The New York Times recently ran an article about black families having their electricity cut off more frequently or ending up in jail because of a small fine more than white families. The premise was that this was not overt racism or the “perils of discrimination” but rather a cumulative effect of black versus white economics.

The biggest difference between the black and white families when it came to many areas of life was wealth. In 2013, a federal government study found that over 25 percent of black families had less than $5 in reserve. Low-income whites had about $375. The study also found “the median wealth of white households was 13 times the median wealth of black households, the widest gap since 1989”. When you don’t have money or reserves, you can’t pay your bills, when you can’t pay your bills, they shut off your electricity or take you to jail over a parking ticket. The issue gets more compounded when there is an emergency that requires a loss of time at work.

The Times article referenced the lack of loans to black Americans after WWII as a major contributor to the current crisis in black America. As whites were able to buy homes and acquire wealth, blacks were not allowed to do so. This created decades of lost opportunity.

Debt collection practices also target blacks more than whites. The debt collectors will tell you that it has nothing to do with race, they just go where the debt is. The debt is in the low-income areas that are predominately black. The Times’ reporters found a different truth, they found that “even accounting for income, the rate of court judgments from these lawsuits was twice as high in mostly black communities as it was in mostly white ones.” Once a debt moves past collections and becomes a court judgement, collection agencies can go after your bank accounts and garnish wages. The judgements are often valid for over ten years.

The result is that two times as many blacks have their power cut as whites. In an attempt to keep the power on and to pay the bills, many low-income families turn to high-interest lenders. Three times as many blacks as whites were found to use predatory lending services.

The disparity then turns to the police and courts, since low-income families do not have the resources to pay fines and tickets. What the ACLU found was that black citizens were stopped and ticketed at a higher rate than other races. In Ferguson, Missouri, 85 percent of the municipal court cases involved African Americans, although they only comprised 67 percent of the residents. They found that this was not just taking place in Ferguson.

The result is a constant cycle of poverty. Because of towering debt, 30 percent of blacks with an income of $50,000 to $85,000 said they faced shortages and could not pay a bill. To find this same 30 percent of white families that had the same trouble, you had to look at incomes below $25,000.

As long as the cycle of debt continues to keep black families from attaining wealth, there does not need to be overt racism to keep things biased; the current system does a good job of subtly keeping discrimination alive and well, and unless changes are made, it will continue to do so.

Source: FinancialJuneteenth.com

Date Posted: Tuesday, January 5th, 2016 , Total Page Views: 5641