Source: U.S. Census Bureau
The Insight Center for Community Economic Development brought together experts from a wide array of policy and politics backgrounds to discuss issues of wealth inequality and racial disparities at an event this week titled “Race and Wealth Inequality in the Post-Election Political Environment.” By exploring issues of wealth and income from the perspectives of various racial groups, the commentators were able to shed light on the post-election prospects of important policy areas that were not explicitly raised by either candidate during the campaign season. Yet despite the conspicuous lack of electoral attention to vast racialized wealth disparities, all of the commentators expressed optimism about the possibilities for successful policy initiatives in the post-election landscape.
Because the purpose of the event was to discuss race, and since the recent election results were influenced by an unprecedented level of involvement from communities of color, an important theme throughout the event was the way policy interests of those groups could be furthered by leveraging their heightened level of influence on national elections. Panelists Tiffany Smalley (National Congress of American Indians) and Christine Chen (Asian and Pacific Islander American Vote) emphasized the growing electoral relevance of even these small communities in elections that are increasingly decided by margins smaller than the eligible voter populations of their groups. Jacqueline Pata (National Congress of American Indians) pointed out that asset building proposals targeted at low- and moderate-income Americans will tend to address wealth issues unique to tribal governments, which routinely struggle with 20 percent unemployment rates. Such high rates of unemployment in tightly-knit communities like Native American tribes diminish those communities’ hopes for wealth creation for generations. As Algernon Austin (Economic Policy Institute) notes, high unemployment leads to wealth destruction in self-reliant communities because when those in need borrow from others in the community, they effectively draw down the community’s wealth, leaving less to invest in the short- or long-term.
Jeff Cruz, a retirement expert at the D.C.-based non-profit Latinos for Secure Retirement, is especially interested in encouraging long-term investment among people of color, and Latino Americans in particular. He reminds us that Americans spend 20 percent of their lives in retirement, but most of us, especially Latinos, save as if it were a much smaller portion of our lives. Half of Latinos, who as a group live on average three years longer than whites, rely on Social Security for 90 percent of their retirement income, but receive dangerously low levels of benefits on average: $12,800 for men; $9,600 for women per year. Cruz warns that the looming deficit reduction packages may include further cuts to these benefits, which would disproportionately hurt Latinos, who rely heavily on those modest benefits. As a policy proposal, Cruz suggests that the most important priority for Americans’ retirement security, especially within the Latino community, is broad-based political support for Cost of Living Increases and extended Supplemental Security Income, both of which he sees as politically vulnerable.
Housing was considered to be “the most important issue not talked about in the election” by Janis Bowdler of the National Council of La Raza, whose self-proclaimed soap-box is housing accessibility. Bowdler, who participated in a panel on American debtat New America earlier this year, argues that we cannot fix the economy without improving the housing situation, and that we cannot fix housing without supporting communities. She interprets this to mean, among other things, continued federal support for mortgages in under-served communities. Particularly urgent for her is the issue of what institution or institutions will fill the mortgage-backing role in needy communities after the imminent dismantling of the nation’s current mortgage apparatus under Fannie Mae and Freddie Mac. In her view, the question remains how we will adequately serve the Latino community, which in 2020 will make up half of all first-time homebuyers, particularly when the private sector has not reliably served financially vulnerable communities.
Other panelists expressed their concern about the drastic cuts to social services expected as part of the fallout from deficit-reduction negotiations. In the post-election environment, Medicare vouchers and block grants for SNAP (food stamps) are no longer on the table, according to Indivar Dutta-Gupta (Center on Budget and Policy Priorities), who pushed back on the mainstream conventional wisdom by arguing that we could stabilize the debt-to-GDP ratio with just $2 trillion in deficit reduction as opposed to the oft-proposed figure of $4 trillion. He also noted that half of the proposed spending cuts under the Bowles-Simpson compromise have already been implemented, whereas none of the proposed revenue increases have been implemented, suggesting that relatively fewer spending cuts would be required as compared to revenue increases in future debt-reduction proposals.
The Insight Center has long been working to advance knowledge of and solutions for the racial wealth gap. This event showed how far that work has come, and if panelists at the event are correct, this election may well prove to be a turning point where serious action to reduce the racial wealth gap is at hand.