[Closing The Gap, Part 3] How the employment gap drives the wealth gap

Disparities between white and non-white Oklahomans’ access to generative assets, which refer to income a person earns through paid employment, are wide and stubbornly persistent.  Previous posts in this running series, Closing the Opportunity Gap: Building Equity in Oklahoma, explored historical roots of the gap and detailed disparities in foundational assets, e.g. health.  This post turns to a second core area, generative assets, which measure access to opportunities to maintain stable employment and earn income.  

Oklahoma is frequently hailed as a haven of low unemployment and widely available economic opportunity. This is far less true for people of color and residents of rural counties who have long faced significant barriers to employment.  The employment situation for Native Americans and African Americans in Oklahoma is particularly bleak.  Between 2007 and 2010, the national Native unemployment rate rose 7.7 percentage points, nearly double the increase in White unemployment during that same period.  African-American workers in Oklahoma were unemployed at more than twice the rate (11.8 percent) of white workers (5.0 percent) in 2011.

African-American workers also stay unemployed longer than White workers.  Black workers were jobless on average for six weeks longer than white workers in 2011.  Even before the recent recession, Oklahoma ranked 2nd in 2004 and 1st in 2007 in average length of black unemployment out of all the states.  A gap in the duration of unemployment is particularly insidious because of the dampening effect long-term joblessness has on employment prospects. The rate at which the long-term unemployed find jobs compared to their newly jobless counterparts drops steadily from week to week and hiring discrimination against the unemployed is well-documented and widespread.

cocThe employment gap clearly contributes to the income gap.  White Oklahomans earn nearly twice as much income per capita as their minority counterparts and the gap is growing. Between 2007 and 2009, predominately white census tracts in Oklahoma averaged a per capita income of $26,262 while communities of color averaged a per capita income of about half that, $13,662.31.  Even among those who found full employment between 2008 and 2010, White workers earned higher median incomes than every other worker.  

Unemployment and insufficient income can cripple a household’s ability to make ends meet and slowly erode their quality of life.  Despite decades of improvement in social, political, and economic status, African American and Native American residents are still unemployed at twice the rate of their white counterparts, a ratio that for African American workers hasn’t changed since the 1940s. 

Without sufficient employment and income, an individual is not able to save, invest, or purchase assets.  Thus generative assets are a prerequisite to the third core asset area, regenerative assets.  The next post in this series will discuss gaps in regenerative assets (i.e. savings, investment, and homeownership) which have appreciative value and earn long-term interest, providing families with a crucial savings cushion and the ability to achieve economic security over their lifetimes. For the full :Closing the Opportunity Gap” issue brief on which these posts are based, as well as related presentations, click here.


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