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US wealth gap grows for ethnic minorities
By Suzanne Goldenberg
Washington, DC, Oct. 19 — The wealth gap between white
households and Hispanic and African-American families in the US has
widened significantly, with the last recession inflicting a heavy toll
on minority households, a new study said Oct. 18.
An analysis of US census data by the Pew Hispanic Center revealed that
the 2001 economic downturn deepened a legacy of economic discrimination,
with Hispanics and African-Americans harder hit and taking longer to
recover.
By 2002, that produced a further deterioration of the economic divide,
where minorities own only a fraction of the wealth enjoyed by whites.
The median net worth of white households was $88,651, or 11 times greater
than Hispanic families ($7,932) and 14 times greater than African-American
families ($5,988.)
“We have always known about the wealth gap, but what is new and
disturbing is that the gaps are increasing,” said Roderick Harrison,
a demographer at the Joint Center for Political and Economic Studies.
“What you are seeing here are the historic disadvantages of black
and Hispanic populations from generations ago being carried over.”
The Pew study focuses on the damage caused to Hispanic and African-American
aspirations during an economic downturn.
Between 1999 and 2001, rising unemployment reduced the net worth of
Hispanics and African Americans by 27 percent. That left minority families
without a financial cushion, and far more vulnerable to economic reversals
than white households.
“Many of them are living on the edge and more than one quarter
have zero or negative wealth,” said Rakesh Kochhar, author of the
report. “They don’t have the cushion, and that makes recovery
harder.” Harrison argues that minority families are also the last
to benefit from times of economic expansion.
Employers are more likely to hire whites, and whites also move more
quickly to take advantage of a buoyant stock market.
That intensifies the effects of a 30 percent wage gap between white
and minority workers, making it that much more difficult for Hispanics
and African-Americans to overcome traditional disadvantage.
Crucially, minority families are far less likely to own their own homes
— in white households, ownership rates are 74 percent. Instead,
a legacy of discrimination and other barriers have conspired to help
keep African-American and Hispanic families as renters.
Home ownership rates among both groups is at 47 percent. Some families
cannot even aspire to home ownership; more than a quarter of black and
Hispanic households own no assets beyond a car.
“A young white couple might have the advantage of inheritance,
their parents may give them a down payment for house, or the bank will
look on them more kindly, but a young black family doesn’t have
that. It is just a little harder to enter the mainstream, and home ownership
is the key,” Kochhar said.
The Hispanic population has also been concentrated in areas with high
housing costs, like New York City and Los Angeles, making it more difficult
to get on the property ladder.
But the report suggests the outlook for the Hispanic population could
brighten, as the immigrant community puts down roots in America.
A younger generation of Hispanics is becoming better educated and moving
into better paying jobs; the community is also dispersing to other towns
around the country, where housing is more affordable.
Source: Guardian (UK)
Halliburton’s White House relationship
on the rocks
By David Teather
Oct. 24 — It must have seemed like a terrific stroke of
luck: Dick Cheney, the man who for the past five years had been the
chief executive of Halliburton, became the vice-president in 2000. The
oil services and engineering company was given a direct line to the
White House.
But Halliburton’s relationship with the Bush administration is
beginning to prove more problematic than it is worth.
The company admitted 10 days ago that it was considering selling Kellogg
Brown & Root (KBR), the division carrying out billions of dollars
worth of work for the US government in Iraq, in a desperate attempt
to get out of the spotlight. It is considering a sale, spin-off, or
a separate listing for the business on the stock exchange.
The company’s shares have fallen from $50 when Cheney first took
office in the White House to the low $30s.
Halliburton’s business with the federal government has grown considerably
since the current administration took office. According to the New York
Times, the business went from being the 22nd biggest military contractor
in 2000 to the seventh largest in 2003.
Prior to the invasion of Iraq, without being asked to tender, Halliburton
was handed a contract worth up to $7 billion to repair the nation’s
oilfields. It was also given a contract to provide logistical support
to US troops, handling everything from food to transport and laundry
services. That deal, awarded under an existing long-term contract to
provide emergency services, was worth a potential $13 billion.
When the first secretive contract came to light, shortly after the March
2003 invasion, Democrats rounded on the company, arguing that it was
evidence of an old boy network in the White House. Cheney, who walked
away from Halliburton with a $36 million package, continued to receive
deferred income from the firm.
The oilfields contract was eventually put out to tender, with KBR retaining
part of the business. The higher profile of Halliburton has ensured
that the company has remained on the front pages throughout a series
of controversies that might otherwise have gone unreported.
This year the firm agreed to pay $7.5 million to settle allegations
that it failed to disclose a key accounting change in 1998 that allowed
it to inflate profits and meet Wall Street targets while Cheney was
still in charge.
The accounting change, concerning the booking of disputed cost overruns
on projects, allowed it to increase its profits by more than $200 million.
A class action lawsuit brought on behalf of shareholders has accused
the firm of systemic accounting fraud - allegations the company denies.
Investigations are still under way into claims that a consortium KBR
now leads paid bribes to Nigerian officials to secure the contract to
build a natural gas plant. The company has admitted uncovering discussions
of bribes, though it has no evidence they were actually paid. A Treasury
Department inquiry has also been reopened into dealings the company
may have had with Iran.
Military officials, meanwhile, have accused KBR of routinely overcharging
for work carried out as part of its logistics contract in Iraq and threatened
to withhold payment on 15 percent of bills.
A Pentagon auditors’ report said the company had failed to account
for at least $1.8 billion worth of work done. In a little-covered development
the defense contract management agency said last month that the company’s
billing methods were adequate but that had no effect on the other investigations
and audits still pending.
The Pentagon is now considering breaking the contract up into six pieces
and inviting new tenders. Tired of the onslaught of invective, Halliburton
has said it is not certain if it will bid for any of the smaller pieces.
In a meeting with investors in Houston toward the end of September,
Halliburton’s chief executive, David Lesar, said the company had
become the target of a “vicious campaign” of political attacks
ahead of the presidential election. The company’s workers, he added,
“don’t deserve to have their jobs threatened for political
gain.” Another reason for wanting to quit Iraq is that 45 of the
company’s workers have died there.
As the presidential election has heated up, so has the temperature surrounding
Halliburton. The company has become a useful piece of shorthand for
the newly aggressive democratic nominee, John Kerry.
He told an audience in Albuquerque on a campaign trip last month: “Dick
Cheney’s old company, Halliburton, has profited from the mess in
Iraq at the expense of American troops and taxpayers. While Halliburton
has been engaging in massive overcharging and wasteful practices under
this no-bid contract, Dick Cheney has continued to receive compensation
from his former company.”
In last week’s presidential debate, the Democratic nominee assailed
Halliburton again on national television. He said the administration
had deliberately limited overseas participation in Iraqi reconstruction
to save the “spoils of war” for the company.
Cheney, it turns out, may have been of little real help to Halliburton
at all: KBR filed for bankruptcy earlier this year, weighed down by
asbestos litigation it inherited from an acquisition the vice-president
made while he was still running the firm.
Source: Guardian (UK)
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