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Thanks to the racial wealth gap, the poor will suffer more

The COVID-19 epidemic is of particular concern to black, Latin and other vulnerable communities. These communities are disproportionately uninsured or underinsured and have fewer financial resources and employment benefits to deal with this serious public health emergency.

Nothing demonstrates this vulnerability more clearly than the dramatic and persistent gap in racial wealth between the generations. The COVID-19 pandemic is another stark reminder that the next administration must tackle wealth inequality and make asset security a top priority.

The influence of wealth

When unforeseen emergencies arise, the wealth of an individual or a family can provide them with protection. Wealth, especially liquid wealth – resources that can be easily converted to cash – enables individuals and families to respond to life events and unforeseen expenses, such as loss of income that can result from a pandemic.

Unfortunately, and unfairly, wealth has been unevenly distributed in America. The typical white family has 10 times the wealth of the typical black family and seven times the wealth of the typical Latin family. This austere and persistent racial wealth gap leaves blacks, Latins and those with low assets vulnerable. They are less likely to afford several days – let alone weeks – without an income.

Wealth is his asset minus his debts. Black and Latin communities are less likely to own assets. For example, nearly 30% of black households with a college education and 20% of Latin households with a college education would not be able to afford all of their bills after an emergency expense of $ 400.

These numbers rise to nearly 60% and 50%, respectively, for out-of-school Black and Latin households. With little to no liquid wealth and vulnerable employment prospects, black and Latin families are more likely to face greater housing insecurity, including eviction and foreclosure, which in turn will worsen the racial ownership gap.

America is on the verge of entering a recession that will have particularly negative effects on black and Latin communities, which are generally the first to feel the effects of economic downturns. They are also the last to recover from economic fluctuations.

For example, when looking at the median wealth of black and white families after the Great Recession, the wealth of black families in 2016 was about half of the median wealth of blacks recorded just before the Great Recession. In comparison, the median wealth of whites in 2016 had increased by almost 15% since the Great Recession.

This highlights the bigger impact a recession can have on the racial wealth gap. In short, a recession only exacerbates the already existing vicious circles of low wealth for black and Latin families.

In addition, black and Latin employees receive lower wages than their white counterparts in a similar situation. For example, black, Asian and Latin workers are overrepresented in the restaurant and hospitality industry, two industries facing shutdowns in response to the coronavirus.

Additionally, black workers often have less stable jobs, such as retail and home health care jobs and home help jobs. In addition to being more likely to work in low-paying jobs, black and Latin workers are more likely to work in jobs less likely to offer full benefits.

Only 16 percent of Latin workers and 20 percent of black workers have the ability to work from home, compared to 30 percent of white workers. Black and Latin workers also have less access to paid sick leave and paid childcare leave.

When considering the intersection of race and gender, this inequality is particularly daunting for black and Latin women, who often shoulder a greater share of caregiving responsibilities. They are also more likely to work in low-paying service jobs than their white counterparts. In addition, these employment figures do not include all black and Latin men incarcerated and thus rendered “invisible” in labor market statistics.

Policy recommendations
Ensure access to affordable or free medical care

Persistent financial barriers to health care coverage can prevent blacks and Latins from accessing the medical care they need, including the treatment they need if they are exposed to the COVID-19 virus.

All states that have failed to expand Medicaid should do so immediately. Anyone in need of care shouldn’t face the financial stress or stigma that can deter them from seeking coverage and thus endanger themselves and others.

Ensure that paid sick leave and paid family and medical leave are available to all workers

As Congress has taken a first step toward providing targeted protections to workers, it is important to expand protections to ensure workers across the country have access to paid sick days, family and medical leave. paid to meet their health and care needs.

Send money directly to households
As families and communities struggle to manage their expenses during this volatile time, it is important that the government consider different options to support workers who are experiencing this economic shock.

Increase access to capital for minority businesses
Many black and Latin American-owned businesses have limited capital to survive in the short and long term. Therefore, it is imperative that policymakers ensure that these companies have access to capital.

Take comprehensive measures on student debt
There are more than 40 million federal student loan borrowers who may struggle to make their payments during the outbreak. Black borrowers take on more debt and are less likely to get the same return on their investment as their white counterparts. They are also more likely to fail. Policymakers need to ensure a strong package that at least stops the accumulation of additional interest and provides for a moratorium on all student loan payments and collection activities.

Temporarily waive all late payments for credit card and car loan payments
Black and Latin households are less secure economically than white households. Black borrowers tend to have more debt and pay more for installment loans such as credit cards and car loans. This is in part due to credit management and discrimination in the credit market.

Establish a moratorium on housing evictions and foreclosures
State and local governments should seriously consider efforts across the country to impose moratoria on housing evictions and foreclosures.

After the crisis, it is important to undertake structural changes in US economic policies to ensure that the necessary health and economic infrastructure is in place the next time the country is faced with a resulting pandemic or impending disaster. climate insecurity. Closing the unjust racial wealth gap should be a top priority to ensure more equitable, just and resilient communities.

Danyelle Solomon is the Vice President of Racial and Ethnic Policy at the Center for American Progress. Darrick Hamilton is the Executive Director of the Kirwan Institute for the Study of Race and Ethnicity and Professor of Public Affairs, Economics, Sociology, and African and African American Studies at Ohio State University..