In the classic American story, opportunity is always in front of you. You finish school, find a job, buy a home and start a family; it’s a rosy dreamscape.
But that world is one-dimensional. Income inequality is just about as American as baseball and apple pie. And though the economy has improved in the past few years, the unemployment rate for black Americans, now 13.2 percent, is about double that for white Americans.
Persistent unemployment and difficulty getting a job cumulatively impact the so-called wealth gap. Wealth or net worth is defined as a person’s total assets — such as bank and retirement accounts, stocks and home value — minus debt. It’s what families lean on in a downturn.
In 1984, the wealth gap between blacks and whites was less than $100,000, according to a study out of Brandeis University. That number has since tripled.
“The wealth gap is really where history shows up in your wallet,” says Heather McGhee, vice president of policy and outreach at the public policy group Demos. McGhee has spent a lot of time looking at these numbers and what it means for families.
While student loan debt is at record numbers across the board, McGhee says, black college graduates are twice as likely to have student loan debt as their white counterparts, who often use their statistically higher wealth to pay for college and take on less debt.
“It means a difference between the African-American graduate coming out, graduating into a recession … [and] having to start paying down her student loans,” McGhee tells NPR’s Jacki Lyden. “Whereas her white classmate actually doesn’t and is able to get a job faster.”
While it is hard for anyone to educate or work their way into the middle class these days, McGhee says, it is twice as hard for blacks.
She says an uptick in GDP growth doesn’t mean that working- and middle-class families are struggling to get by any less. She advocates for something more substantial, like going back to a debt-free college system.
“We created the greatest middle class the world has ever seen … but by saying, ‘We as a country are investing in you,’ ” she says. “That’s what we have to do for today’s young generation that is more diverse and is less likely to come from inherited wealth.”
Tough Times In Great Lakes State
Michigan has the highest rate of unemployment among black Americans in the country. Nearly 1 in 5 blacks there — 18.7 percent — is out of work.
That’s about more than twice the rate for whites in the state, according to the Economic Policy Institute.
On a recent day, 58-year-old Joan Knox was at the Urban League of Detroit, taking part in the group’s Mature Worker Program. There she gets computer training while earning a small wage.
Even that small wage has been a godsend for Knox, who has been out of full-time work for more than a decade. At one time she ran her own small business, providing housekeeping and catering services. Then the auto industry collapsed and factories started laying off workers and closing.
“I lost a lot of my clients — the majority — so there went my business because they couldn’t afford me,” Knox says.
Since then, Knox has subsisted on some small jobs here and there, mostly part-time work. Even when she landed a job at one of the local stadiums, she says, she never got more than 20 hours a week.
“It was quite frustrating,” she says.
Knox says she gained a lot of weight and her hair started falling out because she was worried she was “going to be on the streets or knocking on the doors of the shelters.”
The mature worker program ends soon, and Knox, who lives with her sister, still desperately needs a job. She’d like to be an executive assistant so she can apply her skills.
“I’m great at multitasking [and] I’m great at making people feel good about themselves,” she says. “You know I’ve gone through it. I didn’t know I had it in me, so now I’m finding it’s something I can market.”
Knox has been trying to spread the word to make that happen. Even if she’s just chatting with people on a bus, she lets them know she’s looking for a job, what she can do and gives them her contact information in the hope she’ll hear from them.
“Each time a door gets closed or the phone never rings or you never get a response back to an email, it’s quite frustrating,” she says. “And emotionally, it does sort of tear you down and keep you down a bit.”
Out Of The Network
Even a hustle like Joan Knox’s may not be enough to make up the enduring unemployment gap for black Americans.
“Whites disproportionally hold the best jobs, the jobs with the highest incomes, and we still live in a quite segregated society,” says Rutgers Business School professor Nancy DiTomaso. She says deep-seated and unconscious favoritism plays a strong role.
In research for her book The American Non-Dilemma: Racial Inequality Without Racism, DiTomaso began by interviewing several hundred white people from across the country about their job histories.
She found that about 70 percent of the jobs they had held over their lives were obtained thanks to some kind of inside edge or outside help, like a friend tipping them off to an open position or putting in a good word for them.
“It raises questions about people who may not be part of those kinds of networks,” DiTomaso tells Lyden. “So when there are opportunities to pass along they are passed along primarily to whites.”
DiTomaso says that one of the consequences of people finding a job this way is that they do not think of themselves as participating or contributing to the reproduction of racial inequality. Many of those whom she interviewed, despite receiving significant help in their careers, felt they’d gotten where they were from hard work alone.
“It does seem that there is a public policy issue to be addressed when people are passing along jobs that really don’t belong to them,” she says.
The Economic Policy Institute finds that the black unemployment rate in every state is projected to remain higher than the overall rate at least through the end of the year.