Economic justice

Reverend King was a tireless champion of economic justice | Local News

On Monday, January 17, the nation pauses to honor the life of the late Reverend Martin Luther King, Jr. The only black American to be honored with a national holiday, many will remember his historic civil rights achievements.

But Dr. King also presented himself as a tireless champion of economic justice. His final public speech, given a day before his assassination in 1968, was to a Memphis audience in support of a long strike for fair wages among his mostly black sanitation workers. This prophetic oration, often referred to as his “Mountaintop” speech, also noted the city’s economic disparities.

“It’s good to talk about ‘long white dresses over there’, in all its symbolism,” Dr King said. “But at the end of the day, people want suits, dresses and shoes to wear here! It’s fine to talk about ‘streets dripping with milk and honey’, but God has commanded us to be concerned about the slums of here and her children who cannot eat three meals a day.”

When Dr King moved his family to the Lawndale neighborhood, he described it as “an island of poverty in the middle of an ocean of plenty”.

“Chicago had the highest per capita income of any city in the world, but you would never believe it looking out the windows of my apartment in the Lawndale slum,” Dr. King said.

Reverend Dr. Martin Luther King Jr.

“My neighbors were paying more rent in the unsanitary slums of Lawndale than white people were paying for modern apartments in the suburbs. The situation was much the same for consumer goods, home purchase prices and a variety of other services.

For example, the King family paid $94 a month for four rundown, shabby rooms. During open country housing marches on Gage Park and other predominantly white locations, new and larger apartment dwellers were paying just $78 a month for five rooms.

Fast forward to today and the cost of rental housing remains a challenge for millions of families. The average fair market price for a two-bedroom apartment is $1,295 per month. Still, the highest affordable rent for an average full-time worker is $977, according to the National Low Income Housing Coalition (NLHIC). Its recent report, Out of Reach, exposes the mismatch between the wages people earn and the price of decent rental housing in every state, metro area, and county in the United States.

According to the report, more than 7.5 million extremely low-income renters are severely affected by housing costs, spending more than half of their income on housing. On average, someone who works 40 hours a week year-round needs to earn $24.90 an hour to afford a modest two-bedroom house without incurring housing costs. However, the average hourly wage for a renter is only $18.78 per hour and minimum wage workers earn even less.

Additionally, there is a wealth of research documenting how consumers looking to transition from renting to owning face even greater financial hurdles in building up family wealth.

In 2019, potential buyers of a home with a median price of $321,500 needed to save 11 years to accrue a 5% down payment of $26,000 on that home, the Center for Responsible Lending (CRL) found in its independent report. and recent. But buyers looking for the lowest-cost loans, conventional mortgages, needed a 20% down payment of $64,300 plus an additional $9,663 for closing costs.

“There’s a huge disconnect between our collective view of America as the land of opportunity and this data, which shows renters are facing a surge in savings for homeownership,” said Christelle Bamona, researcher at CRL and author of the report. “This climb is especially steep for black and Latino people, essential workers, and those burdened with student debt.”

The National Association of Realtors (NAREB) highlights CRL’s findings. His 2021 study, State of Housing in Black America: Emerging from the Pandemic Recession (SHIBA) found that although homeownership generates the bulk of household wealth, less than 45% of black households are owners of their homes, compared to nearly 75% of whites. Additionally, black homeowners only realized $198 million in savings from lower interest rates from the Federal Reserve during COVID. Nationally, savings from this policy change totaled $5.8 billion.

“Black people have made little, if any, progress in closing the disparate homeownership gap between those of our white counterparts,” NAREB President Lydia Pope noted in the report’s foreword. . “Systemic discriminatory regulations and policies continue to thwart any meaningful effort to close the gap between landlords.”

For example, the price of mortgages and the undervaluation of home values ​​are examples of how the growth of black homeownership and, therefore, wealth is systematically suppressed. Since 2019, the black mortgage rejection rate (16%) has consistently been double that of whites (7%).

While access to mortgage credit remains a central housing issue, housing affordability has deteriorated to a record 117 months of year-over-year increases, according to the National Association of Realtors. (NAR). The median existing home price in November 2021 was $353,900, up 13.9% from November 2020 ($310,800).

Reverend Dr. Martin Luther King Jr.

Reverend Dr. Martin Luther King Jr.

Today, the quest for economic injustice continues. Just weeks before Dr. King’s assassination, his prophetic voice remains as current as it is timeless:

“Do you know that most of the poor in our country work every day? They make wages so low that they cannot begin to function in the mainstream of our nation’s economic life. These are facts that must be seen. And it’s criminal to have people working full time and a full time job earning part time income.

Charlene Crowell is a senior researcher at the Center for Responsible Lending.