Like other black teachers working in a rigid caste system that treated one group differently from another, she taught in an old building with old desks and hand-me-down books when she could get them, some without covers and with pages torn out, for a fraction of the pay her white counterparts were getting. In the early ’40s in Georgia, white teachers made an average salary of $960 per year; black teachers made an average of $460. In Mississippi, white teachers made $712 annually, while black teachers were paid less than a third of that—$226 per year, hardly more than field hands.
There came a time when, after the twin pressures of the Great Migration from the rural South to northern cities and the civil rights movement of the 1960s, blacks were able to enter jobs, schools, and neighborhoods previously denied them and began the slow crawl toward closing the gap. By the turn of the twenty-first century, it had narrowed significantly—although white Americans still had a median net worth ten times that of black Americans. Then came the Great Recession, which wiped out the precarious gains that had been made and hurled African Americans back to the lowest point since economists began measuring the wealth gap three decades earlier.
In 1984, THE PEW RESEARCH CENTER released the first of what would become its seminal wealth-gap studies, measuring the economic wherewithal of Americans by race, with a ratio that set forth the difference in median wealth, that is, net assets—bank accounts, retirement funds, stocks, bonds, and equity in real estate, business, and vehicles—owned by a household minus debts. That year, white wealth was twelve times that of black wealth—a median of $76,951 for white households and $6,679 for black households (in 2009 dollars). For the next decade, the gap stalled at ten to one, with each group rising or falling along parallel tracks. In 1995, with more African Americans finally in a position to benefit from the overall prosperity in the job and stock markets of the mid-’90s, the gap closed to seven to one: $68,520 in net assets for whites and $9,885 for blacks.
But the Great Recession has left blacks in a worse-off position than whites by virtually every measure. The numbers are startling. Based on the latest Pew study, released in 2011, median white wealth is now close to 20 times that of black households, the highest since the survey began. If a roof collapses, a car breaks down, a scholarship falls through, a job is lost, a child gets sick, property taxes go up, the basement floods, a breadwinner falls ill, or any combination thereof, white households can draw on $92,000 to get them through it, while black families must figure out how to weather life’s storms on $4,900.
One out of every four black households has no assets other than a car, compared with one out of 17 white households. African Americans’ cars were of lesser value ($3,000) than those of whites ($5,960), Hispanics ($3,765), or Asians ($6,683).
The gap widened because of the double losses that disproportionately hit African Americans. First, there was the collapse of the housing market with the resulting loss of equity, if not the properties themselves. African Americans were targets for some of the worst subprime loans, even when they qualified for regular mortgages. Black borrowers with high credit scores were three times more likely to receive high-interest loans than similarly rated white borrowers. In Detroit, more than a third of black homeowners lost a home to foreclosure. As more distressed properties work their way through the system, one out of four black homeowners is expected to have lost a home by the time the current cycle concludes.
Second, African Americans had higher unemployment rates (now at 13.6 percent versus 8.3 percent overall, and 7.4 percent among whites), which forced those who had little to begin with to draw down on already limited resources. Blacks had been running in place just to stay where they were when the economic crisis knocked them further back than they had been 30 years before, evidence of how fragile those gains had been. The group that could afford to lose the least lost the most.
In a cruel twist, African Americans, with little experience or exposure to the stock market historically, were also hit especially hard in the Wall Street collapse.
Isabel Wilkerson, a Pulitzer Prize winner, is the author of The Warmth of Other Suns: The Epic Story of America’s Great Migration. This article appeared in the March 1, 2012 issue.