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USA - SINGLE BLACK WOMEN
FACE MAJOR FINANCIAL CHALLENGES - STUDY
March 09, 2010
By Tim Grant, Pittsburgh Post-Gazette
Women of all races bring home
less income and own fewer assets, on average, than men of the same race, but
for single black women the disparities are so overwhelmingly great that even in
their prime working years their median wealth amounts to only $5.
In a groundbreaking report
released Monday by a leading economic research group, social scientists turned
a spotlight on the grave financial challenges facing an often overlooked group
of women, many of whom could not take an unpaid sick day or repair a major
appliance without going into debt.
"It's rather
shocking," said Meizhu Lui, director of the Closing the Gap Initiative
based in Oakland, Calif., who contributed to the report "Lifting as We
Climb: Women of Color, Wealth and America's Future."
Among the most
startling revelations in the wealth data is that while single white women in
the prime of their working years (ages 36 to 49) have a median wealth of
$42,600 (still only 61 percent of their single white male counterparts), the
median wealth for single black women is only $5.
"Even for those of us who
have been looking at the wealth gap for a while, we were shocked and amazed at
how little women of color have," Ms. Lui said.
Researchers at the Insight
Center for Community Economic Development, based in Oakland, Calif., analyzed
data from the 2007 Survey of Consumer Finances, a voluminous report the Federal
Reserve Board issues every three years that examines household finances in this
country.
Wealth, or net worth, measures
the total of one's assets -- cash in the bank, stocks, bonds and real estate;
minus debts -- home mortgages, auto loans, credit cards and student loans. The
most recent financial data was collected before the economic downturn, so the
current numbers likely are worse now than at the time of the study.
Black women, in general, were
more likely to have participated in the subprime loan crisis with upper-income
black women being five times more likely to have received a high-cost mortgage
than upper-income white men.
"The popular image is they
spend too much, which is the reason they are running up credit card and
consumer debt, but the cost of living has risen faster than income, and they
need to go into debt for basic daily necessities," Ms. Lui said.
"It's compounded because unemployment is twice as high in the black
community than it is in the white community."
For all working-age black women
18 to 64, the financial picture is bleak. Their median household wealth is only
$100. Hispanic women in that age group have a median wealth of $120.
"That means half of [black
women] have a net worth of more than $100 and half have a net worth of less
than $100," Ms. Lui said. "So that gives you an idea of how far in
debt some women of color are."
Married or cohabitating white
women have a median wealth of $167,500. Married or cohabitating black women
have a median net worth of $31,500.
The reasons behind the daunting
financial challenges black women face are numerous and complex.
"There are excuses and
circumstances that have evolved in society, which put black women where they
are," said Esther Bush, executive director of the Urban League of Greater
Pittsburgh, who said in Pittsburgh more than 70 percent of African-American
families are headed by single women.
The recession has hit single
mothers especially hard.
According to a recent report by
the Institute for Women's Policy Research and the Women and Girls Foundation of
Southwest Pennsylvania, more than four out of 10 families headed by single
mothers in Pittsburgh and more than one in three in Pennsylvania, live in
poverty.
In Pittsburgh and across the
country, the financial burdens of single parenthood fall mostly on women, but
black women are more likely to endure the work and responsibility of raising
children on their own. They are more likely to be the backbone of their
families and communities, with greater responsibilities to support struggling
friends and families.
In a 2008 study of black women
and their money, the ING Foundation found that black women -- who frequently
manage the assets of their households -- financially support friends, family
and their houses of worship to a much greater degree than the general
population.
They also are more likely to be
employed in jobs and industries -- such as service occupations -- with lower
pay and less access to health insurance. And when their working days are done,
they rely most heavily on Social Security because they are less likely to have
personal savings, retirement accounts or company pensions. Their Social
Security benefits are likely to be lower, too, because of their low earnings.
Rather than strictly comparing
income, researchers in the Insight study looked at the wealth gap. The current
economic crisis has shown that a person's wealth affects not only retirement
security, but also a person's ability to handle financial setbacks such as a
job loss or a health emergency.
High unemployment and high
incarceration rates for black men also lower the likelihood of single black
women finding a partner to help build a more secure financial future.
Ms. Lui said the Insight report
would be used to encourage the government to close the wealth gap and improve
the outlook for women of color, just as it did for Americans who received land
through the Homestead Act, and education through the GI bill.
"If wealth was based on
hard work, African-Americans would be the wealthiest people in our
nation," she said. "It's not about behavior. It's about government
policies. Who does the government help and who is it not helping?
"Our government knows how
to build wealth for people. They've done it for others and they can do it for
all of us. They need to focus some attention on women of color. Look at the
situation and see what we need."
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