The Washington Post

Recession causes wealth gap to widen, unemployed to stay that way

A job seeker looks at a bulletin at a job resource center in Richardson, Texas, on July 5. (LM Otero/ASSOCIATED PRESS)

As if that weren’t enough.

A study by the Pew Research Center released Tuesday shows that the ecoonomic downturn has caused the wealth gaps between whites and minorities to grow wider than they have been in a quarter-century.

A New York Times story published Monday found that employers are now excluding the unemployed from their applicant pool.

Both reports are bad news. But the wealth gap findings are alarming in that they suggest that the economic downturn could have erased 25 years of progress.

Wealth gap widens between whites, minorities

On average, the study found, whites have been left with 20 times the net worth of blacks and 18 times that of Hispanics after the recession.

The discrepancy is explained in part by the fact that many whites derive their wealth from stocks and retirement accounts, while minority families are mostly invested in their homes and have seen the housing market fall out from under them.

The white-black wealth gap is now the widest since the Census began tracking such data in 1984, when the ratio was roughly 12 to 1.

“I am afraid that this pushes us back to what the Kerner Commission characterized as ‘two societies, separate and unequal,’ ” Roderick Harrison, a former chief of racial statistics at the Census Bureau, told the Associated Press. Harison was referring to the 1960s presidential commission that examined U.S. race relations.

“The great difference is that the second society has now become both black and Hispanic,” he said.

Unemployed may stay that way

The Times story shares troubling news for another group of people that could be affected long-term: the unemployed.

Employers are now looking solely for applicants who are already employed, and it’s happening across all skill levels and a variety of industries, including “hotel concierges, restaurant managers, teachers, I.T. specialists, business analysts, sales directors, account executives, orthopedics device salesmen, auditors and air-conditioning technicians.”

The Times calls it “particularly cruel” in this downturn, in which some 14 million people have been unemployed “long-term,” with an average of nine months out of work.

New Jersey has dealt with the problem by making it illegal for employers to explicitly discourage the long-term unemployed from applying for jobs. While other states are considering the action, New York Magazine says a broader legal claim is “unlikely.” In part, that’s because employers can argue that the skills of those who have been out of work long-term may have gotten rusty.


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