Declining economic mobility in America has been an issue for so long that the Economist, hardly a commie mouthpiece, worried about the end of meritocracy here back in supposedly booming 2004. The Great Recession and its aftermath have done ever more damage. A Pew study found that while 84 percent of respondents claim higher family incomes than their parents did, Americans born “at the top and bottom of the income ladder are likely to stay there as adults. More than 40 percent of Americans raised in the bottom quintile of the family income ladder remain stuck there as adults, and 70 percent remain below the middle.”
Among the casualties is the black middle class and the ability to ascend into it, which was a significant achievement of the last three decades of the 20th century. The Pew report found that African Americans were most likely to fall out of the middle class across a generation and much more likely to be stuck at the bottom. Black unemployment is also extremely high. And, black families are more likely to lack inter-generational wealth, in part because of the institutionalized racism over much of American history (the notorious Tulsa race riot in 1921 involved a white mob burning down the segregated but self-made and affluent “Negro Wall Street” in the Greenwood district).
Black families were more likely to be steered into subprime mortgages, even if they had credit scores would have allowed them to get standard mortgages. And like Americans of all ethnic backgrounds, they often didn’t understand the loans and/or the loans involved outright fraud.
A Washington Post report says that the damage is likely to last. The collapse of the subprime lending market “not only has wiped out a generation of economic progress but could leave them at a financial disadvantage for decades. At issue are the largely invisible but profoundly influential three-digit credit scores that help determine who can buy a car, finance a college education or own a home.”
I await the comments about how “they had it coming” and emails to claim how you made it up from the bottom with “no help from anyone.” After you get that out of your system, go take a good look at yourself in the mirror. All the “theys” are your fellow citizens and a big part of the human capital future of the country, not to mention a big marker about the fair play and opportunity that should make America exceptional.
And Don’t Miss: Job seekers still face long odds || Economic Policy Institute
Today’s Econ Haiku:
That’s the party line, at least
Guess vanity’s fair