On the stump, President Barack Obama often insinuated to black voters that Republicans would take them back to the pre-Civil Rights era of Jim Crow, but his economy has wiped out nearly all the gains the black middle class has made since integration.
A record number of black voters went to the polls in 2008 and 2012 for President Barack Obama, but his economic policies–on top of the housing bubble that burst due to reckless subprime mortgages before the Great Recession–have decimated the black middle class, wiping out nearly 30 years of gains.
According to the Economic Policy Institute, “black households had a median net wealth of just $4,900 in 2010, compared with $97,000 for white households,” and a “a third of black households had zero or negative wealth.”
Since blacks have not been able to accumulate “generations of wealth,” home values account for nearly 60% of an average black family’s wealth.
The American Prospect found that while most “middle-class families hold all of their wealth in their homes,” this is “especially true for the median black family” because many families do not own any stocks.
“That means the housing crisis has wiped out an entire generation of black wealth,” The Prospect wrote. This is made tougher because there is “no family wealth to fall back on in hard times” because “wealth is not very deep” in minority communities.
The Prospect profiled Prince George’s County in Maryland as being emblematic of the rise and fall of the black middle class. In that county, foreclosure rates “were 4.19 percent, compared to 1.87 percent in Maryland and 2.21 percent in the nation as a whole.”
In 1999, after President Bill Clinton signed the Gramm-Leach-Bliley Act, which “allowed lending banks and investment banks to operate under one roof,” predatory lenders targeted areas like Prince George’s County, which had a lot of minorities.
Today in Prince George’s County, “the typical client has a mortgage of $300,000, and their house is worth $150,000.”
In 1990, Prince George’s County became majority black for the first time since slavery “because black professionals were mostly displacing rural and working-class whites.” It also became the “wealthiest majority-black county in the nation” as “most of the professionals who bought homes in Prince George’s County came from Washington’s black middle class.”
According to the Prospect, laws “that expanded minority homeownership, combined with a booming mortgage market, brought more and more black residents out to the suburbs” as blacks made up 65% of the county’s population in 2010, up from 14% in the 1970s. In addition the county was one of the few “that grew wealthier as it became blacker” as “median income in Prince George’s outpaced the national median from the 1970 census forward.”
But when the house of cards that was the housing market collapsed, many in the black middle class were left living paycheck to paycheck. This is an issue Obama has rarely discussed or addressed because his economy has made it nearly impossible for those in the black middle class to rebuild their wealth let alone tread water.