Tag Archives: Income Inequality

“Mississippi With Snow.”

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During television coverage of the recent protests in Minneapolis, the head of the NAACP referred to Minnesota as “Mississippi with snow.” As a proud resident of Minnesota who has long tried to address the racism in our state, that was still difficult to hear. But it is an alarmingly accurate description. Despite the economic success of Minnesota (it’s home to numerous Fortune 500 headquarters) and our widely acclaimed creativity (in music, theater, advertising, graphic arts, culinary arts and more), the primary differences between the two states are that we have a harsher climate, fewer people of color and a different accent.

Once a bastion of Scandinavian-style liberalism and tolerance, Minnesota changed under the leadership of GOP governor Tim Pawlenty. It cut taxes and passed laws that rewarded the wealthiest Minnesotans while punishing the poorest. That punishment was felt most by Minnesotans of color.

In 2008, the population of Minnesota was just 4.6 percent black compared to 12.8 percent for the US as a whole. Similarly, the Latino population in Minnesota was just 4.1 percent versus 15.4 percent for the US. Yet, black people living in Minneapolis (there are precious few outside the Twin Cities) are nearly 6 times more likely to be poor than their white counterparts. A black college graduate in the state, on average, makes less than a white high school dropout.

In 2009, at the height of the Great Recession, the unemployment rate for black Minnesotans was 22.5 percent compared to 15.5 percent for Latinos and just 7.1 percent for whites. Again, in 2010, Minnesota ranked second in the nation for racial disparity in the jobless rate behind only Mississippi. Even in 2018, before the pandemic, when black unemployment was at a record low of 6.8 percent, black unemployment in Minnesota was nearly double the US average.

Nationally, for every $1.00 of income white households receive, Latino households receive 72 cents, and black households earn just 59 cents. For every $1.00 of wealth held by white families, Latino families have 12 cents, and black families have 10 cents! And one-third of black children live in poverty, compared to 12 percent of white children.

Police in Minnesota and elsewhere kill blacks at an alarming rate compared to whites. Each killing leads to mental health issues for most of the black population. And it’s not just police killing black people. Discrimination is literally killing blacks because they are less likely to be able to afford healthcare. (A fact that has been especially apparent with the impact of the pandemic on people of color.)

Moreover, people of color not only suffer from disparities in employment, income, wealth, healthcare, and opportunity. They suffer from disparities in education, policing, and voting.

In Minnesota schools are some of the most segregated in the US. Why? Because Minnesota was an early adopter of charter schools. And Minnesota law exempts charter schools from desegregation. Public schools are also highly segregated with many predominately black schools underfunded, which has resulted in a large achievement gap between blacks and whites.

Minnesota is not alone. The US spends $23 billion more on schools that serve predominately white students versus schools that serve predominately black and Latino students. Blacks, Latinos and Native Americans are expelled from schools at a higher rate than whites for the same transgressions. Too often, that leads to participation in the “justice” system and eventually to incarceration. Once they’re in the system, they find it hard to escape.

Per capita, blacks are 2.8 times more likely to be killed by police than white people. And believe it or not, Native Americans fair even worse. They are 3.1 times more likely to be killed by police than whites. Native Americans make up 0.8 percent of the population. But they experience 1.9 percent of all police killings. Many Native Americans live in poverty with no access to clean water. And many of their children are sent to outdate, mold-infested schools. Moreover, in an age of technology, many Native Americans have none. They not only lack high-speed Internet (a growing requirement for education). Many lack phone service.

And, if you think people of color can create change by voting, think again. A recent study by the Brennan Center for Justice found that black voters stand in lines 45 percent longer than white people. Latinos wait 46 percent longer than whites. And many Native Americans are unable to vote at all because some states require a street address, which most reservations lack. As a result of GOP voter suppression tactics, the situation is getting worse as evidenced in Georgia. Is it any wonder then that there are only 3 US senators who are black?

Now, following the murder of George Floyd, Minnesota has a real opportunity to make systemic change. As it has in many other ways, it can lead the nation. It can create an environment of justice and equal treatment for people of all colors and backgrounds. It can make its immodest slogan “Minnesota Nice” truly mean something.

Remembering The Greatest Economic Crash In History.

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Looking back at the market crash of 2008, it’s difficult to believe that it represented a greater loss of stock and home equity than any previous crash in American history. Though we may be impatient for a full recovery of jobs and middle class incomes, we should take a few moments to recognize that the quick action by Congress and the Federal Reserve did, in fact, work. The same can be said for President Obama’s automotive bailouts and economic stimulus which were opposed and derided by Teapublicans.

So you have not yet been able to find the job you want? Or you feel that you are being undervalued and underpaid? Your frustration is understandable. But, when compared to the aftermath of lesser crashes, it could have been a whole lot worse. We were not relegated to soup lines and work camps as our parents and grandparents were following the stock market crash of 1929. But had President Obama not ignored the Teapublicans’ call for austerity measures, we well might have been.

To fully appreciate what I mean, you need to look at the extent of the losses in 2008.

The Dow Jones Industrials lost 778 points in one day – the greatest single day loss in history. It’s estimated that the market crash resulted in a $1.2 trillion loss of market equity. Looking at it another way, the Dow lost 33.8 percent for the full year – surpassed only by the bear markets of 1907 and 1931. Further, GDP contracted for more than a year. Unemployment rose from 5 percent to 10 percent before it began to drop. According to Zillow.com, $3.3 trillion in home equity was stripped from homeowners in 2008 as home values fell by 30 percent. Income levels fell, causing the net worth of households and non-profit organizations to fall by roughly $15 trillion. And the impact of the crash on retirement funds is virtually immeasurable. Indeed, those who were nearing retirement may never fully recover the money lost in their IRAs, 401ks and their defined benefit pension funds.

Despite all of that, our economy recovered remarkably quickly. If you don’t believe me, just look at the economies of many other advanced nations that are struggling with stagnation who mistakenly followed the advice of conservatives. By contrast, the GDP of the US is growing, our deficits have fallen at a dramatic rate and our national debt is now less than 3 percent of our GDP – and it would be much lower if Teapublicans hadn’t fought to give more tax breaks to corporations and the one percent. Certainly, income inequality is skyrocketing, but it was expanding long before the crash as a result of the Bush tax cuts. Yet rather than do something to address the issue, the GOP-led Congress has, instead, voted to eliminate estate taxes for the wealthiest 5,000 families in America!

Remember that the next time you hear someone claim that the GOP is the party of fiscal responsibility. It was GOP policies that led to the Great Recession. And, once again, it was Democratic leadership that led us out of it.

Falling Behind Russia.

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For those Americans who still consider Russia a rival of the US, I have bad news. We have fallen behind the Great Russian Bear in one important economic category: Russia is one of the few nations on the planet with more economic disparity than ours.

In the US, the top one percent own 40 percent of the nation’s wealth, while the bottom 80 percent own just 7 percent. But in Russia, just 110 people own 35 percent of the nation’s wealth! According to a report by Credit Suisse, “Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires.”

Damn those Russians! We used to be number one!

Of course, this means our greedy billionaires will need to step up their game. We know they’re trying. The Koch brothers funded the government shutdown over “Obamacare” in order to maintain the status quo. Wall Street, the health care industry, and defense contractors have increased their lobbying groups in Washington. And the US Supreme Court is currently hearing a court case that may allow the obscenely wealthy to better purchase politicians and political favors under the guise of free speech.

But even that may not be enough. So the bought-and-paid-for Teapublicans are working overtime to privatize Social Security, Medicare, our military, prisons, schools and every other institution in the US. The claim is that this will make the institutions run more efficiently and more cheaply. But, in reality, privatization merely makes these institutions less responsive while adding to their costs and the corporations’ bottom lines.

But who are the poor and the middle class to complain? This is about national pride. We’re exceptional!  We have to be number one. USA! USA! USA!