The Color of Poverty
Sunday, September 28th, 2008I was listening to a story on National Public Radio this evening about “poor people”–which turned out to be about black and Hispanic Americans living in a central city somewhere in the U.S. I was troubled by how often we focus on black and Hispanic people when the topic is about poor people–as if the two are the same. Given this lopsided way race and poverty are portrayed and discussed in our media, it is not surprising that so many of us (including black and Hispanic Americans themselves) assume that connection.
In truth, however, half of all black and Hispanic families are “middle class.” Granted, that term is extremely broad and, in fact, most Americans consider themselves “middle class”–including many people who earn over $100,000 and less than $15,000 per year. This is because for most people the category has as much to do with cultural values as it does income, wealth, and status.
Nevertheless, with respect to their economic circumstances, families can be considered more or less firmly embedded into the middle class. Economists call this “Middle Class Economic Security,” and a report was published this past summer by Demos, a non-partisan public policy research and advocacy organization, in which the security of black and Hispanic middle class families was examined and compared to the security of middle class American families as a whole. (Unfortunately they left Asians and Native Americans out of their analysis.) By and large the research seems to be carefully crafted–and the findings are worth considering.
To begin, they measure “security” according to five broad indicators:
1. Assets: number of months able to live at 75% of a family’s current living expenses using only savings
2. Academic Degree: a family with at least one person with a college degree is more secure
3. Housing: percent of after tax income spent on housing
4. Budget: amount left over at end of year after paying taxes and all expenses
5. Healthcare: number of family members covered by health insurance.
From these indicators, they create an “index of security” that they use to ascertain how secure a given family or group of families appears to be. Here is a summary of their findings:
While 31 percent of American middle class families are securely in the middle class, only 18 percent of Hispanic families and 26 percent of black families have the combination of assets,
education, sufficient income, and health insurance to ensure middle-class financial security.
And while one in five (21 percent) of American families are at high risk of falling out of the middle class, one in three (33 percent) African American familes and twice as many (41 percent) Hispanic families are in serious danger of slipping out of the middle class.
Keep in mind that the security index of “American families” includes black and Hispanic families and is not an index measure of white families — and so it is skewed downward. Having said that, it is worth pondering just how many Americans of all ethnic and racial backgrounds are at risk.
Consider this:
* A full 95 percent of African-American and 87 percent of Hispanic middle class families do not have enough net assets to meet three-quarters of their essential living expenses for even three months if their source of income were to disappear. Both figures are well above 78 percent, the national average among all middle-class families.
* Sixty-eight percent of African-American and 56 percent of Hispanic middle-class households
have no net financial assets whatsoever and live from paycheck to paycheck. Just over half (52 percent) of Americans in general have no financial assets.
Check out the “By a Thread” report. It is worth thinking about.
Though it is essential to understand these differing patterns of wealth and poverty between groups, it is also important to notice how often our perception of this data is skewed by the sheer number of times the media mixes the term “poor” with the term “black” or “Hispanic.”