African-Americans’ wealth dropped again in 2013, pushing their median household wealth below 1992 levels, as President Barack Obama continued to boost the supply of low-skill labor in a tightly regulated economy.
The median wealth of African-Americans’ households peaked from 2004 to 2007, with half of the households owning less than roughly $23,000 in savings, real estate, autos and other assets. Half owned more than $23,000.
The 2007 crash of the government-spurred housing bubble accelerated the slide for Africans-Americans. That crash pushed the median wealth of African-American households down from its 2004 peak to $11,000 in 20013, according to a new report by the Pew Research Center.
That’s 50 percent of the 2004 level, said the report, which is titled “Wealth inequality has widened along racial, ethnic lines since end of Great Recession.” The report is drawn from federal data.
A lot of the financial damage was done by the government-boosted mortgage bubble. The bubble grew because the government — and many helpers, including then-lawyer Barack Obama — pressured banks to help many poor Americans buy houses they could not afford to own.
The same change in wealth is visible among Latinos, where half of the households had a wealth than $23,600 in 2007. By 2013, five years into Obama’s low-growth, high-immigration economy, the Latin-American median household wealth had dropped to $13,700.
Whites, however didn’t do as badly in the Obama economy, partly because they had higher skills and relatively more wealth in stocks than just in housing.
In 2007, half of white households had a wealth of $192,500 or less. Half had greater wealth, including the top few percent.
The mortgage crash and the stock-market crash hit whites hard, pushing median their median wealth down to $141,900 in 2013.
That’s up slightly from the post-bubble low in 2010. Compared to Latinos and African-Americans, whites recovered faster from the crash, partly because Obama’s economic policies have boosted the stock market.
The faster recovery of whites ensures their median wealth is now 13 times the median wealth of African-Americans. In 2007, whites were only 10 times wealthier than blacks.
If the value of routine household items — autos, electronics and furniture, for example — are excluded from the comparison, then African-Americans’ median wealth is roughly $1,700, or less than one-seventieth of whites’ media wealth, according to a recent report. That’s far lower than in 2001, before when African-Americans’ wealth was one-tenth that of whites.
During Obama’s presidency, whites’ median wealth also increased relative to Latinos’ wealth. It was eight times larger in 2007, and is was 10 times larger in 2013.
The wealth gap may grow wider in the next few years, if Obama’s amnesty isn’t reversed by the courts.
That’s because Obama is trying to give work permits to at least five million illegals, plus at least 200,000 foreign migrants and guest workers. Most of the beneficiaries are expected to compete for jobs against low-skilled Americans.
For example, 60 percent of the 553,197 younger illegals who got work permits because of a 2012 decision by Obama also got new jobs. Those jobs could otherwise have gone to some of the four million Americans who enter the workforce each year, or to some of the one million legal immigrants per year.
Low-skilled whites, African-Americans and Latino-Americans also find themselves in direct competition with the one million legals immigrant who arrive each year, mostly from Latin America.
Progressives and liberals ignore the economic impact of surplus labor, and instead blame the wealth gap on racism. However, they also say that decades of efforts to eliminate racism have failed, and insist that Americans must continue to counter racism instead of raising wages.
Some GOP politicians are trying to stop the economic damage. “Republicans … can either join the Democrats as the second political party in Washington advocating uncontrolled immigration, or they can offer the public a principled alternative and represent the American workers Democrats have jettisoned,” said Sen. Jeff Sessions, in a March 2014 op-ed.
But the pro-business GOP leaders in the House and Senate tacitly support Obama’s amnesty, despite furious protests from some GOP legislators and many voters.
African-Americans’ best economic years came in the late 1990s, when the Internet-boosted economy ran out of workers, and forced employers to offer higher wages to low-skilled workers in the tight labor market.
In 1989, African-Americans’ median wealth was one-seventeenth of whites’ median wealth. But the labor-shortage spiked their wages in the late 1990s, raising their median wealth to one-sixth of whites by 2001.
However, President George W. Bush loosened the labor market by allowing a huge inflow of illegal immigrants. Those migrants helped inflate the real-estate bubble — but also helped ensure the crash by suppressing wages so that many illegals, immigrants and African-Americans quickly defaulted on pricy mortgages purchased after 2003.