According to findings from the Center for Responsible Lending’s newest report, The State of Lending in America and Its Impact on U.S. Households (State of Lending), the typical household has just $100 left each month after paying for basic expenses and debt payments. After controlling for inflation, the typical household had less annual income at the end of 2010 than it did at the beginning of the decade.. Moreover, as worker productivity increased, the workplace has seldom rewarded them with higher pay.
Even in households with two wage-earners, the amount of disposable or discretionary income after paying monthly expenses was less in 2010 than it was in 2000. The combined effect of stagnant wages along with unemployment and under-employment is forcing families to curb spending and use any available assets to keep pace financially. Families with no savings or assets incurred new debt.
“The recession and slow recovery have led to declining net worth for the average U.S. household and a disproportionate decline for African-American and Hispanic households,” states the report.
In communities of color, income declines are higher in part because of declines in over-representation in two types of employment that historically provided stable and secure jobs: manufacturing and construction. These two industries suffered job losses of 10 and 20 percent, respectively. African Americans who formerly worked manufacturing and construction jobs lost more than twice the number of jobs between 2007 and 2011 than they previously gained in the pre-recession decade.
These losses in income also caused losses of wealth that are even more severe. In fact, the decline in wealth from 2005-2009 between communities of color and white households is the largest documented wealth gaps since the Census Bureau began publishing wealth estimates in 1984. The net worth for African Americans dropped 53 percent and among Latino families, 66 percent. By comparison, white household wealth declined only 16 percent in the same years.
Read the rest here: The Louisiana Weekly
Sign up for Our Newsletter
Get updates about the policies and topics that matter the most to you. Progressive news directly to your email.