4 Things to Know About Financial Challenges in Native Communities

It’s appalling—but unsurprising—that after hundreds of years of stripping Native communities of their land and natural resources, Native Americans still face tough economic challenges. To recognize Indigenous Peoples’ Day, we rounded up news articles, reports, and stats to know about the current state of Native Americans’ financial outlook. 

Native Americans Have Been Extremely Hard-Hit By Inflation

A recent poll found that more than two-thirds of Native Americans have experienced “significant financial problems” due to inflation. Native Americans, especially those who live on reservations, are often far from basic services such as a full-sized grocery store. The increased cost of gas and transportation means that just getting to the store is an expensive venture, never mind the higher food prices. 

Native Americans Experienced Shocking Levels Of Unemployment During the Pandemic (And Still Do)

In April 2020, Native American workers saw unemployment rates as high as 28.6%—nearly twice that of the total population. Earlier this year, the Bureau of Labor Statistics started reporting the monthly unemployment stats for American Indian and Native Alaskan populations in a more accessible and visible way. This revealed that unemployment remains much higher among Native Americans. Even as the country’s overall unemployment rate fell to 4.4% early this year, the rate for Native Americans was still at 11.1%. 

About one-third of Native Americans live in poverty and unsurprisingly, a lack of steady employment contributes to that. One expert found that equal employment rates for Native Americans could reduce their poverty levels by about 20%.

Native Americans Are More Likely to Be Unbanked And Have Credit Issues

One in six Native American households is unbanked, meaning they do not have accounts with a traditional bank. Part of the problem is that in some Native communities, banks are fewer and farther between. On average, the closest bank is 12 miles away from the center of a reservation but sometimes it’s as much as 70 miles away compared to 1 mile for most counties in the U.S. A lack of access to physical banking locations means that Native Americans are more likely to rely on more expensive alternatives to send and receive money.

Native Americans are also more likely to have lower credit scores and debt in collections. About 53% of people who live in majority-Native communities have collections debt compared to 22% of white Americans. They are also more than twice as likely to have credit scores under 600: 46% compared to 22%

Native Communities Face Higher Barriers to Homeownership & Safe Housing

Native Americans are less likely to own homes than their white counterparts: 54% of Native households lived in homes they owned compared to 75% of white households. The rate of Native Americans who own their own has actually decreased since 2000. The problems include the lack of housing supply and difficulty securing mortgages.

Overcrowding and substandard housing are major issues. Among the Northern Arapaho in Wyoming, 55% of the community’s population is considered homeless because they are couch surfing. Also, about 40% of housing in the Navajo Nation does not have electricity or running water. Fixing these issues would require a major investment in new homes and infrastructure. A study from the Department of Housing and Urban Development found that 68,000 units need to be built in Native communities just to eliminate overcrowding and rundown homes. 

Sources: 

NPR, “Poll: 69% of Native Americans say inflation is severely affecting their lives,” 8/2022

Bureau of Labor Statistics, “Unemployment rate for American Indians and Alaska Natives at 7.9 percent in December 2021,” 1/26/22

Brookings Institute, “For the first time, the government published monthly unemployment data on Native Americans, and the picture is stark,” 2/9/22

Northwestern University Insitute for Policy Research, “What Drives Native American Poverty?,” 2/24/20

Independent Banker, “Overcoming banking hurdles for Native American customers,” 10/1/21

Urban Institute, “Native Communities Face Sustained Challenges to Building Financial Resilience,” 2/25/21

Joint Economic Committee, “Native American Communities Continue to Face Barriers to

Opportunity that Stifle Economic Mobility,” 5/13/22

The Guardian, “America's forgotten crisis: over 50% of one Native American tribe are homeless,” 4/6/17