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Economic Disparities for Minorities Sharpen in Recession

New America Media, News Report, Cristina Fernandez-Pereda Posted: Sep 25, 2009

Editors Note: Minority communities have felt the economic pain of the recession more keenly than others. Whether its unemployment or home ownership, minority groups are hurting on all counts. Any recovery needs to focus not just on job creation but on institutional changes to right imbalances that preceded the recession said experts at a congressional hearing this week.

Minorities are taking the hardest hit of the economic downturn. Policy advocates from different minority organizations participated Wednesday in a Congressional hearing and a teleconference to share the impact of the recession on different communities.

If we look at changes in unemployment rates by demographics, weve seen that they grow faster among minorities, said Christian Weller, senior fellow at the Center for American Progess (CAP). Its a faster decline from lower levels of income, so minorities now have less of a security blanket to fall onto.

Policy experts showcased the impact of job loss among minorities, where unemployment is growing at a much faster pace than the rest of the population. For example, while unemployment rates average 9 percent nationally, they have risen to 15.1 percent for African-American adults. But its Asian Americans who have experienced the biggest impact, with unemployment more than doubling since the first quarter of 2007. In the case of Latinos, almost one of every three young adults (aged 16 to 29) does not have a job right now.

Its a whole generation that we are losing here, said Eric Rodriguez, vice president of the office of research, advocacy, and legislation at the National Council of La Raza.

According to experts at the congressional hearing and those who participated in a conference call organized by the Center for American Progess, minorities are being hit harder by the recession because they do not have the safety net that other groups have as a result of better jobs, higher rates of home ownership, and higher enrollment in social security and retirement plans. Speakers called on Congress to ensure the stimulus money reaches all groups and takes into account factors that have made minorities more vulnerable to the recession.

Cy Richardson, vice president of housing and community development for the National Urban League, stated that the effort must not just be about reviving the job market: If job creation continuously focuses on whites, those who need them most will be left out.

CAPs Weller added, Job growth is not enough because the unemployment rate was already high to start with.

Experts emphasized that governmental mistakes cant be fixed just with money. The solution will come from targeting where stimulus money is being spent and where current problems are.

Minorities are tax-payers too, and they are helping rebuild America with their own bare hands, Rodriguez said. We need to look for direct investment and employment opportunities. Recovery programs need to work for all or it wont have any effects on the economy.

Weller underscored the need to ensure equality when creating new jobs. He criticized the circumstances that leave many minority workers without a means of transportation to get to their job. In other cases, the job itself is problematic. For example, Rodriguez said, many Hispanics work in hazardous construction jobs.

Speakers stressed that solutions must focus on changing the circumstances that preceded the recession. The fact that only 46 percent of African Americans and 40 percent of Hispanics, compared to 56 percent of whites, invest in retirement plans shows experts that there needs to be an education component to help minorities save and become less vulnerable to instability.

New policies should focus on wealth building through financial education, making it easier to save money, Weller said. Researchers have found that lack of information and understanding of the credit market rules also puts minorities at a higher risk.

In the wake of foreclosures, Asian Americans have had the sharpest decline in home ownership among minorities, with a 1.24 percent drop in 2008. For us, its a signal that something is systematically preventing our community from recovery and leaving us out of state funding, said Romana Lee Akiyama, deputy director at the National Coalition for Asian Pacific American Community Development.

African-American home ownership has dropped 0.88 percent, while for Latinos the drop has been 0.8 percent. Home ownership is now below 50 percent for these two groups, compared to 75 percent for white Americans (which is itself the lowest it has been since 2002).

Experts concluded that stimulus money should not focus on existing infrastructures that were already leaving minorities behind. Instead, they said, the focus should be on underrepresented communities in the system as well as job and training opportunities for those most affected by the recession.

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