 The fact that Black women possess so little wealth is a product of institutional and historical oppression, not a lack “personal responsibility.” |
A shocking study released last week revealed to the
world that the average median wealth for women
of color between the ages of 36-49 is only $5. By
comparison, the average median wealth of white
women in the same age group is $42,600—still only 61%
of their male counterparts. These statistics confirm what
has long been a visible feature of U.S. capitalism—that
one’s place in society is based primarily on the class,
nationality and gender that a person is born into.
The study was conducted by the Insight Center for
Community Economic Development, analyzing data
collected by the Federal Reserve in 2007. These numbers
thus represent the grim economic reality prior to
the current recession. A United for a Fair Economy report
has since stated that the sub-prime mortgage crisis is
producing the greatest loss of wealth in U.S. history for
African Americans.
The study defined “wealth” as the sum of one’s income
and assets subtracted by one’s debt. Using this formula,
they determined that for all working-age Black women
(ages 18 to 64) the median wealth is only about $100.
Forty-six percent of these women had zero or “negative
wealth,” which means their debt was far greater than
their income and assets. Latina women do not fare much
better—possessing a median wealth of only $120—with
45 percent having zero or negative wealth.
While the average wealth among white people is
significantly higher, and the proportion of whites with
zero or negative wealth is far lower than that of people of
color, these figures alone can be deceiving.
White people as a whole have certainly not escaped
the devastating effects of capitalism. In fact, vast sections
of white workers have practically nothing. The 23
percent of single white men and women (ages 18-64) who
have zero or negative wealth amount to tens of millions
of people in very real poverty.
Moreover, although the median wealth of $42,600 for
single white women certainly seems large in comparison
to that of Black and Latina women, it hardly amounts to a
life of real security. A single white woman—for instance,
a secretary—who bought a house 15 years ago with a
$100,000 mortgage, and has since paid off half of it, could
technically have $50,000 in “wealth” according to this
study. But that does not mean she has $50,000 sitting in
the bank; in fact she could have almost nothing in the
bank and still be living check to check.
Medical emergencies, housing crises, or college
expenses easily and frequently drain that sort of
“wealth”—a portion of one’s housing equity or a modest
“nest egg” in the bank. Instead of having “wealth” to fall
back on, many of these workers are in fact teetering on
the edge of poverty as well.
The real story of the economic gap between whites
on one hand and people of color on the other requires
going deeper than numerical averages and the potentially
misleading definition of “wealth.” The question is
why Black and Latino communities remain so disproportionately
poor, without even the most meager forms
of economic protection that many working-class white
families have access to.
What explains the “cycles of poverty?”
 The logic of capitalism—which has been enforced upon Black people since the beginning of the transatlantic slave trade—remains just as powerful today. |
According to a recent study conducted by Bread for
the World, 34 percent of all Black children
live in poverty, and an estimated 90 percent
will participate in a food assistance
program before they reach the age of 20.
What explains these shocking statistics
that point to the cyclical nature of poverty
in the African American community?
These predictions of continued poverty
among Black children are not based
on the idea that Black families will make
worse decisions than their white counterparts.
Rather, they are based on an
assessment of the long-term economic
trends that have afflicted Black and
Latino communities and are unsolvable
under capitalism. This problem is clearly
institutional and historical, not a product
of insufficient “personal responsibility.”
A big part of the wealth disparity has to do with the
transfer of inheritances from one generation to another.
In a capitalist society, it is accepted that wealth is largely
inherited, and the American Dream is based around the
idea that poor families can struggle to give their children
opportunities they never had. Black and Latino families
have been historically cut off from this intergenerational
transfer—the basis of “family wealth” that is the first line
of support during hard economic times.
A PSL Editorial “Washington boycotts Conference
Against Racism—again” addressed this issue a year ago:
“Throughout U.S. history, Black workers were routinely
the last hired and first fired. During the Great
Depression, the Social Security Act of 1935 did not cover
agricultural and domestic laborers—which constituted
90 percent of Black workers. Absent Social Security benefits,
large numbers of Black families had little or nothing
left by the end of life to pass on to the next generation
thus reinforcing the differential in opportunity and support
between Black and white youth.
”In the mid-twentieth century, the government’s Federal
Housing Administration helped create the white suburban
“middle class” by providing $120 billion in housing
equity to real estate developers that almost entirely
excluded Black families.”
Black workers maintained a significant share of
industrial jobs throughout the 1950s and 1960s, but
remained confined to under-funded urban centers (or
the still poverty-stricken Deep South), while tax dollars
flowed to suburban educational systems and job
expansion. It is thus no surprise that
the decades-long process of deindustrialization
has hit Black workers the
hardest. The removal of manufacturing
jobs left urban workers to scrap
for low-paying service work (such as
retail), where it is impossible to accumulate
wealth. Others found work in
unionized public sector jobs, which
seemed to promise the opportunity of
a middle-class lifestyle.
In most foreclosure “red zones,”
however, it has been precisely this so-called
Black “middle class” that has suffered
most. This is due largely to a lack
of inherited family wealth, as well as
the predatory lending schemes that banks
have used to target Black and Latino families
in particular.
Unfortunately, the Insight Center study
also failed to address the real impact of
the racist police state, which has focused
in on deteriorating urban communities
and thrust permanently unemployed
Black and Latino workers in mass into the
prison system. This 30-year state assault
on urban communities is the main reason
the United States has the highest prison
population in the world. Given the scarcity
of decent-paying jobs under capitalism,
to possess even the smallest criminal
record can disqualify one from the opportunity
of meaningful economic advancement.
In today’s economy, having just one
family member out of work has a serious
effect on the entire household.
The debt phenomenon
Debt is a huge problem for working
people of all nationalities. The mainstream
media frames this issue, falsely, as
another issue of “personal responsibility,”
and teach workers to be ashamed of debt.
In fact, the debt phenomenon is a
natural outgrowth of the trends of capitalism.
Although the working class has
become far more productive in the last 40
years and the national wealth has nearly
doubled, real wages for U.S. workers have
been stagnant over the same period. This
is largely due to the process of deindustrialization
and the lack of union power.
During this same period, however, the
process of globalization—which privileges
the U.S. dollar—allowed many foreign-
produced items to remain available
to U.S. workers.
But if the capitalist class is unable to get
rid of all its products at a profit, because
wages remain too low to consume them,
a crisis of overproduction occurs. When
the capitalists cannot sell, the entire system
is in jeopardy. So what is relied upon
to bridge the gap between higher prices,
sinking wages and an overproduction of
goods? Credit, loans and mortgages. It is
no coincidence that the personal credit
card—available to the average worker—
emerged during precisely this same
period. They provided bankers with the
added benefit of keeping workers trapped
by high interest rates, always paying bills,
but never paying off their debts entirely.
The debt crisis has only intensified
with the current recession. Right now
companies are firing workers left and
right and many of those who are able to
keep their jobs have had to take pay cuts,
furlough days and give up wages and benefits.
Credit makes up the difference.
African Americans and debt
The Insight study revealed that women
of color carry especially high burdens of
credit card debt. Some conservatives were
quoted as saying that Black women just
were not taught good values and responsibility.
The idea is that many Black women
foolishly chose to fall into debt over nonessential
material possessions.
But the numbers prove that kind of
racist stereotyping wrong. Most of this
debt is generated from “survival spending.”
It is further exacerbated, according to the Insight study, by the fact
that women of color are more likely to use
their own financial resources to help out
extended family members.
In 2007, 62 percent of all bankruptcies
in the United States were linked to health
and medical expenses. Even with insurance,
any medical crisis can send workers,
especially underpaid workers, into serious
debt. In 2006, approximately one third of
all working age African Americans had no
health insurance whatsoever. We can only
assume that health-induced debt especially
burdens African Americans.
The other main cause of debt is higher
education. The average student loan debt
in this country right now is $23,200. A
2002 study from the State PIRGs’ Higher
Education Project revealed that 39 percent
of all students graduate with what they
deem to be “unmanageable levels of debt.”
The study called “unmanageable” those
debts that require monthly payments that
are more than 8 percent of their incomes.
For African American students, the
number with unmanageable debt was
even higher: an astronomical 55 percent.
Again, the lack of family wealth is the real
culprit: “71 percent of students from families
with incomes less than $20,000 graduated
with debt, compared to 44 percent of
students from families with incomes more
than $100,000.”
Black women and the workplace
In addition to these structural and
historical factors, Black women are also,
of course, victims of old-fashioned job
discrimination, on both racist and sexist
grounds. Black women with jobs
earn $0.85 on the dollar earned by white
women. Black women earn $0.87 for
every dollar earned by Black men and
$0.63 for every dollar earned by white
men. Women with children are paid less
than women without children even if
they are equally qualified.
In nearly 44 percent of Black families
with children, a woman is the primary
breadwinner. The grim economic situation
confronting Black women thus has
even more far-reaching implications in
terms of addressing the community’s
disproportionate poverty. The unemployment
rate for Black women is nearly double
that of white women and white men.
Looking forward
The Insight Study draws idealistic conclusions
about the possibility of stimulating
business ownership among Black
women as a means to resolve these longstanding
cycles of poverty. Even in the
best economic conditions, starting small
businesses is often a losing enterprise
because of corporate control of the markets.
In the worst of times, like the present,
these losing odds become simply
impossible. Moreover, the Insight Study’s
recommendations could only apply to one
section of college-educated Black women
with some limited access to capital. Their
prescriptions for “equality” really amount
to mirroring the class stratification among
whites, rather than achieving economic
security for all workers.
The problems of Black women’s
unequal status in society—and the
wealth gap—cannot be solved with this
or that policy proposal. The whole question
revolves around the historical experience
of Black people as an oppressed
nation. That which forged the African
American people together—centuries of
unpaid and still uncompensated enslavement—
also accumulated wealth for the
white ruling classes.
Of course, policy think tanks and analysts
would rather not address this history
when they calculate wealth. They do not
look at decades of underdevelopment in
Black communities and the widespread
destruction of Black families by the racist
prison industrial complex and the War
on Drugs.
Instead, they hold out the elusive
dream that the next generation of Black
youth will finally have the conditions to
“catch up” to whites. Some mistakenly
believe such conditions exist now because
of changes in racial attitudes or because
a few African Americans have ascended
to positions of power. In fact, the logic
of capitalism—which has been enforced
upon Black people since the beginning
of the transatlantic slave trade—remains
just as powerful today.
African Americans have, of course,
won monumental gains under capitalism
as the result of a militant struggle
for equality that they have waged for
generations. The achievement of formal
legal equality and the elimination of the
most blatant discriminatory barriers to
employment provided space for Black
women to surge into the workforce. As a
result, in the 1960s and 1970s, the income
growth among Black women outpaced
that of other groups.
But these trends have since gone in
the opposite direction. The capitalist
system’s non-stop squeezing of all workers
for more and more profit provides no
space for African Americans to “catch
up” in terms of wealth. The only potential leveling out that may take place
down the road is an equality of poverty,
as white workers are systematically losing
their homes, retirement plans and
higher-wage jobs.
The special oppression that keeps Black
women so far behind does not have to be
a permanent condition. But it cannot be
overcome until capitalism—the system
that spawned that oppression and continues
to profit from it—is overturned.
