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American American Financial Issues Essay

1185 words - 5 pages

Blair, Lauri
Journal #3
African-American Consumers and the Economic
March 30, 2010

1) Create a detailed consumer profile of the average African-American household. Find the average income, wealth, and primary purchases of the African-American household. Compare and contrast the consumption pattern of the African-American with European, Asian, and Hispanic Americans.
African-American household
Average income- $37,150
Wealth- $6,000

White Household
Average income- $55,463
Wealth- $88,000

Comparing African American households to European, Asian and Hispanic Americans, African Americans have the lowest income. Second of all, in response to a lower income ...view middle of the document...

The current economic status of African American households has been consistent since 2000, when African-Americans first entered a depression. The current recession just added to the steady loss and low income. African-American households in the 2008 census were found to have an average income of $34,218, and in 2003, $37,150.

African American Budget Line
x-axis: Clothing
y-axis: Rent
Hampton Area more African Americans average $500-$650
Rent: $6900
Clothing: $4200
Budget: $34,537

3) Illustrate and explain with specific data what has happened to the average African-American household as a result of the foreclosure crisis, the financial crisis and the current recession. Be sure to back up your graphical analysis with researched facts about how these events have affected African American households.

Foreclosure Crisis:
Banks targeted specific group such as African Americans, which did not meet the financial criteria based on credit, employment, and income. Banks gave numerous subprime mortgages to non-qualified African Americans, which were very risky loans. These subprime loans got African Americans to buy more homes, yet the payments shortly after ballooned, which forced individuals which already purchased a home out of there means, to come up with more income to pay a higher mortgage which they could not afford. After the loans began to balloon African Americans could not pay for the mortgage, finally the banks were faced with the issue that the homes value was below the amount owed several African American homes became foreclosure in attempt to collect a portion of the non paid debt. Small business, and services were no longer able to keep up or receive loans from banks, and forced to down size resulting many African Americans to become unemployed.

In 2004, African American homeownership increased to 49%, in 2007 fell below 47%, in response to the foreclosure homes since the recession the African American homeownership will continue to decline in result of the recession and ballooned prime mortgages.

Financial Crisis:
The current recession affect on the African American labor market is an increase in unemployment rates, which is a negative affect on the labor market. The negative affect on African Americans impact on the economy is affecting the labor market, firms are downsizing which is resulting a decrease in the demand of labor. The African American unemployment rate was found at 8.3% in 2007, and expected to be at 11% by the end of 2010, these figures are both double the white unemployment rate.

Current Recession:
The recession has definitely targeted African Americans, receiving double the trouble in every aspect from homeowners, employment, business owners, entrepreneurs, youth, education and many other areas. Economics Policy Institute stated,...

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