Beaver County Blue

Progressive Democrats of America – PA 12th CD Chapter

Recession Hitting Local African-Americans Hard

Posted by carldavidson on December 5, 2011

Housing equity has plummeted, taking families’ wealth with it

By Mark Roth
Pittsburgh Post-Gazette

Dec 5, 2011 – Joyce Davis began to see the change in Penn Hills after the recession hit.

Ms. Davis is executive director of the Lincoln Park Community Center, which runs a food pantry that serves about 150 families each month. About 90 percent of them are African-American.

Before the latest economic slump, said Ms. Davis, who is also head of the Penn Hills NAACP chapter, the pantry served only 90 to 100 families each month, and the main customers were elderly people and single mothers.

But in the last few years, she has seen more and more men who have either lost their jobs or can’t find work.

"They basically don’t have enough money to really take care of the needs of their families," she said. "I have had people come who have actually cried because they said ‘Before, I was making donations to the pantry, and now I need help from it.’ "

It doesn’t surprise her.

"When companies start laying off people, those who have the least seniority go first, and those often are African-American employees. As companies cut back and do more with fewer people, you’re not going to get hired."

National studies bear that out.

As of last month, black unemployment in the U.S. was 15.1 percent, nearly twice as high as the 8 percent rate for whites and higher than the 11.4 percent rate for Hispanics.

Even more telling is the gap in household wealth. Most Americans’ chief source of wealth is the equity in their homes, but the recent housing collapse has hit minorities particularly hard.

Between 2005 and 2009, the median home equity value for black Americans fell from $76,910 to $59,000, a drop of nearly a quarter, according to the Pew Research Center.

The housing slump was even worse for Hispanics, whose median equity went from $99,983 to $49,145, a 50 percent dropoff. Median home equity for whites fell from $115,364 to $95,000, an 18 percent slide.

Even worse, a third of black and Hispanic households had zero or negative wealth in 2009 — meaning they owed more than the total value of their assets — compared with 15 percent of whites who were in that predicament.

The drop in housing values is part of a historic pattern in black neighborhoods, said Larry Davis, dean of social work at the University of Pittsburgh.

Mr. Davis said he ended up donating his mother’s house in Michigan to Catholic Charities because it wasn’t worth trying to sell.

"Properties in black communities don’t appreciate," he said, and that was true even before the latest recession. "Some have even argued that black people should not put their money in homes, because it doesn’t pay off for them."

Rashawn Ray, a sociology professor at the University of Maryland, ran into the same phenomenon when he was moving to that campus this year from an appointment at the University of California, Berkeley.

Mr. Ray and his wife, who are black, were able to find big homes in mostly black neighborhoods in Prince George’s County, Md., for about $400,000, but in nearby, mostly white Silver Spring, homes half that size were selling for $700,000 to $800,000, he said.

"So when my wife and I looked at resale value vs. space, now we had to factor that in, and whites don’t have to do that as much. The reason why these houses were sitting at $400,000 when they should have been worth at least $600,000 was just the demographics of the area."

These longstanding differences in white and black wealth in America even affect the way that blacks define their social class, Mr. Ray’s research has shown.

Among African-Americans, having a college degree is a much more important indicator of being middle class than how much money someone earns, he said.

One reason for that is that middle-income blacks are more likely to live next to lower-income blacks than are whites who have different pay.

Because of historic patterns of housing segregation, he said, "most blacks who are middle class are living in black neighborhoods that are right beside black working-class neighborhoods."

Many blacks also are less likely to define themselves as middle-class for a more subtle reason, which he said could be called the "hailing a cab" effect.

"I’m a professor," he said, "and it would be just as difficult for me to catch a cab in New York City as it would for a black garbageman, but society tells us that there should be a difference between us when it comes to garnering certain privileges of status.

"But when you have a racialized experience, the president, a professor, an accountant and a sanitation worker can be standing together, and people only see them as black males."

Forty years after the civil rights movement, he said, it is unusual to find white Americans who believe that blacks are inherently inferior, Mr. Ray said. But research by Matthew Hunt of Northeastern University shows that it is common for whites to believe that blacks are lower on the economic ladder because they lack motivation or education.

That’s not what Joyce Davis has been seeing at her center, though.

"After the recession hit, I started to see a lot of people who had either been laid off or were students who had just graduated but had not been able to find a job to allow them to afford to live.

"I talked to these young people, and they told me about the huge number of applications they had put in, but they’re not even being called back for the jobs."

Read more: http://www.post-gazette.com/pg/11339/1194632-56.stm?cmpid=news.xml#ixzz1ffGUpoPP

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