Category: Economics

By Maura Mulholland

With the rapid increase in rental rates and housing prices, recent years have seen a drastic decrease in home ownership rates among younger generations. Millennials have already experienced the trials of the housing market, and with the new trend of inflation, it seems that Gen Z will have an even tougher time owning their own home. The lack of affordable housing is especially pronounced for young members of the Black community. African Americans trail thirty points behind the white community when it comes to rates of home ownership, with only forty-two percent of black families owning their own home. 

Even in eras where white ownership rates were high, African Americans still struggled to purchase and keep their own homes. After World War II, returning white soldiers moved their families from rented places in the cities to the new, expanding suburbs surrounding urban centers. While whites were able to acquire single-family homes with ease, Black families did not have these same opportunities. New suburban developments were often segregated, and white homeowners’ associations reacted violently to Black families moving into their neighborhoods. Racism also prevented many families from getting the loans they would have needed to afford a real-estate purchase. 

Black families have also been discriminated against in terms of the values of their homes. Banks and other financial institutions are infamous for appraising Black homes at a lower value than the same type of property, were it owned by a white family. The devaluation of Black homes only reinforces the racist myth that home values sink when Black people start moving into a neighborhood. The houses remain the same, but the value that the real-estate market places on the people who live in them decreases because of the color of their skin. 

One of the most recent barriers to Black homeownership is student loan debt. Forty-two percent of Black households have student loan debt, almost twice the amount of either Asian or white households. This financial obligation is compounded by the fact that half of Black renters are burdened by the cost of rent, spending thirty percent or more of their monthly income on housing alone. Thus, a system of institutional racism has emerged in which Black families are barred from owning real property, but find themselves paying exorbitant amounts in rent every month to white landlords who perpetuate the disparity in ownership rates. 

By Maura Mulholland

Most of the country has been dealing with high inflation rates in recent weeks, tearing through cost of living raises from last year and halting hiring opportunities for many companies. Economists continue to speculate that the United States is poised on the edge of another recession, and these fears have been reflected internationally as the euro and other foreign currencies have lost value as well. If another recession is inevitable, it will only emphasize existing patterns in income inequality, which pays the work of white men higher than the rest of the American workforce.  

According to the Pew Research Center, the two ethnic and gender groups which make the least amount of money on average are Black and Hispanic women, at thirteen and twelve dollars an hour respectively. Black men also average the lowest hourly wage of males, at around fourteen dollars an hour. All groups of women have narrowed the wage gap between themselves and white men since 1980, albeit by marginal amounts. Black women narrowed the gap by nine cents, while Hispanic women were only able to earn another nickel. Black and Hispanic men, however, have been unable to lose the racial wage gap. 

Part of this discrepancy is due to education level, but even in a group of men who all hold Bachelor’s degrees, Black men continue to earn only eighty percent of a white man’s wages. Black and Hispanic women fare poorly in these calculations as well, earning only seventy percent of the wages that white men earn. These additional gaps are often attributed to differences in industry and occupation, but some “non-concrete” figures, such as innate prejudices, also play a role. For example, racist attitudes held by a schoolteacher may have discouraged a Black student from STEM, while her white classmate was urged to enter that field. The siphoning away of African Americans from high-paying fields continues to be endemic in the United States. 

Income inequality has historically created deep stratification between racial and gender groups that only increase with generations. While education and shifts in social mindsets have helped to lessen the gap, a significant amount of progress still stands to be made. To truly eliminate the status gap in American society, we as a country must ensure that every citizen can earn a living wage, and that that those earnings are not compromised someone’s race.