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With Highest Black Unemployment Rate, Michigan Struggles to Figure Out Why

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While Black unemployment remains at almost twice the national rate, baffled policy experts are trying to determine why the state of Michigan has the highest number of jobless African-Americans in the nation.

Nearly 1 in 5 African-Americans in Michigan, 18.7 percent, are unemployed, according to recent research by the Economic Policy Institute that looked at the 4th quarter of 2012. That rate is almost 2.5 times higher than the unemployment rate for white workers in the state.

Michigan’s rate of 18.7 percent for the 4th quarter loomed above the national black unemployment of 14 percent for the same period. Many experts point to Detroit as the culprit — the largest city in the country with the highest black population at 82.7 percent — where the public transportation system is so bad that even those residents who have a job need as long as three hours to get to work.

Among the states with the highest black unemployment, there seem to be few common characteristics. Michigan doesn’t have much in common with New Jersey, the state with the second highest black unemployment rate, or with North Carolina at No. 4, or California at No. 5. However, Michigan does have some commonalities with Illinois, the state ranking third in black unemployment. All five states have black jobless rates well over 16 percent.

Experts contend that the persistent unemployment of blacks has had a huge impact on the wealth gap between blacks and whites. Wealth or net worth is defined as a person’s total assets — such as bank and retirement accounts, stocks and home value — minus debt. According to experts, it’s the cushion that Americans can lean on during an economic downturn.

While the wealth gap between blacks and whites was less than $100,000 in 1984, according to Brandeis University, that gap has since tripled.

“The wealth gap is really where history shows up in your wallet,” says Heather McGhee, vice president of policy and outreach at the public policy group Demos.

McGhee says that while student loan debt is at record numbers across the board, black college graduates are twice as likely to have student loan debt as their white counterparts, who often use their statistically higher wealth to pay for college and therefore take on less debt.

“It means a difference between the African-American graduate coming out, graduating into a recession … [and] having to start paying down her student loans,” McGhee told NPR. “Whereas her white classmate actually doesn’t and is able to get a job faster.”

McGhee believes the U.S. needs to go back to a debt-free college system, such as the one created by the GI Bill after World War II.

“We created the greatest middle class the world has ever seen … but by saying, ‘We as a country are investing in you,’ ” she says. “That’s what we have to do for today’s young generation that is more diverse and is less likely to come from inherited wealth.”

 

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