Minorities clinging to the middle class have come out of the Great Recession at a higher risk for falling into poverty during the next economic crisis, according to a recent report by the Center for American Progress, a nonpartisan think tank in Washington, D.C.

The report titled, Making Sure Money Is Available When We Need It, noted that over the past 30 years, household risk exposure increased for many Americans, following the crash of the saving and loan industry in 1989, the rise and fall of the tech bubble in 2000, and most recently the collapse of housing market in 2007 that led to the Great Recession.

Households have experienced more wealth volatility since the late 1980s because there has been more risk in the market and because they have been increasingly exposed to those risks, said the report.

The study found that was 27 percent of non-White households were at “very high risk” of exposure compared to 22.7 percent for Whites. The report also said that: “The risk exposure for nonwhite households, has grown faster than the risk exposure for white families.”

Household wealth — a family’s asset-to-debt ratio — was a determining factor on a families’ ability to weather the next economic disaster and limit their exposure to financial ruin.

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For many American families, homeownership had been the key to gaining a strong foothold in the middle class and for many families in the Black community its still one of the safest assets to own. The deluge of subprime mortgages, not an inability to afford a home, changed that.

“African Americans were targeted more for subprime loans they didn’t do anything risky like start buying stocks instead of mutual funds but they wound up holding what were riskier investments by virtue of the way the housing market works, said Wilhelmina Leigh, a senior research associate at the Joint Center for Political and Economic Studies, a group that works to improve the socioeconomic status of African Americans and other people of color.

Read more at BlackVoiceNews.com.

On Capitol Hill, there are two ways that people tend to talk about the sequester -- a slate of automatic federal spending cuts that are difficult but necessary, or a blunt tool that will inflict tremendous suffering.

But a growing chorus of researchers, political analysts and economists say that the cuts are poised to inflict particularly intense pain on people of color and impede the country’s ability to prosper as these populations grow.

“What you will keep hearing is that it is a little to early to know exactly what is going to happen. And I agree. But I think there are certainly a number of areas where you can expect a disproportionate impact on black and Latino families," said Margaret C. Simms, a fellow at the Urban Institute think tank in Washington, D.C., and director of its Low-Income Working Families Project. "What we are talking about is taking the existing inequalities this country has and really making them worse, much worse.”

If the Obama administration and Congress fail to reach an agreement to modify the slate of automatic spending cuts, as much as $900 million could be cut from Head Start, a federal early education program aimed at helping low-income children keep pace with their peers in school, according to a February analysis by the Center for American Progress, a left-leaning think tank. Losing those funds means that as many as 700,000 children in need of Head Start services may not be able to enroll. A full 60 percent of children enrolled in Head Start are black, Latino or Asian.  

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The sequester is also slated to cut funding for medical research, community health centers that provide care to low-income and uninsured individuals and programs that cover the costs of child vaccinations. These cuts will disproportionately affect people of color, said Brian D. Smedley, vice president and director of the Joint Center for Political and Economic Studies’ Health Policy Institute.

"Sequestration results in significant cuts to very important programs that again, in my view, are likely to widen the health gaps rather than close our fiscal hole," Smedley said.

Read more at The Huffington Post.

Dr. Brian Smedley spoke on the effect a federal government sequestration can and will have on health and other programs that assist a large number of people of color during a Joint Center panel discussion on February 28, 2013.

One day before $85 billion worth of automatic, across-the-board cuts to domestic and defense programs kicked in, a panel of five policy experts painted a dire picture of the effects on communities of color, including Latinos, Native Americans, Asians and African Americans.

One specialist, Ellen Nissenbaum, senior vice president for Government Affairs at the Center on Budget & Policy Priorities in Northwest, said sequestration could have been avoided.

"This is absolutely a man-made creation. We didn't ever foresee sequestration which is the victory of their goals," she said of the Republicans in Congress who refused to come to an agreement with President Barack Obama and their Democratic counterparts. "Everyone agreed to 10 years with a hammer. But the hammer is so attractive to some representatives."

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At an event hosted by the Northwest-based Joint Center for Political and Economic Studies, titled, "The Impact of Sequestration on the Health and Well-Being of Communities of Color", panelists said minority communities who depend on federal assistance programs will be disproportionately affected.

"While most Americans will feel the impact of the sequestration, it will have a devastating effect on communities of color as the budget axe falls on programs that many low-income people rely upon to stay healthy," said Ralph B. Everett, president and CEO of the Joint Center at the March 1 discussion. "To pull the rug out from under them would not be wise. Without investment today, we will pay a higher price down the road."

Read more at The Washington Informer.

Roland Martin talks to Dr. Brian Smedley and Rep. Marcia Fudge about the effects of the sequestration on minorities.

A transcript of this interview can be found at Roland Martin Reports.

Dreaded automatic federal spending cuts, otherwise known as “sequestration,” swept into Washington on Friday. Eleventh hour meetings were hastily scheduled, yet players on both sides of the aisle seemed resigned to the reality of $86 billion suddenly snatched from the federal budget.

Opposing sides argued all week over how severe the cuts would be and whose idea it was in the first place. However, the stubborn resolves of Democrats and Republicans on and off Capitol Hill offered little hope of any foreseeable compromise.

“There’s another huge event that takes place that could be even worse, and that’s when the Continuing Resolution on March 27 takes place,” Rep. Gregory Meeks (D-NY) told the Tribune. Meeks is holding out hope that a deal can be reached some time before Congress negotiates short-term spending plans by the end of March. Some observers are counting on that moment when House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) can finally sit down and avoid fiscal calamity.

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Experts worry most about the unemployment benefits being reduced by 10 percent – not good for African Americans who are still facing a jobless rate double the national average. And even as local communities fret over struggling school systems, the sequester axe takes no prisoners on education when cutting $3 billion in financial aid for low income students and in desperately needed school programs servicing at-risk youth.

Also alarming is the impact sequestration would have on key public health services affecting people of color, especially women and children. “Sequestration would result in 25,000 fewer breast and cervical cancer screenings, 42,000 fewer HIV tests and 900,000 fewer patients served at Community Health Centers,” says Dr. Brian Smedley, vice president and director of the Health Policy Institute at the Joint Center for Political and Economic Studies. “There are just so many vital programs that detect chronic diseases earlier, and this is critical since we have a higher burden of disease in the community.”

Read more at The Philadelphia Tribune.

The budget cuts known as "the sequester" will hit communities of color particularly hard when they take effect Friday, according to a panel discussion Thursday at the Joint Center for Political and Economic Studies in Washington.

The sequester, as the cuts are known inside the Beltway, "hampers federal efforts to protect health, prevent disease and disability, and promote opportunity for communities already burdened by risks for poor health," said Brian D. Smedley of the JCPES.

While the poor are shielded from many cuts (Social Security and Medicaid are exempt), the sequester will affect some programs that disproportionately serve people of color. Screenings and tests offered through the Centers for Disease Control and Prevention will be cut, according to the JCPES, as will federal funding for community health centers and early childhood care and education programs, as well as WIC, the program that provides supplemental nutrition for women, infants, and children.

In practical terms, that means CDC would provide 424,000 fewer HIV tests and 25,000 fewer breast and cervical cancer screenings for low-income, high-risk women, the JCPES said, citing a recent House Appropriations Committee report. Federal funding for community health centers would be cut by $120 million, which could mean that 900,000 fewer patients would be served. About 70,000 children would lose access to Head Start, and 600,000 low-income pregnant and breastfeeding women and their children could be cut from the WIC rolls.

Because racial and ethnic minorities, who represent 37 percent of the overall U.S. population, disproportionately use those services, panelists worry that those communities will be hit hard by the cuts.

Read more at National Journal.

Five policy experts delved into details on how impending sequestration cuts will further disadvantage those who depend on federal assistance programs, particularly people of color, during a Thursday panel discussion at the Joint Center for Political and Economic Studies.

At the event, entitled The Impact of Sequestration on the Health and Well-Being of Communities of Color and held on the eve of the sequestration’s March 1 effective date, panel members discussed the array of health, human development, and environmental programs that are important to communities of color and which face particularly devastating cuts.  Among them are the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Head Start, HIV prevention and testing, and the federal program that provides low-income, uninsured, and underinsured women access to breast and cervical cancer screening and diagnostic testing.  

Brian Smedley, Ph.D., Vice President of the Joint Center and Director of its Health Policy Institute, reported that the sequestration will result in 600,000 women, infants, and children losing WIC services, 70,000 children losing access to Head Start programs, 900,000 fewer patients served by community health centers and 25,000 fewer cancer screenings and 424,000 fewer HIV tests being covered by CDC funds. The proportion of people of color in each program ranges from 46 to 77 percent, he said.
 

Download the entire press release by clicking the icon below.

A panel of experts will discuss the potential impact of the sequestration program cuts on communities of color at a Thursday morning event hosted by the Joint Center for Political and Economic Studies.

The event will take place on Thursday, February 28, 2013 from 8:30 a.m. to 10:00 a.m. at the Joint Center, located at 805 Fifteenth Street, NW, in Washington, DC. The package of automatic across-the-board spending cuts will go into effect on Friday, March 1, unless President Obama and Members of Congress are able to hammer out an agreement to avoid the harmful impact they are expected to have on the economy, jobs, and the most vulnerable members of society.

“While most Americans will feel the impact of the sequestration, these cuts will have a particularly devastating effect on communities of color, where many people are still struggling to join the economic recovery,” said Ralph B. Everett, the Joint Center’s President and CEO.  “To pull the rug out from under them would be destructive and would not serve the nation well.”  

The participants for Thursday’s panel are:

• Ellen Nissenbaum, Senior Vice President for Government Affairs, Center on Budget and Policy Priorities;
• Liany Elba Arroyo, Associate Director, Education and Children's Policy Project, National Council of La Raza;
• Amber D. Ebarb, Program Manager, Policy Research Center, National Congress of American Indians;
• Priscilla Huang, J.D., Policy Director, Asian & Pacific Islander American Health Forum;
• Brian Smedley, Ph.D., Vice President and Director, Health Policy Institute, Joint Center for Political and Economic Studies;
• Ralph B. Everett, Esq., President and CEO, Joint Center for Political and Economic Studies (Moderator)

To read the entire press release, click the icon below. For event information and registration, visit our Events page.

Joint Center policy scholar Dr. Wilhelmina Leigh joins a distinguished group of experts to discuss "Health, Housing, and Education: Core Needs of the Population" at Howard University's Fourth Annual African American Economic Summit on February 1, 2013.