The Tax For Being Black

A new study puts a dollar figure to the lack of banking services available for African-American neighborhoods and instead saturating them with check-cashing stores and payday lenders: being black in America costs you $40,000 over your lifetime in fees, interest charges, and lost savings interest.

Many African Americans have difficulty accumulating savings in part because they lack access to mainstream financial services like banking, a new study on the contributing factors to the U.S. racial wealth gap by McKinsey & Co found on Tuesday.

Many minorities in the United States depend on more expensive financial services like check-cashing counters since there are fewer banks in non-white neighborhoods. Increasing access to basic banking services, like checking and savings accounts, could save individual black Americans up to $40,000 over their lifetime, the report found.
“Black families are being underserved and overcharged by institutions that can provide the best channels for saving,” said the report authored by McKinsey partners Shelley Stewart and Jason Wright.

In majority-white counties, there are an average of 41 financial institution for every 100,000 people compared with 27 in non-white majority neighborhoods. However, more expensive services like pay-day lending are more readily available in black neighborhoods, the report said.

Further, banks in black neighborhoods typically require higher account balances to avoid service fees. The average minimum balance in white neighborhoods was $626, compared with $871 in black neighborhoods.
The racial wealth gap, or the difference between the average white and black households’ net worth, has expanded over the last two decades, according to federal data. As of 2016, the wealth of the average white family was 10 times higher than the average wealth of a black family. The white household had a net worth of $171,000 while average black and Hispanic households had a median net worth of $17,600 and $20,700 respectively.

McKinsey says closing the gap between black and white wealth in the United States could increase GDP by up to 6% by 2028 through increased investments and consumption.

That would equal a trillion dollars over ten years in wealth growth for black households, and that's precisely the reason it'll never happen.

It's crushingly expensive to be poor in America.  It's crushingly expensive to be black in America.  It's devastatingly near-inescapable poverty if you're both.  The payday lender, title lender, and subprime lender industries exist to prey on black and brown people, to strip them of everything, and America is only too happy to "create jobs" to do it.

And that brings us to the other major systemic racism issue in the country: criminal justice reform and mass disenfranchisement of black voters.  With Florida finally taking steps to allow ex-cons to vote, many of them black, Kentucky now stands as the state that disenfranchises the black vote to most.

Since 1990, changing attitudes have led many other states to ease bans on political participation by those with felony records.

Kentucky is an outlier. Nearly one in 10 of the state’s adults, and one in four African-Americans, has a felony record that bans them from voting for life, according to The Sentencing Project, a criminal justice advocacy group. It is the nation’s highest rate of black disenfranchisement, the group says, and among African-American males like Mr. Harbin, the rate is considered even higher: an estimated one in three.
Those astounding rates are the product of the tough-on-crime ethos of the 1980s and 1990s, when crushing penalties were imposed for nonviolent violations like low-volume drug sales and failure to pay alimony.

The share of voting-age Kentuckians with felony records rose nearly fourfold from 1980 to 2010. Among the state’s black residents, it grew nearly sevenfold. Despite changes to criminal sentencing guidelines seven years ago and a declining crime rate, the state’s prison population continues to rise, with well over half the 24,000-plus prisoners warehoused in overcrowded county jails.

But politicians have been whipsawed between the progressive impulses of the state’s cities and its traditional culture. In 2015, Kentucky’s departing Democratic governor issued an executive order restoring voting rights to 140,000 residents with nonviolent felony records, only to see his Republican successor reverse the edict shortly after taking office. The state legislature voted in 2016 to erase records of the least serious felonies, but only after a costly and sometimes arduous expungement process. In two years, the state has granted expungements in only 1,663 cases, and denied them in another 171.

Senator Mitch McConnell, the Senate majority leader, staked out an unequivocal position on voting rights for those with felony records earlier this year. His political rise is rooted in Louisville, the state’s largest city and a Democratic bastion.

“Voting is a privilege,” he said. “Those who break our laws should not dilute the vote of law-abiding citizens.”

Political scientists suggest that Mr. McConnell might never have attained the Senate had those with felony records been allowed to vote when he first sought the seat in 1984. An analysis of that campaign in 2002 concluded that Mr. McConnell’s 5,200-vote victory in that razor-thin race would have been converted to a narrow loss had felons been allowed to cast ballots. 

When I say America is built and designed around institutional racism from the ground up, this is only a small fraction of what I mean. And the Trump regime is bound and determined to make it worse.