[This is the first post in a new blog series that will explore racial disparities in California].

In the aftermath of the murder of George Floyd in Minneapolis, the U.S. has seen a wave of civil protests in over 2,000 cities calling for the dismantling of systemic racism and policing practices. Not since the Civil Rights movement has the U.S. seen such broad-based calls for racial justice.

The disruption and hardship of the COVID-19 pandemic, where at least 36 million people have claimed unemployment nationally since March 2020, is the backdrop for this movement, and may have contributed to the unrest. Many of the protesters have been people of color disconnected from the labor market and from educational opportunities as they seek a better life for themselves, free of discrimination.

Our financial stability study, Struggling to Stay Afloat: The Real Cost Measure in California 2019 reveals that while households of all racial groups struggle economically, they do so at different rates; 45% of African American households and 57% of Latino households in California, compared to 24% of White households, do not earn enough for a decent standard of living when you factor the costs of housing, food, health care, child care, transportation and other basic needs. All told, there are over 3.8 million struggling households in a state that would be the 5th largest economy in the world if it were its own sovereign country. 

               

If we were to transform the study’s findings to examine the estimated number of households below the Real Cost Measure, an entirely different portrait emerges on the degree of struggle throughout the state. 

               

After Latinos, the second highest number of households struggling in California are White households at over 1.2 million. In fact, the highest concentration of struggling White households in the state (49%) can be found in Greater Los Angeles and the San Francisco Bay Area debunking myths that most struggling White households reside in rural communities. Nevertheless, our findings with the Real Cost Measure is consistent with other social science research that Latinos and African Americans struggle more compared to other ethnic groups.

Looking more closely at historical income patterns among major ethnic groups across the U.S., it is easy to identify how income stagnation limits the capabilities of people of color from becoming upwardly mobile. 

               

Since 2002, Black and Latino households have consistently lagged behind Asian and White households in per capita income according to the U.S. Census Bureau. When using 2018 inflation-adjusted dollars, Black households have only gained 12% in per capita income compared to Asians at 26%. 

Whether we look at our Real Cost Measure study of household income, or studies of racial wealth gaps or economic mobility, there is no disputing that more attention needs to be directed at helping people of color with meaningful economic gains that can strengthen their financial stability, educational attainment and health outcomes. In a recent interview on NPR’s Fresh Air, Nikole Hanna-Jones makes a strong argument that direct cash transfers are necessary to close racial gaps. Despite gains in educational attainment, Hannah-Jones notes, “Black people with a college degree still earn less than White people, still have less wealth than White Americans who have a high school degree.” Our Real Cost Measure study confirms that finding; Black and Latino householders earn less than White households with equivalent levels of education. 

To help address these economic disparities, California’s United Ways are providing direct financial assistance to help families impacted by the COVID-19 pandemic, primarily families of color. While this is a small step in addressing overall racial income gaps, it is our hope that philanthropy can increase its overall attention and giving to help address ongoing racial disparities.

Stay tuned for new blog posts in the coming weeks, including educational disparities in California, disconnected youth and more.