Blacks and Hispanics More Optimistic About Economy Than Whites

Stephanie Czekalinski

Despite significant wealth and income gaps, and higher than average unemployment rates, Hispanics and African-Americans are more optimistic about their economic prospects and the direction of the country than whites, recent polls show.

Republicans see the gap between enthusiasm for the future and the harsh economic realities many minorities face as an opportunity to reach out to a voting bloc that’s consistently supported Democrats in recent decades.

“There’s nothing wrong with always seeing the positive and negative,” said Amani Council, director of African-American communications for the Republican National Committee. “But understanding the reality of your position—that’s what needs to happen.”

Nonwhites have expressed greater economic confidence than their white counterparts every month since September 2008, according to Gallup poll numbers. They also expressed greater optimism about the economy and their personal finances over the next four years than whites have, according to the December Allstate/National Journal Heartland Monitor Poll.

Nonwhites were more likely than whites to say that by the end of President Obama’s second term, the country’s economy will improve, their personal finances will improve, the economic well-being of the middle class will improve, and the budget deficit and debt situation will improve.

That optimism exists in the face of discouraging economic data. African-Americans and Hispanics are about twice as likely as whites and Asians to be lower-income, according to a 2012 report by the Pew Research Center.

In 2010, white families on average had six times the wealth of black and Hispanic families ($632,000 versus $103,000) and earned on average double what black and Hispanic families did, according to an April report by the Urban Institute.

The recession hit all American families hard, but Hispanic families experienced the largest decline in wealth—dragged down by losses in home values, according to the Urban Institute report. Between 2007 and 2010, they lost about 40 percent of their wealth. Black families—many of whom saw their retirement savings depleted—lost about 31 percent of their wealth over the same period. White families, by comparison, lost 11 percent.

The reasons why African-Americans and Hispanics are more optimistic about the future than whites, who on average have greater resources at their disposal, are complex.

“Part of the answer is that most people don’t realize how unequal wealth is,” said Signe-Mary McKernan, an economist for the Urban Institute. “We live in communities, and we tend to compare ourselves to our family and our neighbors first.” Those around us tend to be of similar economic circumstances, she said.

Many African-Americans and Latinos are also starting out at a lower socioeconomic level, said Matt Barreto, founder of the polling firm Latino Decisions. Because whites had more to lose, the recent economic losses have hit their sense of optimism harder.

“When you have a group of 60-year-old African-Americans and Latinos sitting around a table, they aren’t stressing out about their 401(k)s being cut in half because they don’t have a 401(k),” Barreto said. “They’re looking at their kids.”

Those children, he said, have more opportunity than their parents, which breeds further optimism.

In April, 56 percent of nonwhite respondents said they believed their children would reach the upper class or the upper middle class, compared to 38 percent of whites, in the Allstate/National Journal Heartland Monitor Poll.

There is also some indication that African-Americans and Hispanics are more optimistic because they’re more likely than whites to have seen generational progress over their own lifetimes.

“For whites, they might just take that for granted or come from three generations of college graduates," Barreto said. “They’re just assuming that their kids are going to go and get that law degree.”

Nearly 50 percent of Hispanics and 33 percent of African-Americans said they were in a higher class than their parents, according to the April Heartland poll. A third of whites said the same thing.

Partisanship, too, plays a role in explaining the optimism among nonwhites, many of whom vote Democratic, said Frank Newport, Gallup’s editor-in-chief.

“To some degree, when we see the optimism ... that reflects their views of the presidency and Obama,” he said.

Some Republican strategists are hoping—as some in the Mitt Romney campaign did during the election—that their message of school choice, small government, and low taxes will resonate with the hopeful outlook of many in minority communities.

“The challenge is that we have to be in those communities and talking to those communities about things they talk about,” said Ruben Barrales, president of GROW Elect, a California group dedicated to electing Latino Republicans.

Republicans also hope that black and Hispanic voters will associate the tenuous economic circumstances of many in their communities with the president and his party.

“There has been such decline under this administration,” said Council of the RNC. “If I think that my economic well-being is going to change, but the numbers there say that the people in my community aren’t going to be getting jobs in the next three years—I think there’s a disconnect.”

Large numbers of Hispanics blame the struggling economy on the policies of the Bush administration, said Barreto, of Latino Decisions’ poll results. “But if things get significantly worse by 2015, we might start to see those things even out.”