The Joint Center for Political and Economic Studies, a Washington, D.C., think tank, has found that Black Americans are not seeing their finances improve in America’s current recovery.
The Joint Center’s latest report, ‘Pessimism and Hope: A Survey of the Financial Status and Aspirations of Black Americans,’ found that more than half of Black Americans (57%) have credit card debt, about a third (32%) have student loan debt, and over a quarter (28%) have mortgage debt.
Further, about one-third (33%) of Black Americans report having more debt than is manageable. The 39-page report noted that Black Americans have a wide range of credit scores.
Approximately three in 10 Black Americans (30%) report having a credit score that is good or very good, and around four in 10 (39%) report having a credit score that is bad or very bad.
Also, credit scores vary substantially with income, with nearly half of Black Americans who make $60,000 or more annually reported having a good or very good credit score; only 16% of Black Americans who make $30,000 or less per year report having good or very good credit scores.
Joint Center officials said the full report, which examines Black Americans’ financial conditions and ambitions, contains research completed in partnership with NORC at the University of Chicago.
Officials said researchers took a community-centered approach to understand the current financial situations, debt and credit, financial aspirations, and perceived barriers for Black Americans.
“This research is especially timely as Black Americans work to realize the full benefits of the current economic recovery,” Jessica Fulton, vice president of policy for the Joint Center, said in a news release. “By collecting and analyzing new data on Black Americans specifically, we gain insights into the economic well-being of Black communities; therefore, the combined national economy in the wake of the COVID-19 pandemic.”
“Our findings will serve public and private sector decision-makers committed to connecting more Americans to economic opportunities, especially those focused on financial well-being and wealth building.”
Among the report’s highlights, respondents identified medical costs as a significant barrier to proper medical care for some Black Americans.
For example, around one-quarter of Black Americans have skipped a medical test or treatment (22%), failed to fill a prescription (23%), or failed to get medical care for a condition (24%) because of cost.
Researchers concluded that most Black Americans’ financial aspirations revolve around relatively immediate goals, with 80% of Black adults viewing things like not having to worry about monthly bills, not living paycheck to paycheck, having enough savings to handle an emergency, and being debt-free as very important to their financial goals.
With the battle continuing in Congress over the nation’s debt ceiling, about 38% of Black Americans are mainly concerned with the possibility of reducing social security payments, which researchers determined poses a significant risk for many people’s retirement security.
Republican members of Congress have signaled a desire to cut social security benefits.
At the same time, Vice President Kamala Harris told the Black Press that such an occurrence was “a non-starter” for Democrats in recent negotiations.
The Joint Center also found that the most frequently cited barriers to achieving financial aspirations are related to the current economy. High inflation, insufficient money to start investing, and high-interest rates were the most cited barriers in the study.
The phenomenon of Black Americans being harder hit by adverse economic influences and lagging in recovery compared to White Americans is not new, the report’s authors said.
They asserted disparate economic impacts for Black communities are also apparent in the current crisis.
Research from the current crisis shows the outsized impacts on Black communities.
“Based on past and ongoing work to expose disparities and promote equity, we know that structural barriers faced by Black Americans, the compounded insults of health and economic consequences of COVID-19, the economic assault from the Great Recession, and persistent structural racism, are destructive to the financial well-being of Black households,” the authors wrote.
“However, despite some distressing indicators about their current financial situation, most Black Americans are optimistic about their financial future, even at lower-income levels.”