Senator releases report examining causes of the wealth gap.
WASHINGTON – United States Senator Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, held a roundtable Wednesday focused on finding solutions and best practices for closing the racial wealth gap. Sen. Landrieu also released a committee report that takes a snapshot of what the current wealth gap looks like and what may be contributing to it.
Between 1983 and 2011, the median net worth among white families rose 36 percent. Over that same time, the median net worth among African-American families rose only 5 percent, while the median net worth among Hispanic families actually dropped by 7 percent.
Sen. Landrieu was joined at the roundtable by Reps. Cedric Richmond, D-La., and Sheila Jackson-Lee, D-Texas.
“Fifty years ago, America engaged in a war on poverty that was aimed, in large part, at closing the economic gap between whites and minorities,” Sen. Landrieu said. “Since that time, we have made great strides in a number of areas. The gaps between whites and minorities in income and education have closed. This is good news, and we should be proud of this achievement. Yet, data tells us that this progress has not translated into the closing of the wealth gap.
“Closing that wealth gap is a challenge we must meet for America to compete effectively in the 21st century global economy. We need all, not two-thirds, of our workers, entrepreneurs and businesses playing on the field and not standing on the sidelines.”
The key question Sen. Landrieu and the participants focused on during the roundtable was “what are we doing wrong in regards to solving the wealth gap issue and why isn’t the wealth gap decreasing like other areas, such as income and high school completion?”
The report released by the committee focused on several issues that contribute to the existence of the wealth gap, including:
- Homeownership: For most American families, their most valuable asset is their home. In 2004, 76 percent of Caucasians, 60 percent of Asians, and fewer than 50 percent of African-Americans and Hispanics owned a home.
- Education: According to the Consumer Financial Protection Bureau, a significant amount of student debt can limit the ability to open a small business. The Department of Education found that the median and average student debt levels vary by demographic. In 2007-08, African-Americans took out the highest amount of student loan debt.
- Lending Inequalities: According to Dr. Robert Fairlie, Professor of Economics at the University of California at Santa Cru, minorities face lender discrimination, which in turn impacts their ability to open or expand a small firm as well as attain wealth. In fact, SBA’s Office of Advocacy found the fear of loan application rejection to be higher amongst minorities than Caucasians. In 2010, 15.2 percent of Caucasians did not apply for a small business loan due to fear, compared to 38.8 percent of African-Americans and Hispanics. This trend also existed along gender lines, with 21.1 percent of women not applying compared to 17.8 percent of men.
Sen. Landrieu also sent a letter to 100 mayors throughout America to ask for their ideas and suggestions for best practices and solutions to meeting the challenge of closing the wealth gap. Sen. Landrieu will take the responses from the mayors, as well as input from those who participated in the roundtable and other key stakeholders and release a follow-up report next year. That report will detail the solutions, initiatives and programs needed to meet the challenge of closing the wealth gap.
Yesterday, Sen. Landrieu met with Marc Morial, President of the National Urban League and Rep. Gregory Meeks, D-N.Y., to discuss the wealth gap during her visit to the Congressional Black Caucus’s (CBC) Annual Legislative Conference. Morial and Rep. Meeks hosted a panel discussion today at the CBC conference to discuss the racial wealth gap.
“My work on the wealth gap will not end with the report or the roundtable,” Sen. Landrieu said. “My committee will continue working on this throughout the next year, so that we can figure out the best ways to provide more opportunities for American families to have the necessary tools to move upward economically into the mainstream and onto the playing field.”
Participating in yesterday’s roundtable were Member of The Collaborative Group in New Orleans Barbara Major, Economist for The Urban Institute Dr. Signe-Mary McKernan, Associate Director of Research for Hispanic Trends at Pew Research Center Dr. Rakesh Kochhar, Associate Administrator for the Office of Business Development at the U.S. Small Business Administration Darryl K. Hairston, Special Secretary of Minority Affairs in the Office of Minority Affairs for the Maryland Governor’s Office Zenita Wickham Hurley, Esq., Vice President of Operations for U.S. Black Chambers, Inc. Toya Powell, President and CEO of the Association for Enterprise Opportunity Connie Evans, Executive Director of the National Coalition for Asian Pacific American Community Development Lisa Hasegawa, Forest County Potawatomi Community Tribal Member and Chairman of the Board of the Potawatomi Business Development Corporation Kevin Allis, Managing Partner of Delta Decisions of DC, LLC Dr. Shree Taylor, and President of RCI Technologies, Inc. Anisa Balwani.
Click here to watch a video of the roundtable.
Click here to see a copy of the wealth gap report.
CREDIT: Senate Committee on Small Business and Entrepreneurship.