African Americans in Memphis hit hardest by recession

By Kontji Anthony - bio | email

MEMPHIS, TN (WMC-TV) - The economic crisis hit the Mid-South hard, and no one may be suffering more than African Americans in the area.

The New York Times reported black unemployment in Memphis doubled to 16.9 percent over the last two years.  That rate is three times higher than the unemployment rate for white Memphians.  They also reported that for every one dollar a white family owns, black families own 16 cents.

While white wealth dipped 34 percent in this recession, black wealth dropped three times faster.

Economist John Gnuschke knows why African American families are hit hard.

"Recession hits first-generation households the hardest," Gnuschke said.

He said in the 1990s, African Americans pursued the American dream by working hard, buying property and putting their children through school.  Then the recession hit.

"By the time they buy their car and their house and put their kids through school, that's as much money as they can make," Gnuschke said.  "They don't have time to generate wealth."

Gnuschke said first-generation families have nothing to fall back on.  They are not investing in the stock market and if they lose their job, they lose their homes.

"Since the mid-90s, there's been virtually no job creation in Memphis," Gnuschke said.

The New York Times used Memphis for the article because it demonstrates how the rising unemployment combined with the growing foreclosures of this recession turned back the clock on black wealth two decades.

A study commissioned by the paper shows black home ownership has dropped lower than the 1990s.

Gnuschke said there is only one way out of this.

"You've got to spend all of your time trying to create jobs and generate jobs," Gnuschke said.

Gnuschke described Memphis as a trickle down city, meaning the economic recovery will start in the bigger cities and rebound in Memphis might take longer.  He also sees Memphis as a magnet city, drawing talent from the entire Delta.

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