Only Worth $100? The Harsh Reality of Single Black Women & Bankruptcy
Gender and racial wealth gaps pose long-term problems
In 2010, the Insight Center for Community Economic Development released a report on the national wealth gap, revealing that single African American women achieved a median wealth income of just $100. Yes, you read that right. The staggering statistic appears even more shocking when compared to that of their white counterparts, who averaged a median wealth income of just over $41,000.
Though the Insight Center is still assessing more recent data, the effects of the ongoing economic crisis, coupled with a longstanding structure of racism and sexism, lead many to believe that the new results will not show much improvement, and that solutions, if any, are few.
The report, "Lifting as we Climb: Women of Color, Wealth, and America’s Future," also found that nearly half of all single black women have zero or negative wealth, meaning their debts exceed all their assets; one-fourth of single black women have no checking or savings account; and only 33 percent of African American single women are homeowners.
Mariko Chang, independent consultant and author of "Shortchanged: Why Women Have Less Wealth and What Can Be Done About It," notes that the legacy of the racial wealth gap is largely to blame for the discrepancy.
"So much of the racial wealth gap that occurred in our history is still really alive," Chang said. "Because of both discrimination and a gender pay gap, black women, in particular, lack a lot of the traditional wealth safety nets that other groups have access to. Because of their lower earnings, and also because of the types of jobs they have - service jobs, for instance - they're less likely to have fringe benefits, retirement accounts, paid vacation days. If they face unemployment, illness or any kind of negative economic shock, they just don't have that cushion."
Subsequently, the rates at which blacks are defaulting on loans and filing for bankruptcy are growing.
According to the "Is There a Racial Divide in Bankruptcy?" report, African Americans file for Chapter 13 at twice the rate of any other racial group. Chapter 13 allows the individual to undergo a supervised financial reorganization of their debt, but keep their property. Filing for Chapter 7 results in the liquidation of the individual's assets, selling off their property with the money going to creditors.
Chapter 7 trustee Gregory M. Messer of Brooklyn, N.Y. raises an additional concern regarding women's wealth. "Medical expenses and divorces are true [reasons] for almost any debtor," he said. "But what's different for women, and this isn't unique to black women, is if you ask those who are filing individual bankruptcy, who have children, if they are receiving child support, a disproportionately high number would say 'No.'"
Furthermore, as Black News notes, student loans now have an overall default rate of about 15 percent at for-profit colleges - institutions Chang feels are aimed at the economically disadvantaged. "[The schools are] targeting them with this hard sell of promises of what they can achieve with a degree," she said. "They're burdened with such heavy loans in order to go through the educational training. They end up having to leave the program because they can't keep paying and get stuck with this heavy debt that they don't have a degree to then help pay off."
Contributing factors to the declining wealth of single black women can vary from the persistent shadow of racism to the chancy reliance on child support payments. Chang believes small steps towards changing this reality lie in the hands of one group in particular: employers. As of April, an African American woman working full-time year-round was paid roughly 80 cents for every dollar paid to her white female counterpart.
"There's no simple solution, unfortunately," she said. "A lot of the same policies that help protect wealth, especially for women of color, are the same ones we see right now under fire - social security cuts, for instance. But if you had to hone in it down, one of the things that makes a huge impact is equal pay. It's a no-brainer, but it's powerful. You shouldn't be able to pay anyone less because they're a woman or of color or because they have a different religion. If you're not making the same amount of money, how can you expect to save and build as much wealth?"