Economic Development

How “Great Recession” wiped out half of Black America’s wealth

Sure things are tough. And the sad reality is they’re going to get a lot tougher. Particularly if you happen to be a Black person living in America. The thing about economic numbers is they lag years behind the actual reality. So while many of you have been suffering for the past several years, i.e. lost your home, car repo’d, laid off from your job and basically tumbled out of the middle class, the economic data has not been available to validate your dilemma.

That just ended thanks to a new study by researchers at Cornell University and Rice University titled, “Emerging Forms of Racial Inequality in Homeownership Exit, 1968–2009”.  Interestingly these researchers go back four decades, and  show that the. And it has accelerated during the Great Recession years, particularly among people who purchased their home in the 1990’s or later.

“The 1968 passage of the Fair Housing Act outlawed housing market discrimination based on race,” said Gregory Sharp, a postdoctoral fellow in Rice’s Department of Sociology and the study’s lead author. “African-American homeowners who purchased their homes in the late 1960s or 1970s were no more or less likely to become renters than were white owners. However, emerging racial disparities over the next three decades resulted in black owners who bought their homes in the 2000s being 50 percent more likely to lose their homeowner status than similar white owners.” 

The term “Great Recession” applies to both the U.S. recession – officially lasting from December 2007 to June 2009 – and the ensuing global recession in 2009. The economic slump began when the U.S. housing market went from boom to bust and large amounts of mortgage-backed securities and derivatives lost significant value. During the 19 months trillions of dollars of wealth were erased, more than half of adults lost a job or saw a cut in pay or hours, and tens of thousands lost their homes. 

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Michael Bailey

Michael Bailey is the Chief Curator of Information at The MinorityEye a nationally recognized news blog that focuses on news, events and issues relevant minority communities. He is also an Integrated Marketing Communication Specialist at TME Media Group. His firm provides consulting and training services to non-traditional entrepreneurs as well as corporate, state and local agencies on how to develop integrated marketing strategies that connect with minority consumers.

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