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Economic Gap Widens between Blacks and Whites
By: Lorinda Bullock
NNPA National Correspondent
Originally posted 7/12/2006

WASHINGTON (NNPA) – A weak U.S. economy and a low unemployment rate over the last couple of years has started to erode the progress Black Americans have gained in income, and has further widened the income gap between Blacks and Whites, says a new report from a Washington, D.C. think tank.

The Economic Policy Institute’s “The State of Working America 2006/2007” says that in 2000, a Black family’s median income was 63.5 percent of the earnings of their White counterparts. Figures show that the number dropped to 62 percent in 2004.

Jared Bernstein, an economist and author of the report, said, “That’s basically $37,000 versus $58,000, so it’s a significant gap.”

Bernstein said the late 1990s, with its robust job market, was an economically promising time for African-Americans, but that has since changd.

“Even in the best of times, I think the racial gaps whether we’re looking at income, wages, or wealth are unacceptably high, so I would think that an economic agenda to improve the living standards of Black Americans ought to be at the top of anyone’s list be they policy maker or voter… The Black-White Ratio got up to 64 percent in 2000 and that was the highest on record (since 1947) and that’s still a huge gap,” he said.

The fact that the minimum wage hasn’t been increased since 1997 hasn’t helped the plight of Blacks.

“Since African-American workers especially women are disproportionately paid wages at or near the minimum, it (a minimum wage increase) is definitely going to help them both in absolute and relative terms. Meaning in absolute terms, they’re going to make more, and they’re going to make more relative to folks who earn higher than the minimum wage who don’t necessarily get a boost when the minimum goes up,” he said.

Although a proposal led by Sen. Edward Kennedy (D-Mass.) to increase the minimum wage to $7.25 an hour by January 2009 failed last month, the debate to increase the national minimum wage of $5.15 an hour is far from over as campaigning lawmakers on Capitol Hill fight to keep their congressional seats in the fall.

Shortly after the defeat of the bill that included the minimum wage increase, Congressional Black Caucus member Congresswoman Barbara Lee (D-Calif.), expressed her disappointment.

“It is unacceptable that the Republican Majority in the House will vote today to give a tax cut to the heirs of millionaires while blocking an increase in the minimum wage for millions of hardworking Americans,” said Lee.

“This Republican-controlled Congress already approved an average tax cut of $42,000 this year to those making more than a million dollars annually. Instead of rewarding the hard work of Americans struggling to make ends meet, Republicans are hard at work making sure the heirs of the wealthy few get an enormous tax break.”

House Democratic Leader Nancy Pelosi (D-Calif.) said in a statement last week, “At the same time as energy prices are going up, the minimum wage has not been increased in nine years; it is still $5.15 an hour. People can hardly afford to fill up their car to get to work at $5.15 an hour. In our discussion on this issue in the last couple of days, Democrats are saying to the Speaker, ‘Mr. Speaker, until there is an increase in the minimum wage, we will not support any raise in congressional salaries.’”

Individual states do have the right to increase the minimum wage above the national rate and so far 21 states and the District of Columbia have done so.
Of those states, Arkansas, Hawaii, Maine, Michigan, New Jersey, New York and Rhode Island are set to enact the new rates this between this fall and the start of 2008.

Another report also co-authored by Bernstein, “Buying Power of Minimum Wage at 51-year Low,” said since the minimum wage was established in 1938, the longest period of time Congress went without adjusting the level was nine years and three months from January 1981 to April 1990.

If Congress doesn’t act by December 1, they could beat that record.

The report added, “Since September 1997, the purchasing power of the minimum wage has deteriorated by 20 percent. After adjusting for inflation, the value of the minimum wage is at its lowest level since 1955.”

Couple a steadily increasing cost of living with a minimum wage that’s been frozen for nine years and it just doesn’t add up—especially for the poor, the report said.

“The fact that the minimum wage has remained the same for nearly nine years means that its real value has declined considerably over this period. As inflation has accelerated recently due to higher energy costs, the real value of the minimum wage has fallen faster,” said the report.

Although the economy is constantly shifting—stable for a few years and unstable the next—Bernstein says Black Americans can’t wait in five or 10 years for the economy to shift more positively to narrow the gap for them.

He said acquiring more education and demanding that even local government create jobs are some ways to help.

“African-Americans should never stop being vigilant about these racial income and wealth gaps as long as they exist.''

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