By Charlène Crowell

(Trice Edney Wire) – As the global pandemic continues to claim victims and infect generations, virtually every dimension of life is being challenged. And those with the least financial resources before COVID-19 are challenged more than ever.

It is both a challenge and an opportunity for the leadership of the Biden administration, Congress, the Federal Housing Finance Agency, the Department of Housing and Urban Development, as well as the private sector to implement implementing policies and practices that reverse the country’s ever-growing racial trend. wealth gap. Proven wealth creation tools, such as targeted home ownership and expanding small business investment, together would bring lasting and meaningful change to those who have historically been financially marginalized.

In an effort to better understand and resolve the double sagas resulting from centuries of racial discrimination and COVID, leading universities, government agencies, public policy institutes and businesses are releasing new research that analyzes additional challenges of the pandemic that exacerbate inequalities racial history.

For example, from January to March of this year, blacks averaged 22 cents for every dollar of white family wealth, according to the Federal Reserve’s Institute for Economic Equity in St. Louis. These substantial discrepancies have remained largely unchanged from 1989 to the present, according to the Institute.

The disparities in the gap are also reflected in the findings of research conducted by Harvard University. This esteemed Ivy League institution drew a key distinction between America’s income and wealth inequalities.

“Income is unequal, but wealth is even more unequal,” said Alexandra Killewald, professor of sociology at Harvard, who studies inequality in the contemporary United States.

“You can think of income as the water flowing in your tub, while wealth is like the water in the tub,” she said. “If you have wealth, it can protect you if you lose your job or your home. Wealth is distinguished by the fact that it can be used as a cushion and that it can be passed directly from one generation to the next ”, offering families more choices and better opportunities in the present and the present. future… White Americans enjoy a legacy of benefits… The typical White American family has about 10 times the wealth of the typical African American family and the typical Latino family.

While the issues raised by the Federal Reserve and Harvard may sound like variations on an old theme, 150-year-old global finance company Goldman Sachs is urging the public and private sectors to invest in a targeted and sustained manner to close the gap of racial wealth in the United States. . Although the report focuses on black women, its projected results would also benefit black men.

“If the improvements benefit black women and men, we estimate a larger increase in U.S. employment of 1.7 million jobs and U.S. gross domestic product (GDP) of 2.1 percent, this which is $ 450 billion a year. “

Title, Black Womenomics: Investing in the Under-invested, the March 2021 report calls for access to capital, education, fair income, health care and housing to lay the foundation for reversing historic disadvantages, while creating financial independence and personal wealth.

Most importantly, the report calls for the participation of black people – and especially black women – to shape their own futures.

“[A]All efforts to effectively solve problems can only be successful if black women are actively involved in formulating strategies and shaping results. In addition, tackling discrimination and prejudice will be fundamental for real and lasting progress … The large wealth gap faced by single black women is particularly important as black women are increasingly likely to be mothers. single and breadwinner… Among black mothers, over 80% are breadwinners compared to 50% of white mothers, ”the report said.

How existing financial disparities make black women more financially vulnerable can be found in the report’s data points:

• Black women face a 90% wealth gap;
• The pay gap for black women widens throughout their working life, and particularly rapidly between the ages of 20 and 35;
• Black women are five times more likely than white men to use expensive payday loans;
• Black women are nearly three times more likely to forgo prescription drugs, and also much more likely than white men not to see a doctor because they cannot afford it; and
• The median single black woman does not own a home, and single black women are 24 times less likely than single white men to own a business.

Additionally, the shortage of affordable housing in the country translates into 85% of black women whose families face housing costs ranging from over 30% to 50% of their income. Once the monthly rent is paid, these overburdened households have little to cover utilities, food, childcare or other household needs.

According to a recent analysis from the Center for Responsible Lending (CRL), even black families earning a median income will need 14 years to save 5% down payment.

A legacy of historically low incomes and little intergenerational wealth available to be passed down through families leaves most black Americans without the comparable financial benefits enjoyed by other races and ethnicities.

These and other circumstances lead many women – especially women of color – to turn to high-cost loans of just a few hundred dollars. While the typical $ 350 payday loan is marketed as a short-term solution to an unexpected expense, the reality for many low-income people is that the high-cost loan – which can carry interest of up to 400% – becomes yet another long term. – a long-term financial burden that worsens financial strains at[everyrenewal[everyrenewal[chaquerenouvellement[everyrenewal

“Predatory high-interest lenders are dragging people into financial quicksand, making them more susceptible to a range of harms, such as losing their bank account, defaulting on bills, losing their car and the declaration of bankruptcy. It is low-income consumers and communities of color disproportionately – whom lenders target – who are being harmed, ”said Ashley Harrington, of CRL in testimony this summer before the US Senate Banking Committee.

The harms of wealth inequality also extend to the wider U.S. economy, according to the Goldman Sachs report. In her view, expanding opportunities for black women who are often at the bottom of the economic ladder can create a path to individual and national prosperity. “Overcoming these unfavorable economic trends would not only make a society fairer, but also richer. We estimate that addressing the income gap for black women could create 1.2 to 1.7 million jobs in the United States and increase the level of the annual gross domestic product (GDP) of the United States by 1 , 4 to 2.1% each year, or 300 to 450 billion dollars in current dollars.

The sum of these results underscores the frustration felt by much of black America. The Civil War ended slavery and promised the emancipated 40 acres and a mule. The civil rights laws of the 1960s promised to eliminate discrimination in voting, housing and public housing. Second, affirmative action programs of the 1970s promised equal employment opportunities in areas previously off limits to blacks and other people of color.

It is time for this nation to keep its age-old promises. Creating neighborhoods of opportunity from pockets of poverty would strengthen cities and suburbs. If corporate leadership joined with administration and Congress in ensuring that black America and other people of color share in the nation’s prosperity, everyone would be better off.

No person and certainly no community will ever beg to get out of poverty. But down payment assistance for first-generation mortgage homebuyers would be a family estate. Likewise, the creation of an equity investment fund intended for small black businesses in difficulty would preserve the neighborhood’s opportunities, including more permanent jobs. .

In the timeless words of the late Dr Martin Luther King, Jr., “All we say to America is, ‘Be true to what you said on paper.’

Charlene Crowell is a senior member of the Center for Responsible Lending. She can be contacted at [email protected]