The answer for many about the income disparity between the races is education. However, recent studies show that education may not solve the problem of low income for African Americans and Hispanics. In fact, research indicates that those who have a college education may have a greater division by race than those who have not graduated from a higher learning institution.
A report from the Federal Reserve Bank of St. Louis shows that black Americans and Hispanics have seen their income diminish since the 1990s. Their income levels have fared worse than income from Asian and white Americans, which actually grew during the same time frame. . (Even with college degrees, blacks and Hispanics fall behind, August 2015)
Median income for black Americans who graduated from a four-year college was at $59,300 in 1992 but dropped to $52,150 in 2013. According to this report, whites saw an eighteen percent increase in their income during this time period while Asians had an increase by 30.9 percent. Hispanics had a decrease in income of ten percent with blacks faring the worst with 12.1 percent decrease. . (Even with college degrees, blacks and Hispanics fall behind, August 2015)
At the same time, Hispanics and blacks who did not have a degree actually saw their incomes increase for the same period. For Hispanics, there was a 15.6 percent increase while blacks without degrees increased their income by 17.3 percent.
According to the report, higher-paying careers, such as those in technology, are held primarily by Asians and whites. These cultural groups also have obtained advanced degrees beyond the initial bachelor’s degree. The higher level of education made them more competitive in the marketplace and led to higher salaries. Blacks have the lowest graduation rates at forty percent with Hispanics at fifty-one percent. Whites have a sixty-two percent graduation rate with Asians at the highest level at sixty-nine percent. (Race Gap Narrows in College Enrollment, but Not in Graduation, Apr 2014)
When asked why African Americans and Hispanics struggled more to find jobs with higher income, a St. Louis economist, William Emmons, stated that the races continue to deal with discrimination in hiring.
Income is only one indicator of wealth, but Hispanics and African Americans did not fare well in this area. While both whites and Asians saw their levels of wealth rise, Hispanics saw a drop in median wealth by 27.4 percent. For blacks, it was a decrease of 55.6 percent.
Wealth considers assets such as homeownership as well as savings and retirement accounts. The percentage of African Americans and Hispanics who are homeowners is much lower than for whites. Another issue is the amount of student loan debt that Hispanics and blacks carry after attending college. These groups had a higher rate of debt than others when the recession began.
These same groups had much of their assets tied to their houses, which lost value with the housing crisis in 2008. Another report by Demos shows that these same two groups borrow more money for college than whites and Asians, which creates more debt once they complete their degrees.
Net worth for the two groups who did not go to college was much difference. Hispanics actually enjoyed an increase of 30.8 percent in wealth. Blacks without college degrees only lost 3.8 percent of their wealth. On the other hand, college-educated blacks and Hispanics enjoyed higher incomes than those who never attended college. . (Even with college degrees, blacks and Hispanics fall behind, August 2015)
African Americans with four-year degrees had average household incomes of $52,150 while those without degrees averaged $26,600. For Hispanics with college education, their income averaged $52,150 while $30,450 was the average income for those without advanced education. (Even with college degrees, blacks and Hispanics fall behind, August 2015)
Looking at the overall statistics for the report, it is obvious that African Americans lack many opportunities that other ethnic groups enjoy. At the same time, we carry more debt which inhibits their ability to seek out new avenues to increase our wealth. The struggle to earn one’s education and overcome discrimination in hiring will always be present, but we must push on and be persistent in job searches. Report discrimination. Get your resume out there. Build connections. We will overcome these challenges and build up minorities in this country. The power is now!
Eric Lawrence Frazier, MBA
President and CEO