Over the past several decades, African Americans have been able to make leaps and bounds economically.
With more opportunities for education and better career choices, Black adults have been able to earn a decent wage. Despite the advancements made, Black communities continue to be kept at bay financially. Representing just a small percentage of the population, Black people continue to face financial adversities born from years of segregation and racism. Now, the rising cost of living coupled with slow financial gains are keeping Black communities locked into a cycle of being overcharged and overpaying for commodities.
Money and wealth have always been used as tools to create an economic system of division. Financially, Black communities continue to lag behind other demographics and are purposely kept from the American dream. Race is another divisor that puts African Americans at a disadvantage. Used as a weapon, race has been used as an unfair marker of worth. Through decades of unlawful practices, Blacks often pay more and experience unstable economic conditions resulting in higher costs of living.
In 2019, a study released by the Joint Economic Committee details the median household income for Black families was just $17,000 while for white families it was $171,000. Despite earning less, Blacks pay a higher cost for housing, healthcare and other life necessities. Despite being kept at a disadvantage, Black communities are beginning to rewrite the narrative.
“I don’t accept that we are behind the curve, in the traditional sense — where all of the data that comprise the curve has equal weight. By analyzing the current and historic social, political and economic situation of the Black community, one will quickly see that our communities have never had equal opportunities,” says Brittany Harvey, licensed financial advisor and social worker.
Purchasing a home is seen as the pinnacle of the American Dream. Often shut out of that dream, Black families are less likely to own their home. In Detroit, though a predominantly Black city, whites still have an advantage. Before the infamous housing market crash of 2008, Black home ownership was on the rise in the city. In 2007, 75 percent of Detroit’s mortgages, homes and loans were given to Black buyers. As recently as 2017, Black families in Detroit are now receiving just 48 percent of home loans.
Home value amounts are also vastly different for Black homeowners. While Black family homes are appraised at thousands of dollars less than for whites, property taxes are seemingly higher in Black communities. A 2020 study by the University of California Berkeley analyzed 118 million homes across the country and showed Black homeowners are paying 10 to 13 percent higher property taxes. Black home shoppers are also met with inflated home purchase prices, making acquiring a home that much more difficult.
“Economic inequality is a pervasive issue in the United States as a whole. I made the decision to become a licensed financial advisor because I plan to help as many people in our community as I can, in our efforts to maximize household income, accumulate generational wealth and preserve earnings through financial literacy and intentional planning,” says Harvey.
Economic advances typically come hand in hand with higher education. While high school and college graduation rates have risen for Black students over the years, they continue to be disproportionate in comparison to white students. The cost of higher education is what keeps most students from acquiring a higher degree. Scholarships, loans and other financial means keep Black students from being financially equipped to pursue higher education.
“Capitalism itself has many vagaries; it is still very new in the grand scheme of things. Black communities have managed to do extraordinarily well without having equal access to money or opportunities,” says Harvey.
The life expectancy for Blacks is three to five years less than that of a white person. If health equals wealth, Black communities are taking a hit. With rising health issues for Black individuals like hypertension, stroke, heart attack and diabetes, the cost of health insurance is also rising. Though offered medical insurance through employers, some African Americans are still without health and life insurance. Before the introduction of the Affordable Care Act during the Obama Administration, one in five Blacks were uninsured, largely thanks to the high costs of individual and family plans. However, there are plans that can help turn the tables on high costs.
“An indexed universal life insurance policy is the top-tier retirement and investing plan, however not a lot of people in our community are taking advantage of its benefits simply because they are not aware of its lasting creation of generational wealth and financial security,” says Harvey.
As the country has made some progress in leveling the playing field for African Americans, there still exists a wage gap that is widening with each economic turn. As whites can ride with the ebbs and flows of the changing financial tides, some African Americans households find it difficult to keep up. For some, Black communities were always behind as there was never an equal starting place.
“We should remind ourselves, when these metrics are presented to us, that we are only 156 years from legal slavery in a land where the ancestors of our current competitors on said curves, started 529 years ago,” says Harvey.