United Church of Christ

Race, Ethnicity, and Economic Justice

In Faith We Seek the Beloved Community:
People of Color are Disadvantaged in the Downturn

Many of us continue to struggle with the economic downturn. Millions are jobless, millions more have seen reductions in their pay and work hours, and many have lost their homes or apartments through foreclosures.

The downturn has affected everyone but the impact has been most severe among people of color. We have an African American president and some pundits proclaim a post-racial society. But economic disadvantages associated with race and ethnicity are still with us.

During the recession as unemployment rose among whites, it skyrocketed among people of color. Unemployment peaked among non-Hispanic whites at 8.9% (1) but soared to 16.5% among African Americans and 13.1% for Hispanics. These disparities are shocking but not atypical. African Americans are generally about twice as likely to be unemployed as whites and Hispanics are 50% more likely.

During the housing boom, some mortgage lenders – including those associated with major national and international banks – engaged in shady and even fraudulent practices. The targets for subprime loans with higher fees and interest were most commonly people of color. In 2006 during the peak of the housing boom, blacks and Hispanics were more than twice as likely to have subprime mortgages as whites with comparable incomes.(2) In Memphis, one major national bank intentionally selected African American neighborhoods as the target for the most expensive and objectionable mortgages.(3) In New York City, black households making over $68,000 a year are almost five times as likely to hold high-interest subprime mortgages as are whites with similar or even lower incomes.(4)

The workings of the economy are often assumed to be fair and rational: layoffs are based on workers’ performances and the needs of the company, mortgages on credit scores and income. But the outcomes tell a different story. Race and ethnicity still matter. Unequal treatment that disadvantages people of color is common.

In 1967 Dr. Martin Luther King, Jr., wrote: “Depressed living standards for Negroes … are a structural part of the economic system of the United States.” Many things have changed in the last 43 years but racial injustice has persisted. The factors behind these unjust structures range from the personal to the systemic and institutional. They must all be rooted out so the Beloved Community can flourish. Racial justice is a priority for people of faith.

(1) October 2009.
(2) Leland, John; “Homeownership Losses are Greatest Among Minorities Report Finds” New York Times 5/13/09
(3) Powell, Michael, “Decades of Gains Vanish for Blacks in Memphis” New York Times 5/31/10
(4) Powell, Michael and Janet Roberts, “Middle Class Suffers – Neighborhoods are Devastated”  New York Times 5/16/09