Economic Insecurity was rising before Covid-19

Economic Insecurity was rising before Covid-19

The number of Louisiana households with incomes above the poverty line – but below a basic survival threshold – has climbed steadily since 2007. That’s according to the latest version of the ALICE report, produced by the Louisiana Association of United Ways and released on Thursday. It found that more than 500,000 families were one emergency away from financial ruin, based on 2018 data that does not account for hardships brought on by the Covid-19 pandemic. Ken Stickney of Nola.com | The Baton Rouge Advocate has the story:

United Way researchers said most affected families include senior citizens, Black families and households headed by single mothers. In fact, the ALICE report data suggest that those families operating within ALICE standards have increased from 23% to 33% over the past decade. The study said that over the past decade, even as unemployment fell, the number of low-wage jobs have almost doubled.

The American Dream while Black
Ebony Jones, a single mother of two with a good financial history, inherited a fully paid home from her grandfather. She thought it would be easy to get a home equity loan to make some repairs on the house. But when lenders learned of her ZIP code and marital status, everything changed. The legacy of America’s long history of racial redlining and discriminatory housing policies continues to put obstacles in front of people of color, like Ebony, looking to build wealth through homeownership. A new report by Nigel Chiwaya and Janell Ross of NBC News analyzes how ongoing discrimination in the housing market continues to cut many Black Americans off from their share of America’s wealth:

Advocates, scholars and officials say one of the clearest examples of that ongoing discrimination exists in the housing market, where the gap in homeownership rates between Black and white Americans is wider than it was before the Civil Rights movement. Seventy-six percent of white households owned their homes at the end of the second quarter of 2020, compared to just 47 percent of Black households, according to the Census Bureau. That 29-percentage-point gap, perpetuated by decades of housing and economic policies favorable toward white buyers and designed to exclude Black buyers, has only been exacerbated by the pandemic and before it the 2008 financial crisis. Homeownership is the prime driver of America’s ongoing wealth gap.

The pre-Covid Underemployment Crisis
The Covid-19 pandemic has left millions of people unemployed and struggling to make ends meet. Unfortunately, underemployment was a looming crisis before the pandemic struck. A new report by the Center for Law and Social Policy (CLASP) shows that part-time work and lack of hours was more common than statistics previously reported. This problem will only increase because of the pandemic. The Atlantic’s Annie Lowery has the story:  

The CLASP data point is one of many indicating that American families’ finances were precarious before the virus hit, even as the jobless rate sank to its lowest point in a half century. The unemployment rate for Black workers, for instance, was roughly twice as high as that for white workers, and particularly high for young Black workers. As many as 42 percent of recent college graduates were working in positions that did not require their degree shortly before the recession began. Wage growth remained stubbornly slow. And, we now know, roughly one in 10 workers wanted to be logging more hours than they were.

Student debt crisis for Black students
The post-Covid economic recovery will depend largely on getting more young people to complete post-secondary education or certificate training. But growing levels of student debt are getting in the way of states’ ability to make progress on this goal. Black students in particular are finding it increasingly hard to obtain a college certificate or degree. Alan Richard of the Southern Regional Education Board reports on this unfolding crisis and some potential solutions:  

Roughly one-fourth of Black Americans cannot pay down their college loans, said Victoria Jackson, a senior higher education policy analyst for The Education Trust. One major reason is that funding for the federal Pell Grant program has not kept pace with tuition increases across the country, she said. State colleges and universities that serve the most Black students get short shrift in state budgets — just as states need more students of color to earn every type of degree, said Tiffany Jones, Education Trust’s senior director of higher education policy.

Reminder: LBP is Hiring!
The Louisiana Budget Project is hiring, and we need your help to spread the word. We are looking for diverse candidates committed to LBP’s mission and vision for shared prosperity for all Louisianans. Please read below to learn more. LBP is committed to racial equity and inclusion in its policy advocacy, hiring practices and workplace environment. Click here to learn about the Policy Analyst position, and here to learn about the Advocacy Manager position. The application period closes Aug. 10. 

Number of the Day
403,000 – The number of Louisiana’s children living in households that are behind on rent or mortgage and/or didn’t get enough to eat. This is 37% of all children in the state and the highest portion of any state. (Source: Center on Budget and Policy Priorities)