African-Americans are more optimistic about their financial outlook next year than the general population is, even though they say they’re struggling more with credit card debt, according to a new poll released Thursday.
In the poll, conducted for radio/television commentator and author Tavis Smiley’s annual State of the Black Union symposium Saturday in Los Angeles, 58 percent of African-Americans said they expect their household financial situation to improve next year, while only 30 percent of the general population thinks that. The survey had a margin of error of plus or minus 4 percentage points.
Only 16 percent of African-Americans believed their financial situation would worsen next year, while 29 percent of the general population anticipates an economically harsher 2010.
The optimistic outlook of African-Americans surprised Smiley, several economists and housing experts, who all wondered how it could be: African-Americans are bearing the brunt of the job cuts and home foreclosures that are resulting from the national recession. Some think the optimism is rooted in pride and confidence in President Barack Obama, the nation’s first African-American president.
“One would expect the statistics would be reversed if people were reflecting the actual statistics of their finances,” said Roderick Harrison, an academic who specializes in labor markets at Howard University, a historically black college in Washington, D.C. “Typically, African-American income has declined in comparison to that of other groups and is slower to recover.”
African-American optimism, however, was tempered when it comes to current financial circumstances. Thirty-eight percent of African-Americans said that they’re struggling with credit card debt, while 32 percent of the general population said the same.
Analysts say the double-whammy of rising African-American unemployment and the housing crisis is rapidly eroding African-American wealth.
When it comes to mortgages or rent, 24 percent of African-Americans said paying them was the most important household goal, compared with 32 percent of the general population. Meeting monthly expenses was the main household priority for 35 percent of African-Americans, versus 32 percent of the general population.
The unemployment rate last month for African-Americans was 12.6 percent, up from 11.9 percent in December, according to the Bureau of Labor Statistics. Unemployment among whites was 6.9 percent last month, up from 6.6 percent in December. Total January unemployment was 7.6 percent.
Home foreclosures aren’t tracked nationally by race or ethnicity, but a 2006 study by the National Community Reinvestment Coalition found that almost 55 percent of home loans to African-Americans were on high-risk, high-cost terms.
The percentage of African-Americans who own their own homes dropped from 49.1 percent to 46.8 percent from the fourth quarter of 2004 to the fourth quarter of 2008, according to the coalition, which is an association of 600 local development organizations nationwide.
“It’s hurting African-Americans substantially,” said Jim Carr, the chief operating officer for the coalition. “You see it in black neighborhoods across America, and you see it in areas that, for the most part, have been shielded from the foreclosure crisis.”
A report last year by United for a Fair Economy, a group that examines wealth disparity, estimated that the subprime mortgage crisis will cause African-Americans to lose from $73 billion to $93 billion in wealth.
The group’s 2009 follow-up report says that while the nation as a whole has been in a recession since December 2007, communities of color have been in a recession for five years.
Given the stark statistics, African-Americans should be anything but rosy about their immediate financial future, according to Smiley. In his new book, “Accountable: Making America as Good as Its Promise,” he urges African-Americans to hold elected officials _ including Obama _ accountable for what they promised on the campaign trail.
“It’s an odd duality,” Smiley said of the African-American economic view. “The poll underscores that African-Americans believe one thing and do something else, and there has to be a conversation about that.
“People are hopeful about the future,” Smiley added. “A lot of that has to do with Barack Obama. But hope needs help.”
In a separate but related poll, almost 75 percent of African-Americans in the South said that Obama would help America rid itself of racial prejudice, according to an 11-state Winthrop University/ETV survey. Winthrop is a liberal-arts college in Rock Hill, S.C.
Most Southern blacks also said the historic 2008 presidential election made it easier to talk about race. Thirty days into his administration, Southern African-Americans are Obama’s greatest fans, giving the president a 90 percent approval rating, even as they watch the national economy crumble.
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