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Build Black Women’s Wealth, Heal America

Words: Anne Price and Andrea Flynn
Pictures: Daniel Thiele

In this current moment, in which we are looking to enact near-term and sustainable solutions to address the economic impact of the COVID-19 pandemic, we can learn how to climb out of economic catastrophe by looking at the experiences of Black women in America.

Black women have always felt the brunt of the cruel, profit-centered, dehumanizing rules of our economy – rules that have stripped them of power, dignity, and choice. We don’t need to look much further than the data on wealth inequality to see this reality.

Wealth is always important, but it is particularly crucial in moments of crisis, and those who have the least will be hurt the most. As of 2013, Black and Latina women had a median net worth of $200 and $100 respectively, compared to the median net worth of $15,640 for White women and $28,900 for White men. Wealth allows people to continue to pay their mortgage or rent, to access health care when they are un- or under-insured, and to quit a dangerous job – like one that exposes them to sexual harassment, or assault, or to a global pandemic – it allows people to continue to care for their families.

The experiences of Black women provide us a birds-eye view, not only for how racial wealth inequality will widen post-pandemic, but also how difficult it will be for women and their families to recover in the months and years ahead. Even before COVID-19 wreaked havoc on the US economy, Black women had still yet to fully rebound from the 2008 Great Recession. As a result of the last recession, Black Americans saw half of their wealth vanish. Black women lost jobs at an alarming rate and their economic recovery was slow. The unemployment rate of Black women between the ages of 25-34 was higher in 2016 (8.8%) than that of White women in 2010 (7.7%), when the Recession’s impact was at its peak. The job losses of the 2008 Recession were exacerbated by the less-visible effects of wealth extraction, where local governments disproportionately imposed civil and criminal fines and fees on Black people in order to fill their budget shortfalls. Black women have always played – and continue to play – an outsized role in helping family members cover these debts.

We must use our present moment of economic crisis to learn from the failures of our government’s response to the Great Recession, and anticipate that the impact of the catastrophic COVID-19 Crisis will be deeper and longer than that of 2008.

Black women were also on the front lines of wealth extraction schemes as a result of the imbalance in corporate and public power. Despite Black women having higher credit scores, many banks deliberately peddled them bad mortgages. Black women were 256% more likely to receive a subprime mortgage than a White man with the same financial profile.

We must use our present moment of economic crisis to learn from the failures of our government’s response to the Great Recession, and anticipate that the impact of the catastrophic COVID-19 crisis will be deeper and longer than that of 2008. We must invest in greater public provision that addresses both harmful market dynamics and pervasive structural racism. This would improve the lives of Black women and all Americans. We must leverage the tools of government to redistribute power away from the corporate interests that threaten our financial stability towards people and their communities. The same corporations that were responsible for the 2008 foreclosure crisis – the institutions that targeted Black women and were responsible for the extraction of wealth from Black families – were bailed out and reaped massive returns.

We cannot allow that to happen again.

Building the wealth and health of Black women should be a goal of our response efforts. Ensuring that policies meet the needs of those most marginalized ensures that all Americans will benefit, as recent research from Brandeis’ Heller School has shown. But as we have seen over the course of history, race- and gender-blind policies, such as those included in the New Deal, provide pathways for advancement for some (mainly White families) while leaving those who have been historically excluded behind.

The Federal Government’s $2 trillion CARES Act falls woefully short of providing promised emergency fixes for the most marginalized, and it will result in uneven racial and gender outcomes. Its wage replacement and public supports are insufficient to compensate for the historic loss of income and ensure that families can survive and get back on their feet. Not only are the one-time payments of $1,200 inadequate relative to the scale of economic catastrophe that we are facing, but also many marginalized Americans – such as those who are unbanked, those who are undocumented, and those whose earnings are so low that they don’t file taxes – will experience delays in receiving payments or won’t receive them at all. It’s important to remember that as of 2017, approximately 8.4 million households don’t have a banking account because they lack the funds necessary to open and maintain it. Those households are disproportionately people of color: nearly half of Black households are unbanked or underbanked. The costs and fees that result from that reality can add up to nearly $40,000 over the course of a financial lifetime.

One of our most immediate fixes to increase Americans’ lost income must include sustained direct checks to families for the duration of this pandemic. Extending support beyond a one-time payment provides relief to families teetering on the edge of poverty. There is currently a proposal by Congressman Ro Khanna to provide a $2,000 monthly payment to every qualifying American over the age of 16 for up to 12 months. It also closes a glaring loophole in the CARES Act to ensure college students and adults with disabilities can still receive the payments, even if claimed as a dependent. This proposal would create a vehicle to get payments into the hands of the unbanked, allowing them to use a pre-paid debit card or mobile money platforms such as Venmo, Zelle, or PayPal.

Boosting income through sustained direct payments will be an important factor to help families survive through the current crisis without depleting any assets they might have. Black Americans, especially Black women, are more likely to use their savings and other meager nest eggs to financially support family members who are living in poverty. One study shows that middle-class Black families suffered a nearly 27% reduction in their wealth relative to White families as a result of supporting kin networks. Factors like these should be considered in any relief bill to ensure that the people who most need resources are able to access them quickly and easily.

Finally, we must use this moment to reimagine public power, redefine what we consider to be public goods, and then invest in them deeply. Health investments should be front and center. The CARES Act provides resources to hospitals and states to help cover COVID-19-related costs (albeit insufficiently), but it fails to expand health coverage or even cover COVID-19 treatment for the uninsured. Inadequate health coverage has negative health and economic implications. Medical debt and past-due bills negatively affect credit scores, drain savings, and often lead to bankruptcy. Nearly one-in-three Black American adults who are under age 65 has past-due medical bills. Expanding public coverage options, such as Medicare and Medicaid, must be included in a future relief package. As a result of racially motivated opposition to the Affordable Care Act’s Medicaid Expansion, 14 states still do not offer expanded coverage; nine of those states have a high proportion of Black women who work in jobs that lack employer coverage, and many of those states also have among the worst health outcomes for women and children.

Our nation must make considerable investments in working people on a scale commensurate with all that has been lost as a result of COVID-19, and all that has been lost through many decades of economic policies that funneled profits and power to corporations and the financial elite. Investments that center on Black women will benefit everyone, but as we have seen from centuries of policies that have failed Black women and their families, justice doesn’t just trickle down.

Anne Price is the President of the Insight Center for Community Economic Development and a Fellow at the Roosevelt institute. Her work focuses on race, gender and wealth inequality.

Andrea Flynn is the Director of Health Equity at the Roosevelt Institute. 

Anne Price and Andrea Flynn

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