Researchers at the Urban Institute believe that this emerging income gap is turning into a wealth gap. They found that the average net worth of people ages 29 to 37 had fallen 21 percent since 1983, while the net worth of 56- to 64-year-olds had nearly doubled. This means that millennials may be the first generation in U.S. history to acquire less wealth than the generation before it.
This phenomenon is exponentially compounded for African Americans. According to the Census Bureau, the wealth gap between whites and blacks nearly doubled during the recession, with whites having 22 times more wealth than blacks. The median household net worth for whites was $110,729 in 2010, versus $4,995 for blacks. This was exacerbated by the mortgage crisis of 2007-2008 as black and Hispanic families disproportionately lost homes to foreclosure — victims, too often, of bad loans and discriminatory banking practices.
Employment, income and wealth are interconnected, and as African Americans experience deeply entrenched underemployment — regardless of the cause — the result is that a generation of people who hoped for greater prosperity than their parents faces diminished opportunity and higher levels of poverty.
As the class of 2013 dons hats and tassels, data show that college education is losing its premium value. According to an Associated Press report, 1.5 million graduates in 2011, or 53.6 percent of those under the age of 25 who have a bachelor’s degree, were jobless or underemployed — the highest share in 11 years. And 37.8 percent of employed college grads were working in a role that didn’t require a degree, according to a report by the EPI. By comparison, only one-fifth of 16- to 19-year-olds were unemployed — suggesting that young, college-educated workers are struggling more to find employment than those with high school diplomas.
Perhaps unsurprisingly, the outlook for educated African Americans is even grimmer. The EPI report found that blacks with college degrees still lagged behind their white counterparts. In 2007 the unemployment rate of young black college graduates was 8.5 percent, rising to 21.9 percent by 2010. By 2012 that number had improved to 10.8 percent. White college graduates experienced an unemployment rate of 5.3 percent in 2007, which rose to 9.4 percent in 2010 and fell to 8.7 percent by 2012. This means that race remains a key factor in employers’ hiring decisions.
That theory is borne out by research showing that black immigrants from the Caribbean, Africa and Latin America have struggled as much as native-born African Americans. In fact, they do worse, according to Patrick Mason, professor of economics and African-American affairs at Florida State University.
A popular myth is that black immigrants do better than native-born blacks. Mason, whose research is presented in “The Low Wages of Black Immigrants,” argued that if black Caribbean males were doing better, “it might suggest that [this racial wage gap] was not due to discrimination.”
It seems when it comes to underemployment, income disparity and wealth gaps, race matters more than education levels. And for generations X and Y, the nation’s progress toward racial equality over the past 50 years may not translate into dollars and cents.
Edward Wyckoff Williams is a contributing editor at The Root. He is a columnist and political analyst, appearing on Al-Jazeera, MSNBC, ABC, CBS Washington, Arise America and national syndicated radio. Follow him on Twitter and Facebook.