By Chris Fitzsimon
Race and economics and inequality
Two major reports released this week paint a disturbing picture of the economic disparities between African-Americans and whites and highlight the stark contrast in the progress of the two races in the last 40 years.
A study from the Frank Hawkins Kenan Institute for Private Enterprise at UNC finds that African-Americans contribute almost $45 billion to North Carolina’s economy through the purchases they make and the taxes they pay.
That comes to just over $2,200 for every African-American in the state in 2004. And that doesn’t directly take into account the effect of black-owned businesses in North Carolina that employ 85,000 people.
Those were the findings most emphasized in the news coverage of the UNC study and they’re even more remarkable when you consider the report’s data that received far less attention.
A high school diploma is the median education level for blacks and whites, but the white median household income is almost $20,000 higher than that of black households, primarily because blacks are more likely to work in low-paying occupations.
Then there are the disparities that have been reported before, but bear repeating as part of the economic picture of the state. African-Americans make up 59.4 percent of the state’s prison population, close to three times their percentage of the general population.
African-Americans are also far more likely to live in single-parent homes.
Those numbers and other widely reported health and wellness disparities make the $45 billion that African-Americans contribute to the state’s economy a number that represents the vast untapped potential of a fifth of the state’s population.
If African-Americans are contributing $45 billion to the economy despite the disparities in health and economic well-being, imagine the impact on the state if those disparities were reduced, then eliminated.
A report issued the same day as the UNC study by the Pew Charitable Trusts with input from scholars and think tanks on the Left and Right confirms the vast economic chasm between the races, and the growth of the economy in the last 40 years hasn’t changed it much.
The Pew report examined economic mobility: how people are doing in relation to how their parents did. Two out of three American adults have higher incomes than their parents, the rest are not doing as well as the previous generation.
But at every income level, African-Americans are less likely to be doing better than their parents compared to white Americans. The difference is stark for the middle class, with just 31 percent of African-Americans born into middle-class families making more than their parents made.
Sixty-eight percent of white children born to middle-class families are doing better than their parents. The Pew study doesn’t offer explanations for the startling difference, but the report’s authors point to other studies that show lower home ownership rates for black parents and more single-parent families, a factor also noted in the UNC study.
Combined, the reports are a grim reminder of how divided our society remains and how closely the lines of poverty and race are aligned. The UNC study does offer recommendations to policymakers, including more help for black-owned businesses and increased investments in programs to help ex-offenders when they leave the criminal justice system.
The report also calls for improving public education, but there’s much more to do — investing in anti-poverty programs like affordable housing, eliminating the waiting list for a child-care subsidy and, finally, addressing the health care crisis that prevents many families from receiving adequate care.
Dr. Jim Johnson points out that there are more African-American males in prison in North Carolina than in college, many for nonviolent drug offenses. Sensible sentencing policy and increased investments in alternatives to prison make sense. They are less costly to taxpayers and more likely to help nonviolent offenders turn their lives around than prison time.
Addressing the problems raised by the reports is complicated but not impossible. The UNC study shows that it makes economic sense. Disparities cost the economy money. But it’s about more than that. Disparities also affect people’s lives, and far too many in our community continue to struggle.