Martin Luther King Jr. gave his life to the struggle for racial equality. The vast racial economic divide remains a fact of American life more than forty years after his assassination.
White 7.5%, Black 15.8%, Latino 11.0%
Ratio to White: Black 2.1 to 1, Latino 1.5 to 1
Median Family Income (2010):
White $70,000, Black $40,000, Latino $40,000
Ratio to White: Black 57¢ per dollar, Latino 57¢ per dollar
Poverty Rates (2010):
White 9.5%, Black 25.7%, Latino 25.4%
Ratio to White: Black 2.7 to 1, Latino 2.7 to1
Education - Adults with College Degrees (Bachelor’s or Higher) (2010):
White 33.2%, Black 20.0%, Latino 13.9%
Ratio to White: Black 60% as likely to have a bachelor’s degree, Latino 42% as likely to have a bachelor’s degree
Incarceration Rates (2009):
White 0.39%, Black 2.39%, Latino 0.97% of the population is in prison
Ratio to White: Black 6.1 times more likely to be in prison, Latino 1.5 times more likely to be in prison.
Average Family Net Wealth (2007) Near the Height of the Housing Bubble:
White $675,000, Black $134,000, Latino $185,000
Ratio to White: Black 20¢ per dollar, Latino 27¢ per dollar
Dr. King described the civil rights victories of the 1960s as having achieved “a degree of decency, not of equality.” Racial economic equality remains a disturbingly elusive and distant dream. In wealth and incarceration, the Black White divide has worsened in the last thirty years. The economic situation for the average Latino family has deteriorated overall relative to Whites since 1980.
Read our 2012 State of the Dream report, The Emerging Majority, for more details on how we got here and where we are headed. In the report, we look thirty years ahead to 2042 when the Census Bureau projects that people of color will become a majority of the population. We examine the trends in racial ineqaulity over the last thirty years, since the election of Ronald Reagain in 1980, and project those trends thirty years forward to 2042.
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The last 30 years of public policy have hindered progress toward Dr. King's dream of racial equality. Thirty years from now, people of color will collectively represent the majority of the U.S. population. If we continue along the same governing path, the racial economic divide will remain in 2042 and, in many regards, will be considerably worse.
The racial economic divide is a national embarrassment. Eliminating it should be a moral imperative, and as the non-White share of the population grows, it will become an increasingly urgent economic necessity.
United for a Fair Economy’s ninth annual Martin Luther King, Jr. Day report, State of the Dream 2012: The Emerging Majority, assesses the state of the racial economic divide since the election of Ronald Reagan in 1980, and uses the trends of the last thirty years to project thirty years forward to 2042.
We find that the past thirty years of public policy has done little to address racial economic disparities. If the current trends continue, the racial economic divide will be immense in 2042 across a wide variety of indicators. Progress toward economic parity between Black and White is slow and inconsistent and, in some cases, inequality is increasing. Latinos who account for most of the growth of the population are, in most cases, experiencing a decrease in economic well being relative to Whites.
If the current trends continue:
Income: Black and Latino median incomes will be 61 cents 45 cents, respectively, for every dollar of median White income in 2042. Blacks will have gained only 4 cents while Latinos will have lost 15 cents of median income relative to Whites from 2010 to 2042.
Poverty: In 2010, poverty rates among Blacks (25.7%) and Latinos (25.4%) were more than two and a half times the White poverty rate. By 2042, the Black and Latino poverty rates will remain 1.9 times and 2.6 times that of the White poverty rate.
Jobs: The current unemployment rates stand at 7.5 percent for Whites, 15.8 percent for Blacks and 11 percent for Latinos. In 2042, Black and Latino unemployment will be 1.8 times and 1.5 times higher than White unemployment, respectively.
Wealth: By 2042, Blacks and Latinos will both have lost ground in average wealth, holding only 19 cents and 25 cents for each dollar of White wealth. The average net worth of Black and Latino families in 2007 was 20 cents and 27 cents, respectively, for every dollar of White net worth.
Higher Education: Black adults were 60 percent as likely to have a college degree as White adults in 2010, while Latino adults were only 42 percent as likely as Whites to have a college degree. By 2042, Black will be 76 percent as likely as Whites to have earned a college degree; Latinos will have become even less likely (37 percent) than Whites to have a college degree.
Incarceration: In 2010, Blacks were a staggering 6.1 times more likely to be incarcerated than Whites. Latinos were 2.5 times more likely than Whites to be incarcerated, and this figure does not include the disproportionately Latino population being held in immigration detention centers. In 2042, Blacks will still be six times and Latinos two times as likely as Whites to be incarcerated.
It does not have to be this way. Public policy does not have to follow the course that it has been on since Reagan. The growing share of the non-White population presents an opportunity for Blacks and Latinos to build political power. In the current era of extraordinary economic inequality, the fate of the vast majority of the White population is more connected with the economic interests of Blacks and Latinos than with the ruling political elite.
Shifting from the dominant conservative public policy direction of the last thirty years that has not addressed racial equality will require a broad coalition dedicated to eliminating the racial economic divide.
We need policy solutions that will significantly reduce the racial divide. Foreclosure relief, federal aid to states and targeted job creation programs are needed to both combat the economic slump and to reduce racial economic disparities. Longer-term strategies including wealth-building programs, increasing taxes on the rich, strengthening safety net programs, ending the war on drugs, and humane immigration reform are needed in order to substantially reduce the racial inequality.
The racial economic divide is the legacy of centuries of White supremacy practiced as national policy. As a nation, we honor Martin Luther King Jr. with a holiday, but we tolerate the perpetuation of racial inequality that he dedicated his life to fighting. If we do not change course, our economy will not be able to bear the swelling numbers of Blacks and Latinos out of work, in poverty and in prison.
Absent a powerful and sustained political movement aligned not just along the lines of race but by economic interests, Whites will still make a disproportionate share of the national income and hold an overwhelming majority of the nation’s wealth and power in 2042.
The 400 wealthiest families in the U.S. aren't just filthy rich, they are downright dirty. Collectively, these households own $1.37 trillion dollars; a number so high that it's nearly impossible to comprehend. Here are 11 shocking things $1.37 trillion can buy that you can't.
In the U.S., accumulating this kind of wealth is the "American Dream." Getting rich is the result of hard work; padding your bank account is applauded and encouraged. But at what cost? Have we created economic policies that cater to the wealthy, in hopes that we will someday be among them?
Perhaps in today's economy, we have allowed the wealthy to get too far ahead financially.
Case in point: today, the wealthiest families in the U.S. are sickeningly, obscenely rich, to the tune of $1.37 trillion dollars. And unlike the rest of us, they don’t have outstanding medical bills or student loans, trouble paying credit card debt, or live paycheck to paycheck.
So how much is $1.37 trillion dollars? To demonstrate just how much money this is, here are 11 things that the richest 400 households in the U.S. can buy with their "hard-earned" cash:
- The richest 400 households can pay off every student loan for every single student in the entire United States. No more paying for an education, so that you can get a good job so that you can... well, pay off your education.
- The richest 400 could pay your rent, and the rent of every single renter in the entire United States for three years.
- The richest 400 could pay the mortgages of every house in the whole country for 14 full months.
- The richest 400 households can buy every single house that was foreclosed on in 2007 and 2008.
- The richest 400 households could pay the annual salaries of 19 million families for one year. So go ahead, take that year-long, family vacation around the world you’ve always dreamed of.
- The richest 400 can pay off all credit card debt for every single person in the entire United States. Imagine that! No more credit card debt looming over your shoulders!
- The richest 400 households can afford to give a $10,000 bonus to every single worker in the entire country. What would a hardworking person like you do with that extra money?
- The richest 400 can afford to buy a new car for every family in the United States. Meanwhile, many of us must ignore the flashing check engine light.
- The richest 400 can pay for 3 ½ years worth of gas for every driver in the country.
- The richest 400 households can afford to triple the number of teachers in the United States, then give every single one a $30,000 raise. Teachers are being laid off everywhere, their salaries are being cut, and they are suffering. Teacher-to-student ratios in schools are abysmal. But what can we do about it when so much wealth is in the pockets of so few families?
- The richest 400 families alone could replace 70% of all money lost in the Great Recession, for everyone! How much money did you, your parents, or grandparents lose in the Great Recession of 2008? 30%, 50% of your portfolio? Not only do the rich still have enough money to fund their wildest dreams, but they can also fund your retirements.
As you can see, the wealthiest families in the U.S. are doing just fine. And with this money has come a great deal of political influence, often in the form of tax breaks and tax loopholes. Their influence on policy has made it easy for the rich to stay rich [and get richer].
And until this winner-take-all economy changes, it will remain nearly impossible for us regular folks to get ahead, no matter how hard we work.
This 2008 report examines the racial bias of the subprime mortgage lending crisis, and the devastating wealth loss to people of color that has resulted.Read more
Voting Blue, Staying in the Red explores the impact of the new Democratically controlled Congress.Read more
Stalling the Dream looks at the role of the racial wealth divide in decreasing resilience during moments of crisis.Read more
Disowned in the Ownership Society looks at the disparate views of what an ownership society looks like.Read more
Enduring Disparities looks at the economic outcomes that continue to maintain the racial wealth gap.Read more