Latinos, minorities losing sight of the American Dream

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Updated: November 16, 2011 1:19AM

One look at a recent gathering of business owners, entrepreneurs and corporations at Navy Pier seeking to tap into the growing Latino market would suggest that Latinos are on their way to achieving the American Dream.

In part, this is true. There are plenty of success stories of Latinos who have overcome many obstacles to become CEOs or business owners. And Latino-owned businesses have grown even during the recession.

But the reality is that the majority of the Latino population faces a downgraded American Dream.

From 2005 to 2009, the net worth — assets minus debt — of Hispanic households fell 66 percent nationwide, according to a Pew Research Center report. It showed that the collapse of the housing market in 2006 and the recession that followed took a greater toll on minorities. As a result, in 2009, the typical Hispanic household had $6,325 in wealth while the average white household had $113.149.

That is an alarming 20-1 ratio.

African Americans also saw their net worth fall — to 53 percent — as the result of the recession, while whites took a hit of 16 percent.

These figures reveal a grim picture of a rapidly evaporating middle class, particularly among Latinos and African Americans. I would like to agree with President Barack Obama that our country will always have a triple A rating. But the fact is that we are looking more and more like a Third World country — where the rich are getting richer and the poor are falling further behind.

You just have to look to the widening gap between the wealthy and the working class. The income gap between rich and poor grew to the largest margin ever in 2009. The wealthiest 5 percent of Americans added a bit to their annual incomes while families at the $50,000 average level slipped lower.

No wonder luxury stores in downtown Chicago are doing just fine even while working-class neighborhoods and suburbs have been devastated by unemployment and foreclosures.

The fundamental idea that through hard work, sacrifice and dedication people in America can achieve at least a middle-class life is being challenged to its core. This is a recipe for remaking the United States into something that looks like a developing country, with a small but unbelievably wealthy class at the top and the vast majority of people just scraping by.

The double whammy that hit Latinos in Illinois and elsewhere was the bust of the housing market and the collapse of the construction industry. Like many immigrants before them, Latinos had their wealth tied up in their homes. And many worked in the construction industry.

The result was catastrophic when the housing bubble burst. Foreclosures hit working-class neighborhoods and suburbs because minorities were the preferred targets of predatory lending and subprime loans.

According to the Latino Policy Forum, in 2009 there were 4,397 foreclosure filings in the Chicago wards with the highest population of Latinos, an increase of 148.4 percent over 2007.

The same happened in the five suburbs with the highest Latino population: from Aurora to Waukegan. There were 5,734 foreclosure fillings, an increase of 103.7 percent over 2007.

And now the economy might be headed to a second recession. The prolonged economic crisis will continue to have dire consequences particularly for Latinos and other minorities, as well as for the communities in which they live.

“The American Dream — not only for Latinos but for many Americans — is further out of reach,” said Sylvia Puente, executive director of the Latino Policy Forum. “We are seeing the first generation of Americans whose children might not be better off than their parents.”

The loss of that quintessential American promise is worse than any downgrade of our country’s financial rating.