African-Americans’ economic setbacks from the Great Recession are ongoing – and could be repeated

The financial crisis of 2009, the worst since the Great Depression, was hard on all Americans. But arguably no group felt its sting more than African-Americans, who were already the most economically and financially vulnerable segment of the population going into it.

Even today, a decade since the Great Recession hit, blacks still haven’t fully recovered and remain in a precarious financial condition. What’s worse, Wall Street and policymakers are beginning to worry another downturn may be on the horizon.

I teach a class at the University of Florida called “Black Wall Street,” in which we explore the issue of capitalism as it pertains to African-Americans and examine historical data on income and wealth. In a nutshell, the numbers show blacks are woefully behind other groups and may never emerge from their rut if political leaders don’t do something about it soon.

Dr. Martin Luther King Jr. often spoke of economic justice. AP Photo

‘He merely exists’

The notion that blacks are especially prone to financial instability in the U.S. economy is hardly a new revelation.

Dr. Martin Luther King Jr., for example, often highlighted the particular plight of African-Americans in his crusade for civil rights. In 1967, during a speech in Harlem, he said, “If a man doesn’t have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness. He merely exists.”

The data before the Great Recession of 2008-2009 tell a stark story. In 2007, the average black family earned US$55,265, just 64 percent of a white, non-Hispanic household income of $86,732. For the poorest fifth of African-American families, the situation is even worse. They earned just 43 percent of the income of their white peers in 2005.

Furthermore, more than 20 percent of African-Americans earned less than $15,000 a year in 2008, nearly or more than double that of whites, Asians and Hispanics.

African-Americans are also far more likely to be unemployed. In the years before the Great Recession hit in 2008, for example, the jobless rate among blacks was typically around 10 percent, more than double what it was for whites.

Enter the Great Recession

Of course, the financial crisis was hard on everyone.

Millions not only lost their jobs but also had to contend with the prospect of defaulting on student loans and unpaid credit card debt, and even foreclosure on their homes.

And yet again, the Great Recession hammered blacks harder than other Americans because of their financial vulnerability.

The unemployment rate, for example, peaked at 10 percent in 2009 for all Americans. For African-Americans, it exceeded 16 percent – compared with a little under 9 percent for whites.

African-American family incomes also suffered more than whites’. The average black household earned $50,654 in 2010, 61 percent of a white family.