The reason minority households were more severely affected than white people were is because they were more dependent on home equity rather than stocks for their net worth. Therefore, while the stock market has rebounded, the housing market has not benefiting whites more proportionally. …
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While there has been some anemic recovery in the US economy from the 2007-2009 global recession the housing market remains a serious problem. For the most part the economic impact has been well documented analyzed and quantified the sociological implications are less clear. Some trends have at least been identified if not quantified, but some sociological consequences of the ongoing downturn may not fully play out and be thoroughly understood for years. However 7 internet articles I believe give some clues regarding different aspects of the sociological impact. They will be discussed in turn.
“Wealth Gaps Rise to Record Highs between Whites, Blacks and Hispanics”
This article (Kochhar Fry and Taylor 2011) is both interesting and worrisome. Using statistics it shows that the recession has widened the wealth gap between whites and blacks/Hispanics even though all groups have suffered losses. Asians are in between. For example, the net worth of whites fell from approximately $135,000 to $113,000 during the period 2005-2009, Hispanics from about $18,000 to $6,000 and blacks from $12,000 to $6,000 during the same time period. Asians fell from $168,000 to &78,000. However, many Asians are recent immigrants and since it takes time to amass a net worth, if you remove recent (less than 5 years) arrivals from this group their 2009 net worth is similar to that of American whites. The reason minority households were more severely affected than white people were is because they were more dependent on home equity rather than stocks for their net worth. Therefore, while the stock market has rebounded, the housing market has not benefiting whites more proportionally. Also Hispanics and Asians as groups suffered largely because they tend to live in California, Florida, Nevada and Arizona, states most impacted by the housing crises. The authors provided statistics to show that Hispanics and blacks had more home foreclosures and a greater reduction in home ownership rates than any other group. They also showed that these groups had more negative net worth, largely due to “under water” mortgages where the balance owing exceeds the house value. In summary, they illustrated that the wealth gap is the highest it has been for 25 years, with the recession wiping out the minority gains of the 90s which had reduced this gap. Although not discussed in this article, this trend of wealth gap widening is worrisome if it continues. I has negative sociological potential for race/ethnic relations. Even before the recession particularly blacks and Hispanics tended to be in an inferior economic position than whites and have fewer real opportunities for education and career advancement only partially remedied by affirmative action programs. If they are forced out of their homes and ghettoized in substandard rental areas, this could exacerbate stereotyping and threaten already fragile race relations. We may even see a return to the race riots of the 1960s. Experience has shown that racial harmony is promoted when all groups can integrate and share I the attainment of benefits the society offers including home ownership. “10 Signs the Double-Dip Recession Has Begun” McIntyre (2011) argues that not only has the US weak recovery stalled, but we are entering the second dip of the recession for the following 19 reasons. First, inflation has returned with increases in commodity prices such as coffee, cotton, sugar, meat and corn based products. Secondly, while late 2009 saw a significant increase in stock prices, they stalled in 20011. Treasury bills have only a 3% yield and the value of gold has faltered. Third, while there was an increase in auto sales after the bailout, they have now stalled again. Forth, while crude oil prices dropped to under $50 a barrel in 2009, they have now rebounded to well over $100, causing gas prices to rise to almost $5 a gallon. This has hurt retail sales and firms producing products from petrochemicals. The
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