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Economy poll: African Americans, Hispanics were hit hardest but are most optimistic

By Michael A. Fletcher and Jon Cohen
Washington Post Staff Writers
Sunday, February 20, 2011; 12:03 AM

Despite severe losses during the recession, the majority of African Americans see the economy improving and are confident that their financial prospects will improve soon.

That optimism, shared to a lesser degree by Hispanics, stands in stark contrast to the deeper pessimism expressed by a majority of whites. In general, whites are more satisfied with their personal financial situations but also more sour about the nation's economic prospects.

Those are among the findings of a new Washington Post-Kaiser Family Foundation-Harvard University poll that probed attitudes in the wake of a downturn that more than doubled unemployment and wiped away nearly a fifth of Americans' net worth.

African Americans and Hispanics were more likely to be left broke, jobless and concerned that they lack the skills needed to shape their economic futures. But they also remained the most hopeful that the economy would soon right itself and allow them to prosper.

"Things are stuck in place right now," said Faye Brown, an African American retiree from Detroit who said she has burned through her savings and watched the value of her home erode by $24,000 during the downturn. "But the newer generation - the technology generation - is going to make things better."

Similarly, McKinney Love, a 48-year-old home health-care worker from Detroit, said: "I see improvement. I was just reading on the news last night that unemployment here - instead of being 600,000 people applying, there was only 400,000. That speaks for itself."

Nearly four in 10 African Americans said they adjusted their housing situations in the past three years to cope with the crisis. Nearly one in three borrowed money from friends or relatives to get by. More than a quarter lost their health insurance coverage or other benefits in the past year.

Though African Americans overall have been severely hurt by the recession, Hispanics reported being hit even harder. Nearly four in 10 said their households have suffered job losses.

Among employed Hispanics, nearly four in 10 say their families would be in real financial trouble within one month if their paychecks stopped.

The fresh wave of insecurity has reversed years of Hispanic economic progress in which homeownership and employment rates rose and poverty rates generally decreased.

A third of working Hispanics - more than in any other group - felt insecure in their jobs. Nearly one-third said they lost their health insurance or other benefits. And Hispanics were the most likely to be "underemployed," either jobless or eager to work more than they do.

Denise Miller, 28, has been looking for full-time work as a teacher in El Paso.

"With all the cutbacks, it is hard to find a job," said Miller, a Hispanic mother of two. "I'm substituting, but I'd rather have a full-time job."

Despite the setbacks, Hispanics also remain optimistic. Two-thirds said people can still get ahead if they are willing to work hard. Just over half predicted that their family's financial situation will improve over the next year.

Whites less optimistic

Whites, also buffeted by the long recession, are the most resentful of government action and far less optimistic about what is ahead financially, both for their own families and for the country as whole.

"I think things are going to get worse before they get better. A lot of people are going to have to buckle down because we've got a generation now that doesn't work," said David Still, 54, a married, white father of two who works as an electrician in Sumter, S.C. "You got people who were brought up on state support and things like that. When you can get as much money sitting at home as working, you are going to do that."

Whites are also far less likely than blacks or Hispanics to think their children will be better off than they themselves are now. Whites also are most likely to say, "It will be a long time before the economy recovers."

And among those who have shifted their lifestyles over the course of the economic downturn, whites are the most likely to see those changes as permanent.

Most whites say the economic situation is a cause of stress in their lives, and half say they are frustrated.

While the stated stress level among African Americans is lower, some data show a heavier toll. The downturn obliterated years of African American economic progress- strides that were on shaky ground even before the recession. The share of black adults who were working slid to 52 percent, nearly seven points behind whites and Hispanics. In 2001, nearly 65 percent of white adults and just over 60 percent of blacks were employed.

Homeownership, which remains the primary engine of wealth creation for many Americans, has slipped among African Americans. The foreclosure crisis pushed the black homeownership rate down to 45 percent, far below the 74 percent rate for whites, and the lowest rate since 1997.

At the same time, some of the most reliable paths for blacks to ascend to the middle class are in danger of being narrowed.

Federal, state and local governments, which employ a disproportionate share of African Americans, are shedding jobs, a trend expected to continue in coming years. Meanwhile, the auto industry, long a bastion of high-paying, stable jobs that helped sustain many black middle-class families throughout the industrial Midwest, has been significantly downsized.

Still, a substantial majority of African Americans are bullish about the future. More than half say they are better off than their parents were at the same age, and six in 10 are confident that their children will be even more prosperous.

Blacks see some hope

Analysts who study black prosperity say the optimism is rooted in long experience with hard times. They say that now many African Americans sense attention to their struggles at the highest levels of government, something that was not evident before the recession.

Other surveys have found that African Americans were encouraged by the election of President Obama, whose policies to expand health-care coverage and increase education aid are likely to help them the most, given their past struggles.

"When you look at what has been going on in the African American community, it is not just that the recession was worse for them but also the previous business cycle was worse for them," said Christian E. Weller, a senior fellow at the Center for American Progress and a professor at the University of Massachusetts at Boston.

Wages, homeownership rates and employment levels all grew worse for African Americans between 2000 and 2007, a time in which the overall economy expanded.

Since then, things have gotten worse.

The Obama administration's $814 billion stimulus package is credited by many economists with preventing an even more severe downturn, yet black unemployment soared to its highest levels in a generation on Obama's watch. The black jobless rate stands at 15.7 percent, far higher than the overall rate of 9 percent. The jobless rate for Hispanics is 11.9 percent, and for whites it is 8 percent.

African Americans nonetheless are strongly supportive of Obama's economic policies, according to the new Post-Kaiser-Harvard survey. Nearly six in 10 said they think the president's actions are making the economy better.

"I think the Obama administration could do more to spur the economy," said Ken Pulliam, an African American from Charlotte who works in finance. "Going forward, this will prove difficult given the Republican House."

Pulliam defended Obama's stewardship of the job market, saying the economy has evolved in ways that make it difficult for low-skilled workers to prosper.

"Back during the Great Depression, there were a lot of jobs that could be filled with unskilled labor," Pulliam said. "Back then you could hire lots of people with shovels to dig a road. But today, you only need a few workers with specific skills in operating heavy machinery to build that same road. As a result, the stimulus hasn't been able to put a lot of unskilled labor back to work."

Asked whether the Obama administration is paying enough attention to the economic interests of African Americans, nearly two-thirds of black respondents said the government is doing "about the right amount."

Across a range of areas - including helping families, small businesses and working-class Americans - African Americans were far less likely than others to criticize the administration.

"The fact that he is the first black president does have a powerful impact on people's perception of their opportunities and the future," said Algernon Austin, director of the Race, Ethnicity and the Economy program for the Economic Policy Institute. "It is kind of hard to separate that from the other facts."

Who's to blame?

Sixty percent of whites placed "a lot" of blame with the federal government for the economic challenges facing the country. Fewer faulted Wall Street or overeager consumers.

Jim Karney, 69, a white San Antonio resident who runs a small refurbishing business, has lost faith in Washington. After surviving the recession, he said he is now bearing the brunt of surging energy and material costs.

"The prices of the materials I use in my business are going up," he said. "I blame Congress for this 150 percent. This economy was their creation.

"The 535 people in Washington, D.C., created this. There is an incestuous collusion of Congress, Wall Street and lobbyists."

Whites - who are far more likely to identify as Republicans than Hispanics and African Americans - were also the most critical of the Obama administration's performance on the economy.

Most whites said the Obama administration is doing "too little" for their families and not enough for the middle class, working-class Americans and small businesses. They were about twice as likely as were African Americans and Hispanics to say the administration is doing "too much" for Wall Street financial institutions.

By a 2 to 1 margin, whites saw the president's economic program as harming the struggling national economy. By contrast, Hispanics were nearly 3 to 1 the other way, and African Americans overwhelmingly said they think Obama's plan is improving the economy.

Whites sided with the GOP over the Democratic Party by an 11-point margin when it comes to identifying the party that better understands people's economic concerns. Democrats had a 27-point advantage among Hispanics, and that swelled to a 60-point lead among African Americans.

The poll was conducted by telephone from Jan. 27 to Feb. 9 among a random national sample of 1,959 adults. The margin of sampling error for the African American and Hispanic samples is plus or minus six percentage points; it is four points for the sample of white respondents.

fletcherm@washpost.com cohenj@washpost.com

Polling manager Peyton Craighill and staff writer Krissah Thompson contributed to this report.

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