Magazine article The American Prospect

Recovering Opportunity: Racial Barriers Continue to Hold Back Millions of Americans-And Our Economy

Magazine article The American Prospect

Recovering Opportunity: Racial Barriers Continue to Hold Back Millions of Americans-And Our Economy

Article excerpt

When he signed the American Recovery and Reinvestment Act of 2009 (ARRA)--the economic stimulus package--President Barack Obama promised it would "begin the process of restoring the economy and making America a stronger and more prosperous nation." The act invests some $787 billion in unemployment assistance, tax cuts, support to cash-strapped state governments, job creation, job training, education, and infrastructure.


Less noticed but just as important is the act's commitment to securing more equitable opportunity for all Americans. In its text and in its implementation, the act holds the potential for a transformative shift toward greater equity in our economy. But fulfilling the potential of this little-noticed mission of equal opportunity will require vigilance, activism, and innovation.

With an African American president, it is tempting to think that racial and ethnic barriers to opportunity are largely a thing of the past. More prominent in progressive circles is the idea that modern racial inequality flows almost entirely from class inequality, and therefore class-based fixes will inevitably advance racial equity. Unfortunately, research and experience prove otherwise. While we've made significant progress in our country when it comes to race relations, racial barriers to opportunity continue to hold back millions of Americans and, in so doing, hurt our economy.

Consider, for example, the exploitative sub-prime lending practices at the heart of today's economic crisis. Federal data show that African Americans and Latinos were more likely to be marketed high-interest, sub-prime loans than were similarly qualified whites, irrespective of their income. Indeed, the racial gap in sub-prime lending was greatest among higher-income borrowers. This problem has both historical and contemporary causes--from redlining and forced segregation in the past, to the paucity of banks in minority communities and discriminatory, predatory lending practices that continue today.

Similarly, research shows that people of color still face subtle but persistent bias in job selection. Resumes with "white sounding" names like Brad and Cindy, studies show, receive more callbacks from employers than do identical resumes with "black sounding" names like Jamal and Lakisha. Whether this discrimination springs from intentional bias or subconscious stereotypes, it's clear that these practices combine with systemic barriers like under-resourced schools, inadequate public transportation, and a dearth of health-care facilities in communities of color to diminish opportunity based on race.

Other systemic factors place particular racial and ethnic groups in a disadvantaged posture that warrants a more particularized approach. Federal mismanagement of American Indian trust funds, for example, has cost the native population billions of dollars. American Indian tribes also hold a sovereign status commensurate with the 50 states under our Constitution but have seen that sovereignty persistently ignored and eroded, with devastating economic consequences. In 2007, American Indians were three times as likely as whites to live in poverty. And unemployment rates on some reservations top 80 percent.


For these and other reasons, even the socioeconomic improvements of the boom years do not reliably translate to more equitable opportunity. According to the Bureau of Labor Statistics, in May 2007, before the current economic downturn, the unemployment rate was 3.9 percent for whites, 5.8 percent for Latinos, and 8.5 percent for African Americans. All three figures roughly doubled over the next two years, but the racial gap remained about the same. The pre-recession economy also included stark racial inequality in wages and assets. In 2007, African Americans earned only 75 cents for every dollar earned by whites, and Latinos earned only 73 cents. Families of color held just 15 cents of "wealth" (assets minus debt) for every dollar held by white families, making it profoundly more difficult for them to survive a downturn without becoming further mired in debt. …

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