent.

• Now, the college-educated unemployment rate is 3.9 percent for whites and seven percent for blacks.

Photo: Barack Obama