Women of Color Slammed By Economic Crisis -- We Must Strengthen Basic Safety Nets
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Sandra Hines, a middle-aged black woman, lost her home to foreclosure, forcing her family to move into a rental home. A short time later, that house was also foreclosed, and Hines and her family became one more statistic in the predatory lending schemes that have targeted women of color. The sad truth is that Hines’ story, reported in the Applied Research Center’s 2009 Report, “Race and Recession,” is not unlike those told by many other families of color who have faced foreclosure and displacement during the recent economic crisis -- and lost most, if not all, of their assets in the process.
Their stories -- and what they mean -- should be on the minds of members of Congress as they debate legislation to create jobs and fashion other policies to address our economic problems. We must make sure that all recovery efforts move us to an economy that addresses our nation’s long-standing imbalances and disparities.
Since 1979, the median annual income of the bottom third of families decreased 29 percent while the top third experienced a 7 percent increase. The racial wealth gap has also widened in the last few years: for every dollar of wealth held by the typical white family in 2007, the black family had one dime, down from 12 cents just three years earlier. According to the Consumer Federation of America, women-headed households have about one-half the income and less than one-third the wealth of other American households.
This growing divide has been accompanied by the unraveling of our safety nets -- and the economic downturn has only made the disparities more apparent.
The poor and vulnerable have felt the greatest impact of our Great Recession. To reverse these trends, we must rebuild our economy from the bottom up by strengthening basic safety nets.
For true economic security, people need more than jobs and savings: they need unemployment insurance, paid sick leave, affordable quality child care, tax reform, and greater investments in health and education.
They also need the ability to build wealth -- and any economic recovery efforts must include targeted programs and policies to close the wealth and income gaps faced by people of color, particularly women.
Women of color need good jobs -- jobs that pay a living wage and offer comprehensive benefit packages -- to build assets and greater economic security for their families.
Assets provide long-term stability, ease economic mobility and provide a cushion in case of job loss or an unexpected health crisis. Boosting savings can have a positive ripple effect by fostering greater economic opportunity through enhanced investment which, in turn, leads to gains in real wages and economic growth.
But only 51 percent of non-white or Hispanic Americans compared to 76 percent of white non-Hispanic Americans are homeowners. Women are particularly vulnerable to the rising costs and the decreasing availability of decent, affordable housing. Nationally, female-headed, one-adult households make up 33 percent of the households eligible for housing assistance. Women are 32 percent more likely than men to receive sub‑prime mortgages and black and Latina women borrowers are the most likely to receive sub‑prime loans at every income level.
Repairing our safety nets is not simply an act of goodwill -- it is good business.
According to economist Mark Zandi, every dollar spent on extending unemployment insurance benefits produces $1.63 in economic activity, and every dollar spent on temporarily increasing food stamp benefits produces $1.73 in economic activity.
The Center for Budget and Policy Priorities, in fact, asserts that such direct funding to individuals represents some of the most effective job-creation and job-protection measures available. The $4.5 million increase in food stamp benefits in the stimulus package resulted in a total of about $8 billion in economic stimulus and kept more than one million people out of poverty. Women are especially dependent on these measures because they are 35 percent more likely to be poor than men.