“Over the last half century, I’d say that for many indicators, things have stagnated,” said Ellora Derenoncourt, an assistant professor of economics and public policy at the University of California, Berkeley. “The wealth gap, the income gap, the income gap.”
The decline of wealth narrowed somewhat over the following years, until the financial crisis a little over a decade ago. More blacks have become homeowners, but factors like the constant segregation of housing have meant that the value of their housing – and their net worth – has not risen as much as it did with white homeowners, said Edward Wolff, a professor of economics at New York University. Also, black families had higher levels of mortgage debt.
The mortgage crisis that triggered the economic collapse reversed those gains. House ownership rates among blacks have fallen from almost 50% in 2004 to a low of 40% in recent years – a level not seen since the 1960s, according to the Urban Institute. Congress passed the Fair Accommodation Act in 1968 to ban racial discrimination.
“They have failed much harder than white families since falling house prices,” Wolff said of Black homeowners. “Lower income plus the credit crunch meant they were left without a housing market after 2010.”
The median income of black households rose from the late 1960s to the 1970s after several federal reforms, including the Civil Rights Act of 1964, which prohibited discrimination in employment and created the Equal Employment Opportunity Commission. This helped reduce the gap between the average incomes of black-and-white families during that time, experts noted.
Also, expanding coverage of the federal minimum wage in agriculture, restaurants, nursing homes and other services – which employed nearly a third of undeclared workers – helped narrow the wage gap between blacks and white Americans during the period, said Derenoncourt, who researched is the impact of the Fair Work Standards Act of 1966.
After that, the division widened again after the Black Americans lost ground.
Researchers point to a variety of factors that explain the turnaround, including a weakening of federal efforts to combat structural racism and a decline in association, as well as an increase in families headed by single black mothers and in male prisons. And while black Americans have gained more education, they are still underrepresented in higher education, better paid jobs.
By 2019, the average earnings ratio between blacks and white Americans declined where it was in the 1970s for both men and women, an analysis by Samuel Myers, Jr., director of the Roy Wilkins Center for Human Relations and Social Policy at Justice on University of Minnesota.
“We have failed to change the mechanisms by which we reproduce wealth, by which we reproduce skills, by which we reproduce market results,” Myers said. “And it’s related to race.”
One of the areas where the racial gap has narrowed in the last five decades is poverty.
In 1970, there were nearly four times as many non-Hispanic black Americans in poverty as there were non-Latinos. In 2018, that ratio was around 2.6.
A more consistent narrowing of divisions began during the 1990s, a period of economic prosperity and a hot labor market. Also, some government programs for low- and moderate-income Americans — such as earned-income loans — have been tailored to make work more attractive. And in 1996, Congress changed welfare, reducing assistance to families and prioritizing employment.
The trend continued during the 2008 crisis, which increased financial troubles among all Americans, but also in recent years.
Yet approximately one in five black Americans live in poverty, said Christopher Wimer, co-director of the Center for Poverty and Social Policy at Columbia University.
“Even though it’s declined in the last 50 years, it’s still a shockingly high number,” Wimer said.
Another area where the gap between races is narrowing is the share of each group employed. That gap has narrowed by almost half since 1972, although there has been an improvement in this decade, which has seen steady job growth until a coronavirus pandemic hit in March.
“In the tight labor markets, African Americans who were previously excluded are now getting jobs,” said Olugbenga Ajilore, a senior economist at the center-left for American progress.
Until the outbreak of the epidemic, unemployment was at or close to the level of 50 for several months.
Yet the problems that have plagued black Americans for decades still exist. Persistent employment discrimination has kept the rate of unemployed blacks at twice or above twice the unemployment rate, Ajilore said.
“This positive period still had fundamental issues, which this pandemic has also made clear,” Ajilore said.