Race and Economics

It is said one has to get outside of Washington DC to get a proper perspective on the nation’s problems, but the nation’s capital provides plenty of insight into the challenges facing this country. Washington DC, like the country as a whole, is currently on a path of increasing division and inequality. The DC Fiscal Policy Institute notes that in Washington DC the average household income for the richest fifth increased by 81% or $78,900 from 1980 to 2006. For the middle fifth there was an increase of 31% or $11,000 and for the poorest fifth only a 3% increase equaling $400. In over 25 years, the richest of DC increased their household income by almost $80,000, while the poorest saw their increase disappear by spending an extra dollar a day over one year. Similarly, from 1980 to 2005 over 80% of the total increase in all of America’s income went to the top 1 percent.

This growing economic inequality has strengthened racial and class divisions throughout the country, creating new dynamics in the defacto segregation that still exist in Washington DC and many of the country’s urban centers. The new trend in the ongoing segregation of America is the urbanization of upper income whites and the suburbanization of the working class and disenfranchised minorities. The new trend is reversing the segregationist trends of the latter half of the 20th century..

In the early years of post World War II America, there was a second great migration of African Americans to urban centers in pursuit of employment. This was accompanied with a “white flight” to suburbia. This “white flight” was subsidized by federal dollars that expanded the country’s highway system and provided mass housing subsidies to veterans, greatly increasing white homeownership. Black veterans attempted to take advantage of the government housing subsidies. However, lack of wealth, legal racial discrimination and violent resistance to integration limited African American housing choices and opportunities. Due to the increasing urbanization of Blacks and the suburbanization of whites, Washington DC, who had a substantial African American population since the 1800’s, became one of the first major American cities with a Black majority by the late 1950’s. The increased proportion of Blacks in major urban areas and the suburbanization of whites continued for decades all around the country.

The Black population in cities reached its peak as manufacturing jobs that served as a ladder to the middle class greatly declined. By the 1980’s, urban centers, that were considered places of opportunity and upward class mobility, were transformed into the inner cities, the home of the permanent underclass. The call for urban renewal and diversifying the tax base set in motion urban policies that focused on attracting wealthier and most often white residents instead of strengthening low to middle income housing. By the 1990’s and 2000’s the urban poor, were being priced out of the cities they had lived in, looking to cheaper suburbs with the hope of finding a safer environment and better schools. For middle income whites and whites who did not move back to urban centers, another white flight occurred to more distant suburbs.

For over the last 30 years the African American population in Washington DC has declined from 70% of the population to 53% of the population while the white population has increased from 27% to almost 40%. Washington DC, like the rest of the country, has also seen a rise in the Latino population that is now 8.8% of the population. Yet the increasing difficulty of finding affordable housing in Washington DC appears to be slowing the rise of the Latino population as it diminishes the presence of African Americans. Between 2000 and 2007 the increase of Washington Latinos (9%) was a third of the rate of increase in Latinos nationwide (29%) and a fourth of the rate of increase Latinos saw in Washington during the 90’s (37%). Urban renewal in Washington DC that focuses on creating space for upper income residents has become urban removal for African Americans and inhibits working class and poor Americans of all ethnicities from making the nation’s capital their home.

This shrinking of space and opportunity for middle and working class Americans is a national phenomenon at the root of much of the populist surge occurring throughout different communities. In 2006 the American electorate voted out Republicans for the jobless “recovery” of the 2000’s and a never-ending war in Iraq and Afghanistan. Now, in 2010, the Democrats have been voted out for a job loss “recovery” while the country continues to spend hundreds of billions in Iraq and Afghanistan. This most recent action to “get the bums out” is most often connected to the largely white populist movement of the Tea Party, yet the city of Washington DC has also had its own populist revolt led largely by African Americans. The Washington DC electoral uprising ousted the sitting mayor, Adrian Fenty, who seemed removed from and hostile to the everyday struggles of the average Washingtonian.

People of all races are tired with politics and economics as usual. The American people have shown the willingness to vote the “bums out” but the problem is the policies that reward the elite, weaken the middle class, and increase the disfranchisement of the poor persist. State and city jurisdictions across the country are facing mass cuts in housing, education, and other social services that provide opportunities for middle and working class families. The newly elected congressional Republican majority, who proclaim to care about the federal deficit and working class people, has made its top priority to permanently extend the Bush tax cuts which will cost 4 trillion dollars over the next ten years and will disproportionately reward the richest Americans. This is a prescription to continue the worst of contemporary Republican politics, express concern about the deficit and working Americans while enacting policies that increase the deficit and decrease opportunities for middle class and poorer Americans. The new Republican majority in Congress is driven to further concentrate the wealth of the nation into the hands of the wealthiest, to cut government investment into working families, and to drive the country into greater economic unsustainability.

In 2008 there was a great national sentiment of hope that the nation could make a positive, progressive change. Today the country seems set on partisan battles as the economy for the average American continues to be mired in recession. The best hope I see for the country and it’s cities, like Washington DC, is that sooner rather than latter the electorate recognizes that changing politicians isn’t a change we can believe in, rather the country must radically change the trickle down, deregulated economy which has maintained racial divisions and increased economic inequality.

DEDRICK MUHAMMAD is a Senior Organizer and Research Associate for the Institute of Policy Studies.


Dedrick Asante-Muhammad is host of the Race and Wealth Podcast and Director of the Racial Wealth Divide Initiative at the Corporation for Economic Development.