by The Editors

The grim indicators of America’s economic distress keep cascading across American society, like a blizzard that silently, inexorably drapes a thick white blanket of snow across the landscape. Except that the ravaging of the American economy, and the pain to businesses, institutions and ordinary citizens this blizzard of bad news is causing cannot be hidden from sight.

Hear the drumbeat of our relentlessly advancing recession in just a few newspaper headlines from one day, November 7: “Bleak Reports Keep Markets in Free Fall;” “Worker Productivity Slowed as Consumer Spending Fell;” and “The Middle Class Helplessly Watches Wealth Evaporate.”

Those headlines helped frame the economy’s alarming descent the day after the federal labor department reported the overall unemployment rate had risen in October from 6.1 to 6.5 percent. That means that, as measured by that rate, there are now 10.1 million Americans out of work.

America has caught a severe economic cold.

That means that Black America is going to catch pneumonia — the Black unemployment rate stands at 11.1 percent — unless Black America rises to the greatest challenge it has faced since the struggles and victories of the Civil Rights Movement 40 years ago.

Amid all the uncertainty roiling the American and global financial markets, amid the precipitous plunges of share prices of this or that company, the evidence for that dire prediction is voluminous. It includes such data as Blacks’ rising unemployment rate, sinking homeownership rate and a minuscule net worth growing ever smaller.

Black American’s overall economic poverty is rooted in the pervasive racism they endured until the late 1960s—and their being shadowed by a considerable bigotry since. But the predicament they now face is also a consequence of America’s last recession, the one that began in March 2001 and was sharply intensified six months later by the terrorist attacks on the World Trade Center and the Pentagon. Of course, the recession affected all Americans. But, while Whites as a group soon recovered their economic footing, Black Americans as a group never did.

There were four reasons why. First, Blacks never recovered the loss of investments they had made in the financial markets during the boom years of the 1990s. Second, the economy’s recovery since 2001 was accomplished essentially without producing a significant increase in new jobs. That meant that Black unemployment consistently hovered at one and a half to twice that of whites all through this period. Third, the stagnating wages that sapped the earning power of American workers in the $25,000 to $75,000 annual income range meant that Blacks had fewer dollars to devote to saving and investing than they had had a decade earlier. And finally, foreclosures that foretold the impending collapse of the sub prime mortgage market—the primary source of the current crisis—had already begun undermining the housing-related investments Blacks had made in the previous five to seven years.

The government bailout of financial giants the Congress cobbled together earlier this fall may well achieve its primary goal of “un-freezing” the credit market for the big financial institutions and companies. But, absent concerted political action, it’s just as likely to do very little for ordinary taxpayers—and especially Blacks, who face great difficulty obtaining credit at less-than-exorbitant rates even in boom periods.

Equally worrisome, the Wall Street rescue tab, whatever its final cost, will also mean that Black Americans will have less money to spend on life’s necessities and to devote to savings and philanthropy; that city and state governments as well as the federal treasury will have fewer funds that could be used for projects to help ameliorate the problems Black communities endure; and that overall private-sector giving to Black organizations and causes could diminish as well.

All this is in addition to the present and future government funds that will have to be spent over the next two decades paying the multi-trillion-dollar costs of the disastrous Iraq invasion and the government’s legitimate efforts to fight global terrorism.

In the past, difficult economic times for America as a whole always meant dire economic times for Black Americans. Now, Black America’s political representatives and civic institutions must rapidly mobilize to break this historic pattern. They must find the opportunity in this crisis to improve Black Americans’ economic position.

For example, they need to support efforts to change the Bush Administration’s wrong-headed tax policies to diminish the financial burden on poor, blue-collar and middle-income wage earners. They should press for increasing unemployment benefits and extending the length of time those who are making good-faith efforts to find work can continue to get benefits. And they must also push governmental policies that stimulate the creation of jobs for ordinary American workers.

These are just a few of the proposals a mobilized Black America must press on the new Obama administration. The demand they must make of it and the Congress is that the principle behind the bailout of Wall Street—that there are some companies “too big to let fail”—must not mean there are some people too unimportant to help save.

Some relevant statistics:

• African American family income declined by $404, or 1 %, between 2000 and 2007. Single, African American male-headed households endured the largest percentage decline – 9.1% – in median family income
• Wage growth for American workers, and particularly African-American workers has stagnated, even as worker productivity has grown. For Black workers aged 25 to 54, their median weekly wage fell by 0.6 % from 2000 to 2007
• Blacks’ unemployment rate increased by 0.7 % from 2000 to 2007, while the Black employment rate fell by 2.4 percent.
• The Black homeownership rate declined to 47.2 % in 2007 from a high of 49.1 % in 2004. Given the continuing foreclosures on Black-owned homes, the rate is certain to continue to decline.
• The Black family poverty rate, which declined by more than 8 percentage points during the economically buoyant 1990s, increased by nearly 3% from 2000 to 2007.

Source:  “Reversal of Fortune: Economic gains of 1990s overturned for African Americans from 2000-07,” Economic Policy Institute, September 18, 2008.