Thursday, April 19, 2012

For African Americans, Time Does Not Heal Economic Wounds

Three years after the Great Recession, America still sees itself in the midst of an economic recovery, with families struggling with long-term unemployment or in jobs that barely pay enough to make ends meet. all communities have been affected during the three-year period, but according to a recent report by the Center for American Progress, African Americans are “the clear exception” to the improvement of economic distress caused by the recession.

The report finds that African Americans continue to experience higher unemployment rates and inadequate job opportunities, and are more likley to have lower household incomes and lack health insurance than other groups.

As the report indicates, the unemployment rate of African Americans is “twice as high as that of white Americans,” and for African Americans who are employed, their median weekly earnings were only $674, which is significantly less compared to whites and Asian Americans who earned $744 and $866 each week respectively. During the recession, the number of African Americans working below the federal minimum wage increased by 141.5 percent, and to this day, the number of African American workers who make minimum wage continues to rise. Because of this, nearly one in four African American families found themselves below the poverty line in 2010 and by the fourth quarter of 2011, only 45.1 percent of African Americans were homeowners, which is lower than the group’s homeownership rate at the end of the recession in 2009.

Regardless of the number of jobs that are being created, African American private-sector workers are losing access to employer-based retirement plans. In 2010, one year into the economic recovery, only 34.4 percent of African American private-sector workers had access to an employer-based retirement plan. In the same year, the percentage of African Americans lacking health insurance was 20.8 percent.

The report challenges policymakers to “reduce the inequities in economic security by race and ethnicity” by making policy recommendations including creating quality jobs, improving unemployment insurance and enacting comprehensive immigration reform.

Unlike low-wage jobs, quality jobs provide health insurance and retirement benefits, which are important for families to recover wealth lost during recession and after. Workers making minimum wage or below are forced to work more hours, which makes them ineligible for unemployment benefits.

States could fix this problem by reducing their restrictions on unemployment benefit eligibility. In addition, enacting a comprehensive immigration reform would help provide better working conditions free from discrimination. As the report indicates, many immigrant workers, specifically those who are unauthorized, endure low wages because of the fear of being fired or deported. With reform, the industry’s standards in wages, safety, and benefits would show a promising improvement.

It’s going to be interesting to see how policymakers react to this report and how closely they will listen to the recommendations. The labor market has been adding jobs over the last few years, but policymakers need to understand that it is important to start focusing on problems that disproportionately impact people of color and start creating policies that address their needs.

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