Minorities feel sharper recession pain - report

Liberal think tank says recession hits African Americans and Hispanics at steeper rates, signaling economic structural problems.

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NEW YORK (CNNMoney.com) -- While the recession has affected the entire nation, members of minority groups have suffered more pain than their white counterparts, according to a report released Wednesday by a liberal think tank.

The report by the Center for American Progress says economic pain among non-whites is lasting longer than before and signaling structural problems such as labor market discrimination and credit market steering.

"This has been the longest recession since the 1930s and it's triggered the sharpest increase in unemployment to date," said Christian Weller, a senior fellow at the center and author of the report.

Because little to no headway was made to improve the inequalities between the economic experiences of whites and minorities in previous economic cycles, "efforts to end economic decline will have to especially help minorities since they have been disproportionately impacted by it," the report said.

Overall unemployment reached its highest level in 26 years in August, and the rate for minorities grew by more than the rate for whites, according to the report. Between the fourth quarter of 2007 and the second quarter of this year, African American unemployment climbed 4.2 percentage points annual rate and joblessness among Hispanics rose at 4.1 percentage points per year, while the rate among whites increased 2.8 percentage points annually.

The rates remained notably higher among educated minority workers, too. The unemployment rate for African American college graduates grew by 2.4 percentage points more than it did for white college graduates, and by 0.4 percentage point more for Hispanic college graduates.

The disparity isn't unusual. During the recession lasting between March 2001 and November 2001, unemployment rates also rose at a sharper rate for all minorities, and the increases lasted longer for African Americans, the report said. While unemployment rates fell for whites and Hispanics after June 2003, they continued to rise for African Americans for four months longer.

"Policymakers in Congress and the Bush administration chose to ignore the economy and the weak labor market recovery after 2001, especially in the African American community, who saw employment gains at the end of the 1990s" Weller said. "The Bush administration's answer to all economic problems was that it passed massive tax cuts, and our message now is that we need a more targeted recovery plan this time."

Between 2007 and the full recession year of 2008, the center said median family income for whites fell 2.7%, while it dropped for African Americans at rate of 2.9% and at a 5.8% rate for Hispanics.

The report said the income gap between white families and African-American families increased by nearly $500 a year into recession to nearly $22,000.

While the government has poured millions to create jobs and spur economic growth, the center said more stimulus funds are needed to benefit minority groups, who will continue to be out of work.

"At this point, [the funds are] already in the pipeline, so it's a matter of making sure they get out quickly," Weller said, adding that job creation alone will not level the playing field in the current climate. "We have to make sure minority communities can participate in the programs."

Since the stimulus plan is designed to create some jobs in the construction and manufacturing industries requiring substantial skill levels, Weller says Congress must ensure that job training programs are available to minorities so that "all communicates can share in the stimulus that's still coming."  To top of page

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