“What the hell do you have to lose?” Donald Trump the presidential candidate famously asked that question to Black voters while appealing for the support of African Americans almost two years ago to the day. The seemingly never-ending stream of negative answers ever since has been playing themselves out in the most perilous of ways.
The latest response to that fateful question has materialized itself as an impending recession, fears of which were, of course, being downplayed by the president, who many people blame for a looming economic crisis. As a result, a clearer picture was emerging of which groups would be most affected by the first recession in a decade. And by “groups,” I mean Black people.
The fact of the matter was that the effects of the Great Recession that began in late 2007 have never dissipated fully, or at all. And that was especially true for Black people, who have disproportionately fallen short when it comes to homeownership, credit, employment and earning wages overall, among other key economic indicators. The collision of those factors in 2019 means that Black folks should rightfully brace the hardest for another recession, which, economists say, is a matter of when, not whether, it will happen.
In essence, all one has to do is take a look at the not-so-distant history in order to determine what’s on the economic horizon for Black folks should another recession hit.
While Trump brags about Black unemployment being the lowest it’s been in modern history (thanks, Obama), the rate of which African Americans were out of work was still more than double that of white people. And with the president’s series of misguided tariffs, what the Associated Press called “higher budget deficits” and a racial wage gap that has continued to widen as the country remains recovering from the Great Recession, to say that Black people haven’t made as much economic progress as the rest of the country has is an understatement.
“And even today, although black incomes have recovered, African-Americans are still making only 63 percent of what whites earn,” Vincent Adejumo, lecturer of African American Studies at the University of Florida, wrote earlier this year, well before the widespread reports of a looming recession. “Coupled with the net worth and homeownership figures not recovering and even regressed since the recession officially ended, it means that blacks are still vulnerable to future economic downturns.”
With that said, Adejumo cited the Black homeownership rate and the value of those homes as a factor that contributed greatly to the spate of foreclosures that hit Black folks especially hard a decade ago. Since then, the Black homeownership rate has continued to shrink to a 50-year low. But while those statistics could mean fewer Black people will be as adversely affected by another recession, it could also spell further doom on the credit front, something many Black folks have struggled with. Without that ready access to credit, capital and collateral in an economic emergency, Adejumo argued, “even the slightest emergency in an economic downturn would result in a weakened ability to meet financial obligations” for Black people.
According to a report from Pew last year, Black people had the lowest household income among all of the races. It was more than $10,000 fewer than the next closest group (Hispanics). The Economic Policy Institute warned that another recession would probably increase that household income gap while also reducing the amount for Black families.
Considering all of the above, it was no wonder Black people were way more worried about another recession coming compared to their white counterparts — twice as many, to be exact, according to a survey published last October.
If there was a silver lining for people wary of a recession, a new one had still not hit as of Monday morning, leaving time for everybody to properly prepare as best they can. That means, according to CNBC, not panicking, bulk up on cash and not running up your credit cards. But, of course, that would mean having ready access to cash and credit, two things that have both been elusive to many Black people, which, in turn, could provoke some level of panic, especially during an economic setback.
There was, believe it or not, another possible bright spot — if another recession does hit, it won’t be nearly as catastrophic as the last one, financial planner Diahann Lassus told CNBC. “None of those signs are there,” she said.
Famous last words.