The protests in the US reignite the historic debate regarding race and economic inequality.
The mass protests that have gripped the U.S. and the world in the wake of George Floyd’s death at the hands of Minneapolis police officer Derek Chauvin were initially spurred by an urge to protest racism and police brutality. Yet as the smoke begins to clear, there is already a renewed debate around the issues of race and economic inequality and just where African Americans find themselves on the economic ladder in America.
Last week, Donald Trump touted his record on economic issues affecting black communities in a tweet, saying he had done “more” for them “than any president since Abraham Lincoln,” citing a scheme to foster investment in low-income neighbourhoods, the passage of criminal justice reform, and low unemployment, poverty, and crime on his watch.
Yet many view the past 10 years of U.S. economic history, which includes the recovery from the Great Recession and the longest single expansion of the U.S. economy on record and pre-pandemic highs for the stock market as missed opportunities in reducing inequality along race lines.
African-Americans are still disproportionately found in low-skilled, low-wage positions, under-represented in business and equity ownership, and unable to share in many of the gains happening elsewhere in the U.S. economy. Underpinning this disparity, according to many, is the lack of access to quality healthcare, housing, and education.
In 2018, the median household income for a black family in the U.S. was $41,361, having grown by just 3.4% over the previous decade, compared with a median income of $70,642 for non-Hispanic white families, which had risen 8.8% since the 2008 financial crisis, according to the U.S. Census Bureau.
More starkly, according to a report published in February by the Brookings Institution, the net worth of a typical black family in 2016 was $17,150, while the equivalent figure for a white family was no fewer than 10 times greater at $171,000. The authors of the report concluded that American society “does not afford equality of opportunity to all its citizens.”
These conditions may well be dramatically exacerbated by the coronavirus pandemic with many low-skilled workers laid off and small businesses shuttered. Meanwhile, many of those who have managed to retain their jobs find themselves in frontline positions that expose them to health risks.
One big question in terms of economic support for black neighborhoods amid the current economic slump is whether Congress and the White House will be able to agree on a new slate of aid for American households, in addition to that already sent, which amounted to $1,200 per individual earning less than $75,000 per year.
There is also a fierce debate about the fate of federal unemployment benefits. Democrats want to expend a benefits program worth $600 per week introduced as part of a $2.2 trillion pandemic stimulus package, which are set to end in July. Yet Republicans and the White House are resisting them.
Specifically on the issue of race, some lawmakers, activists, and economists have been pushing for slavery reparation payments to black households, as well as so-called baby bonds, which would be savings instruments afforded to every child, and wage guarantee schemes that would help workers have some economic stability.
Issues such as racial equity, the racial dynamics of unemployment, and occupational segregation were largely missing during the recovery from the last economic crisis, post-2008. Given current events, expect them to be at the forefront of this one.