Shattered dreams in black America

The American economy has gone through what has been called the Great Recession. But the crisis in Black communities across the U.S. constitutes an outright depression--spurring desperate conditions that have gone largely unreported because of the racist indifference of the government and mass media. Unemployment has reached catastrophic levels in Black communities. The numbers are staggering. Official African American unemployment was 15.6 percent in November 2009, compared to an overall national rate 10 percent--and those statistics leave out workers who have been forced into part-time jobs because they couldn't find full-time work, or who have been pushed out of the workforce altogether. For young African Americans, male and female, aged 16 to 29, joblessness is as high as 30 percent, according to the Washington Post. According to one report, between 2006 and 2009, more than 6 percent of Black men have lost their jobs--in real numbers, that adds up to the disappearance of more than 489,000 jobs.

Unemployment among Black women aged 20 and older has risen by more than 4 percentage points since the beginning of the recession, bringing their total unemployment rate up to more than 11 percent--which 75 percent higher than for white women in the same age range.The overview of unemployment doesn't begin to convey the extent of the jobs crisis in Black America. Officially, the nation's highest unemployment rate is in Detroit, which is 83 percent Black--joblessness is a staggering 28 percent. Unemployment on the mostly Black South and West Sides of Chicago comes in second at 22 percent. The top 10 areas in the country where unemployment is concentrated include Black neighborhoods in Toledo, Ohio; Atlanta; and St. Louis. But a study conducted by the University of Wisconsin-Milwaukee shows that the jobs desert for African Americans is more severe than the official figures show. The study found Black male unemployment for men aged 16 to 64 to be unprecedented and overwhelming. Buffalo had the highest percentage of Black men either unemployed or permanently out of the labor force at 52 percent. That was followed by Milwaukee at 47 percent and Chicago at 43 percent. Among 35 major metropolitan areas, African Americans had the "lowest" unemployment in Washington, D.C. at 27 percent. In most of those 35 cities, Black unemployment hovered somewhere between 30 and 35 percent. The problem is not just an issue of not having a job. The loss of jobs in Black communities is exacerbating social disparities that have historically caused a lesser quality of life for African Americans. For example, the rapid loss of jobs means that greater numbers of African Americans are losing their health care, which will only worsen disparities around health care between Blacks and whites that already exist. In 2007, when Black unemployment was approximately 10 percent, 20 percent of Blacks were without heath insurance. With Black unemployment growing steadily today, the numbers of the Black uninsured are sure to rise, too.

Unemployment also impacts rising levels of poverty in Black communities. A recent report found that 90 percent of Black children are part of families that will use food stamps by the time they are 20 years old. All told, 40 percent of Black children live in poverty, according the government's official statistics. According to the census, a full quarter of African Americans were living in poverty in 2007--two years before the unemployment crisis in Black America. Rising unemployment is also exacerbating the foreclosure crisis in Black neighborhoods across the country. In two neighborhoods alone, there were 725 foreclosures in a nine-month period. The Woodstock Institute has found that for every one home foreclosure on a given block. the value of the remaining homes decrease by 1 percent. Thus, the heavy concentration of home foreclosures in African American neighborhoods is rapidly destroying the value and worth of the remaining homes in the neighborhood. According to the Center for Responsible Lending, 53 percent of African Americans who bought homes in 2006 have already lost or will lose their homes to foreclosure in the next few years, compared to 22 percent of white borrowers facing foreclosure. The rate in Black and Latino communities is running at an astonishing rate. In Chicago, foreclosures increased by 18 percent in 2009, including 8,000 homes lost by Latinos and another 10,000 homes lost by African Americans. According to the Center for Responsible Lending, between 2009 and 2012, 1.3 million Latinos and 1.1 million African Americans are expected to lose their homes.

The nonprofit Woodstock Institute attributes the disproportionate number of lost homes in Black and Latino communities to their overrepresentation among those who were steered towards sub-prime loans during the 2000s. Studies have shown that African Americans, despite being qualified for convention loans, were often steered toward sub-prime loans, with their hidden fees and ballooning interest rates. For years, African Americans in urban areas were cut off from private mortgage funds. But legal changes in the 1970s in lending rules and deregulation in the 1980s and 1990s led to a sharp increase of credit in African American communities. African American communities were more susceptible to predatory lending because of the dearth of banks in Black communities and the generally lower credit scores among African Americans. According to the Chicago Reporter, when calculated on a 100-point scale, the average credit score for African Americans is about half of the average for whites. Generally, low credit scores were the pretext for both steering Blacks toward sub-prime mortgages during the housing boom--and now, the renewed exclusion of African Americans from credit sources.

According to one report, in 2008, 48 percent of African American applications to purchase or refinance a home were rejected. In Dallas, more than 60 percent of Blacks' loan applications for home refinancing were rejected. Still, the focus on low credit scores as the reason for African Americans being offered predatory mortgages or now being rejected outright has become a way of denying that racism underlies the foreclosure and credit crisis in Black communities. A lot of the evidence leads to a different conclusion. For example, a 2005 study found that 70 percent of African Americans with incomes between $92,000 and $152,000 who bought homes were given sub-prime loans, versus 16 percent of whites in the same income range. Moreover, the NAACP claims in a lawsuit against lender Countrywide Financial (now owned by JPMorgan Chase) that even when Blacks and whites were both offered sub-prime loans, African Americans were charged on average 30 percent more for the same services. But even when it was the case that Blacks had lower credit scores and therefore didn't qualify for prime credit based on "legitimate" criteria, can this process by considered free of racism? Who and what determines what constitutes "good credit" anyway? What are the factors involved? According to the JPMorgan Chase response to the lawsuit against them for discrimination, a good credit score is based on multiple factors like credit history, debt, work history, assets, and previous or current property ownership, among others. How could it be claimed that such criteria aren't shaped by racism? In reality, "good" or "bad" credit are socially created products, born of the entanglement of race, place, the real estate industry and American housing policy.