A $95,000 question: why are whites five times richer than blacks in the US?

[EndersDame]

A huge wealth gap has opened up between black and white people in the US over the past quarter of a century – a difference sufficient to put two children through university – because of racial discrimination and economic policies that favour the affluent.

A typical white family is now five times richer than its African-American counterpart of the same class, according to a report released today by Brandeis University in Massachusetts.

White families typically have assets worth $100,000 (£69,000), up from $22,000 in the mid-1980s. African-American families' assets stand at just $5,000, up from around $2,000.

A quarter of black families have no assets at all. The study monitored more than 2,000 families since 1984.

http://www.guardian.co.uk/world/2010/may/17/white-people-95000-richer-black

So tell me how again affirmative action is making life easier for us brown and black folk?

[slackmaster]

1. Sentence makes no sense whatsoever

A typical white family is now five times richer than its African-American counterpart of the same class...

I thought "class" was defined in terms of net worth and income.

[greencharlie]

2. what's YOUR theory? nt

[Statistical]

3. Afirmative action can only help income desparity not wealth.

The issue is more complex than what you portray.

The study in link shows that even among blacks & whites of same income whites acquired more wealth.
Among high income black individual wealth declined in last decade.

This would indicate the issue is larger than just income disparity (which affirmative action attempts to compensate for).
There have to be larger cultural issues at work for one group of people to end up with less wealth than another group despite having similar income.

Only one in 10 African-Americans owns any shares. A third do not have a pension plan, and among those who do the value is on average a fifth of plans held by whites.

Shapiro says one of the most disturbing aspects of the study is that wealth among the highest-income African-Americans has actually fallen in recent years, dropping from a peak of $25,000 to about $18,000, while among white counterparts of similar class and income it has surged to around $240,000.

In 1984, high-income black Americans had more assets than middle-income whites. That is no longer true.

"I'm a pretty jaded and cynical researcher in some way, but this was shocking, quite frankly, a really important dynamic," said Shapiro. "This represents a broken chain of achievement. In the United States context, when we are thinking about racial equality and the economy we have focused for a long time on equal opportunity.

My total wild guess is it has a lot to do with family. A prosperous white family (not ultra rich say upper middle income) likely comes from a prosperous white family. Thus lots of ideals like "owning your home", "get a 30 year fixed mortgage", "put aside 10% in retirement account", "pay cash don't overuse credit" etc are passed on.

This information wealth leads to choices that continue the wealth building cycle. If anything the study is good evidence that high income alone can't guarantee long term wealth.

[KamaAina]

6. And a prosperous black family most likely does not come from a prosperous black family.

So the prosperous family is often called upon to help out less fortunate family members. Ergo, less accumulation of wealth.

[Statistical]

9. Another good point.

Also a prosperous family will pass on resources via inheritence and those are passed on etc.
Income equality is the first step but it takes generations for that income equality to "work through the system".

My parents family had pretty good incomes but never built any wealth. My wife's family the exact opposite. Now in our situation this isn't a race thing but it does illustrate the generation compounding effect of wealth (or lack of wealth) depending on how income is used.

[Starry Messenger]

4. Are you arguing against AA?

I'm not sure where you're going with this. I would guess that a) AA hasn't been in place long enough to undo the damage of 200+ years of slavery and exploitation and lack of access to wealth/wages by families of color b) AA is not applied rigorously and with integrity by the system.

[EndersDame]

10. This was in response to some idiot co workers of mine who think that we

(in my case hispanics) have it easy becaue of affirmative action

[Starry Messenger]

13. Got it.

Considering that those AA laws are under constant attack, I'm not sure what would give them that impression. The CA supremes might be restoring the '96 ban on AA because (surprise) discrimination is going on without it.

http://latimesblogs.latimes.com/lanow/2010/05/california-ban-on-affirmative-action-in-government-contracts-debated-in-supreme-court.html

[Solomon]

19. White people got more benefit out of affirmative action

than anybody else. That's why there's two three car garage households, gated communities and backyard swimming pools.

People forget, (to be sure, it never entered into people's consciousness because the focus was on what blacks were getting)
that white women were included as a class of people getting affirmative action. The change was tremendous. Where women constituted less than 10% in law schools, medical schools, etc., the percentage shot up to 50% virtually overnight. Now whites have two professionals in the household, earning professional money. That's a phenomenal change.

Nobody, nobody, these days, thinks of white women, as a "minority". Tha's why it really pisses me off when white people complain about affirmative action. White people got the biggest benefit.

Read the current bestseller called "The Help". About maids in Mississipi in the 60's and learn what kind of system we were living in, even after slavery. Even middle class whites had the services of maids, etc. around the clock. Can you imagine having someone clean your house, cook for you and raise your children to boot? Can you imagine the economic value of having that around the clock? Even though you're not rich?

[Lilyeye]

29. Oh boy don't they forget. Whenever I hear my aunt talking against AA I just laugh.

Considering she benefited from it herself.

[Hannah Bell]

36. yep, white women, & particularly upper-class white women.

top 20% gained most from affirmative action, *and* the women's movement.

bottom 50% lost, big-time.

another reason identity politics = dead-end.

plays right into their thieving hands.

unsurprisingly, since they designed it.




little gloria, smith college feminist & spy

http://www.namebase.org/steinem.html

[uponit7771]

46. Statistically true

[Number23]

63. Fantastic post. But I would disagree that white women are not classified as a minority group

I personally don't understand how ANY white person in the United States or just about any Western country could consider themselves a minority (many non-whites would consider this laughable), but white women are considered a minority group.

Actually, I do understand why women of any ethnic group are considered minorities.

[SoCalDem]

5. That $100K is probably "the house"..(edited)

BUT is it really "worth" $100K anymore?

I have a sneaky suspicion that many people have paper-assets that are only "worth" what someone would pay them in an emergency situation, if they had to liquidate in a hurry.

non-whites have traditionally lagged behind because to get a traditional bank-loan you needed assets/collateral, and that's often the kind of thing you get from handed-down , family money

EZ-Credit extended to poor people tends to be little more than soul-sucking, crushing debt that only adds to their problems. Ironically, the middle class now participates in the same "loan-plan".

Any "loan" requires steady income, in order to repay the loan, and poorer non-whites have tended (as a group) to have the fewest of these kind of jobs.

In a micro sense, if your Dad was underemployed or not even in the home, and your Mom dropped out of high school at 16 , it's very unlikely that you will graduate from college and enter the job market with a high paying, meaningful profession.

Prosperity is like a pyramid, with the base being laid down long before you came along, and if that base is never built, each generation has to start all over.

With globalization, came the sad realization that the entry-level jobs that poor/lower-middle-class younger folks could use for a toehold into a career job, went away...forever.

Millions of families that could have had a semi-comfortable middle class existence, never made it there, and the less educated among them got tossed to the side of the road.. It's not surprising that more of them are non-whites, since whites still control the purse-strings of the economy.

EDIT:: Okay if it does not include the house, that 100K is still not a lot to rely on, and if the assets are "non-cash" assets, they are still subject to many twists & turns. Just look at all the people whose 401-ks were great one day, and gone the next..

And, averaging is an odd thing too. If you are unemployed and live on a 2-house road where the other inhabitant makes $1million a year, the "average income" of that street is 1/2 a million..

Think about what an "asset" could be, too.

cars?..they depreciate

insurance policies?..only good if you keep up the payments...or you die

art?.. in the eye (and pocketbook) of the beholder
investments?...only as good as the economy & the people watching the investments

jewels & baubles?..only worth something if you can find a buyer willing to pay what you say they are worth.

People are famous for exaggerating their worth (unless they are asked to pay a tax on what they have)

a houseful of stuff may be an "asset", but just ask any flood/earthquake/tornado/hurricane survivor how those assets fared when the insurance company was finished with them..

[Robb]

7. Reading the article, it seems not:

"The survey does not include housing equity, because it is not readily accessible and is rarely realised as cash. But if property were included it would further widen the wealth divide."

[Statistical]

8. The numbers excluded housing equity. n/t

[TheFarseer]

11. Whites started out richer

That's probably the most important factor. Also, there are worse schools in inner cities where there are more blacks. More black people have become dependent on government programs, which will keep you alive but will never, on its own, get you ahead. Blacks have some disadvantages, on average, but it's not something you can't overcome and it's not a racist conspiracy.

If you think the CEO of Goldman Sacks or Citigroup or whoever gives two shits about me just because I'm white, you are sadly mistaken.

[Dappleganger]

17. Whites have access to better education

and an easier time of getting a small business loan.

[Cresent City Kid]

43. The economic fallout of racism will long outlast racism itselt

That's still in the future, racism still remains. Some of it is in your face, kill 'em all racism, other types are subtle and subconscious. For example, when I was doing surveying I was on a two man crew, me and my boss Odell who is black. A contractor came up to me for information, thinking I was in charge. Would Odell have a fair shot at a supervisory position if this contractor was doing the hiring?

Blacks are subject to a double shot of injustice, racial and economic. It's a complex mix that's hard to sort out. Sometimes they get screwed econonically because they're black, other times they get screwed because everybody gets screwed. There may not be a racist conspiracy, but there certainly was one, the ramifications of which we live with everyday.

[Kurt_and_Hunter]

12. I don't know what they mean by "typical"

White people have, in general, more money. No doubt about that.

But are the figures mean or median? Is typical average or 50th percentile?

It makes a difference because almost all of the super-rich are white. I don't know how much the top 1% drags up the white average.

But there is no doubt that no matter how calculated white people have more money.

[Winterblues]

14. Tell us how not having it would benefit "you" black and brown folk.

:shrug: When has America EVER given a Minority a fair shot?

[The Straight Story]

15. Why are jews wealthier than other whites?

Us non jews have a hard time getting into movies and TV.

It sounds different I suppose when one says it like I just did.

[SwampG8r]

69. jews would not be white

they are semitic
more fairly classified as arabs
if they are included in the numbers used in the OP then the whole premise is silly

[Dappleganger]

16. Two things: Education and small business loans.

That's the ticket.

[scheming daemons]

18. Because the powers-that-be couldn't figure out a way to make them 10 times richer?

...

[fascisthunter]

20. old money

[political_Dem]

25. +10000

How many assets can an average family of color acquire after having the constraints of Jim Crow lifted for 46 years?

[fascisthunter]

44. yup...

[uponit7771]

47. BINGO!! The study bears this out, when a black person is rich most likely their family is not

[Dems to Win]

21. They never got their 40 acres and a mule.

Seriously. Black families were never capitalized. Affirmative action helps blacks make an income more or less equal to whites, but there is very little capital to pass down from one generation to the next. Not much home equity to use to help the next generation buy their first home, etc.

Also, black high-earners often support extended family members. This also prevents them from building wealth.

[classysassy]

35. I am still waiting for my 40 acres and that unruly donkey

My 40 acres and my fertilizer producing mule will be self sufficient in about twenty year,so get that mule here post haste,I've already picked out my 40 acres downtown Phoenix,Az.

[superduperfarleft]

54. This. And this is an excellent argument for long-overdue slavery reparations as well. n/t

[political_Dem]

22. Dupe. I'm sorry. :(

[CLANG]

23. Obviously blacks are lazy and living on the dole of the government (ie: you and me)!!

:sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm:

[Lilyeye]

31. Yeah..according to one poster in this thread...more blacks are dependent on the government

:eyes:

[political_Dem]

24. White privilege, social access and mobility, an uneven playing field, white supremacy, etc.

Red-lining, the denial of loans,the myth of meritocracy,etc.

I'm not surprised by the study.

Remember it's only been 46 years since the Civil Rights Act of 1964 has been passed.

By the way folks have been touting the "post-racial" America, you'd think us folks of color have had 460 years of civil rights. :sarcasm:

[Dr Morbius]

26. I wonder if that "typical" means average.

Because somewhere some white folk are doing phenomenally well, and driving up the average. Trust me, from where I sit, the "typical" American family of whatever color doesn't have $100K in assets.

Now, I am well aware - and kind of steamed - that African-Americans do earn much less than whites. It's ridiculous. I remember when the trend lines showed increasing income equality. That all changed when Ronald Reagan became elected. There isn't nearly enough coverage of this in the media, and few Democrats running for office seem willing to bring it up. Maybe because it's old news; the trend has more or less steadily gotten worse over the last thirty years, with a lessening of the trend under Mr. Clinton.

But my point remains, that although it is definitely true nonwhite Americans have gotten the shaft, many white Americans have also. I really do think there is a small number of people, maybe ten percent of the white population, which is doing SO well they're driving up the average.

I remember two or three years ago the median income was $48K, and the average was over $75K. The median is the middle; half of America at the time was earning less than $48K, and half were earning more. The big difference between the median and the average shows just how skewed income disparity is.

[frustrated_lefty]

27. Asians do well. Mexicans do well. South Americans do well.

East Indians do well. I don't get it. The African American community doesn't make headway in this society. I'm willing to accept that there have been social inequities and that more effort needs to be devoted towards repairing those inequities. Virtually every other racial demographic has managed to make progress in this country, though.

I'm sure this comes off as very racist, but there comes a point when you can't just blame the white guy.

[Starry Messenger]

32. Well, one of those communities was enslaved here for 200 years.

Nearly our entire history of the US a group of people was forcibly separated from any family connection and not allowed to have families or money or education here. Then when they were freed, they were subject to "separate but not at all equal" laws that didn't allow them to participate fully in society.

The other ethnic communities have come here voluntarily and still had the support system of family in their country of origin, not having their entire history erased by forcible capture. There's a ton more to that obviously, and there were laws enacted here to try to limit family members, wives etc. for immigrants but it still hasn't the total ground zero of destruction of culture from slavery. Their point of progress started at a much different place. It's not like Black people just decided to move here to look for work with the Pilgrims.

[Lilyeye]

37. Great points.

Whenever people say "well other groups do better here" they're totally ignoring the fact that the history of black people in America, is different from those groups. You pretty much explained the reasons why. And while trying to point out that everyone does well here expect for black people so it must be all of their fault, that poster totally forgot about Native Americans. They have been shitted on for generations as well and are more worst off than any group. But I guess a lot of it had nothing to do with the government either :eyes:

[tigereye]

57. I think that many immigrants groups (and certainly refugees) come here

without a lot of family support and limited assets. There is substantial poverty in many of those groups. Many folks from Mexico send back quite a bit of money to their families still at home.

from Wiki http://en.wikipedia.org/wiki/Poverty_in_the_United_States
Poverty and race

The US Census declared that in 2008 13.2% of all people, including
- 8.6% non-Hispanic White
- 11.8% Asian-American
- 23.2% Hispanic (of any nationality),
- 24.7% African-American

lived in poverty.

About half of those living in poverty are non-Hispanic white, but poverty rates are much higher for blacks and other minorities. 57% of all poor rural children are non-Hispanic white, compared with 28% of poor urban children.<26>



I do agree with some of the previous posts that history plays a huge part, though. I really think a lot of it it habit- my parents were teaching us about stock clubs and saving pretty much from the time we were little kids. I do think a certain amount of that has to do with them growing up during the great Depression, though.

[Starry Messenger]

58. That sort of underscores my point actually.

"Many folks from Mexico send back quite a bit of money to their families still at home." The people stolen and brought here from Africa will never know their families from "home". :/ I'm wasn't trying to engage in oppression olympics though. I live in CA and I know that the situations that people leave at home from Mexico are often dire. But they come here voluntarily (under great financial duress, yes) and still have their culture and family history in their lives. That's a kind of social capital that can never be replaced. I think I conflated two different things in my post.

[Lilyeye]

59. Thanks for posting these.

Looks like Hispanics are only 1% behind AA people when it comes to poverty. So the poster who said Mexicans were well off, wasn't entirely right.

[SmileyRose]

33. I live in Atlanta - a city with a large well educated prosperous black community.

It can't be ONLY Atlanta.............

[fujiyama]

61. Here too.

I know some doing quite well for themselves - it takes hard work and I know they came from some lower middle class to poor backgrounds.

I also know they are setting a great example for their kids - and not only that both parents are around which I think helps more than most give credit for.

[Number23]

67. Being from Atlanta is probably one of the greatest things that ever happened to me

I grew up in a household where I heard the stories from my grandparent's lips about Jim Crow. I heard my grandfather tell how he and his brothers and sisters growing up in Florida were only allowed to go to school three months out of the year and had to pick cotton the rest of the year. As a result, it was nothing to meet a black kid who was 16 years old and in the 4th grade during that time. Of course, the whole point of Jim Crow and similar laws was to discourage black people so much that they would drop out of school altogether. It's much easier to be subjugated if you are uneducated and driven mad by oppression.

My grandfather was 36 years old when he graduated from Morehouse College but goddammit, he graduated. And he and my grandmother raised five daughters on a school teacher's and postal worker's salary (my grandfather was an Army vet but was unable to find a job when he came back from WWII because of his skin color for YEARS until he was finally hired at the post office to do a job 100 levels below his brilliance). All five of their daughters graduated from college, three have advanced degrees as well. As a child, I was never asked "are you going to college?" I was only asked "WHERE are you going to college." I had black doctors, a black city government, and attended all black schools until I was a 17-year old college freshman which gave me such a strong black self-identity. Growing up somewhere else... I have no idea how I would have turned out.

Everybody black should raise their kids in Atlanta. ;)

[Ohio Joe]

28. Because racism is alive and well in the US - nt

[lumberjack_jeff]

30. Five times?

$5,000 is 5% of $100,000.

Or, $100,000 is twenty times $5000.

[SmileyRose]

34. I call bullshit on the article.

I'm sorry but I do. I'm convinced they pulled the stats out of their butts. Nothing personal.

Of course there is still racism. Black Americans are still overcoming the racism of the past and have a harder time of it because of ingrained racism that still exists. The income disparity is simply fact. But the stats in that article are just silly IMHO.

[Solomon]

39. Okay. If you say so.

Fuck the facts, right.

[Dr Morbius]

41. I'm sorry, I disagree. I don't think they "pulled it out their butts."

I am sure the researchers followed appropriate protocols. If you'll look again, though, you'll see it's a very small sample. They looked at only 2000 families, far too few to make any definitive statisitical pronouncements in a nation of 306+ million people.

[Raineyb]

45. You can call bullshit all you want. It doesn't make the stats wrong.

And unfortunately the stats are not wrong.

[Lyric]

38. Because America is racist as hell?

:shrug:

Seems obvious to me.

[eShirl]

40. the justice system is slanted to funnel young black men into the prison industrial complex

[Name removed]

42. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[ecstatic]

48. If the stat is true, I blame the unfair loan practices

I know several mortgage brokers who admit that black customers get higher interest rates than white customers who have equal or lower credit scores. Interest rates play a large role in how much debt a person carries.

[uponit7771]

50. Yeap and one of the reasons for the CRA, I had a VERY similar experience using Country Wide and was.

...pissed because the underwriters checked out credit over and over again creating hits against it and lowering the score then our second mortgage went up LITERALLY overnight and this happened AFTER we marked "black" on the loan form.

The .5% increase on the second pissed us off to no end and the loan officer sat on the phone explaining to my wife and I for 30hr why they "had" to do this...

[FLAprogressive]

56. don't forget all of those payday loan places that run rampant in inner cities

[fujiyama]

62. I remember hearing about some blacks either being denied or charged higher rates

even when they had the income to back them up.

Racism rears its head in a lot of ugly ways that most people have no clue about.

[Lagomorph]

49. Big head start...

As long as those "rich" practice staying rich, they'll keep building up assets. Buy a home, buy land, buy securities, invest carefully, pass as much as you can from generation to generation.

For many blacks, not so much individuals, as families, acquiring wealth would put their stability in doubt, since it could disqualify them for incentive programs.

It's not hard to find black individuals who've pull themselves out of poverty, but don't have the resources to invest in a multi-generation wealth building program.

[earth mom]

51. I call bullshit on this story. It's nothing more than a wedge to keep everyone fighting

against each other.

[superduperfarleft]

53. LOL. What a white thing to say. n/t

[Xithras]

52. Serious answer? Read this article..

It's a bit dated, but it gets into some of the cultural differences between blacks and whites in the U.S. It also doesn't explain the entire gap, but does provide reasons why minorities tend to have fewer assets and investments. Here's an excerpt:

On race, the folk wisdom turns out to be true. An African American family with the same income, family size, and other demographics as a white family will spend about 25 percent more of its income on jewelry, cars, personal care, and apparel. For the average black family, making about $40,000 a year, that amounts to $1,900 more a year than for a comparable white family. To make up the difference, African Americans spend much less on education, health care, entertainment, and home furnishings. (The same is true of Latinos.)

...

To test this idea, the economists compared the spending patterns of people of the same race in different states—say, blacks in Alabama versus blacks in Massachusetts, or whites in South Carolina versus whites in California. Sure enough, all else being equal (including one’s own income), an individual spent more of his income on visible goods as his racial group’s income went down. African Americans don’t necessarily have different tastes from whites. They’re just poorer, on average. In places where blacks in general have more money, individual black people feel less pressure to prove their wealth.

http://www.theatlantic.com/magazine/archive/2008/07/inconspicuous-consumption/6845/

The article isn't as much about race or culture as it is about relative wealth levels and how cultures choose to spend their money. All cultures go through phases as their standard of living increases, and personal or "nonvisible" investments tend to be one of the last things that people spend their money on.

It's an interesting article if you can divorce the anthropological analysis of American culture from your political viewpoints.

[FLAprogressive]

55. Poorly-funded black majority schools -- predatory lenders in inner cities (those payday loan places)

[fujiyama]

60. A few reasons

History - Slavery/Jim Crow. Obviously everyone knows the story. Wealth begets wealth. Generations of enslavement and the discrimination that followed have taken its toll. Discrimination against blacks is also higher than against other races (and higher among other races - take a look at the Latino/AA fighting in LA for example).

The areas where large numbers of African Americans live (i.e urban areas) have collapsed economically. Few business opportunities exist.

Education - goes hand in hand with the second point - public schools are completely and wholly inadequate in urban areas. They have not been preparing AA youths for higher paying careers. Likewise, I think in those areas, the emphasis and even the value of a good education is lost. After all, if you just see crappy conditions around you, how can someone feed you some bs Horatio Alger myth and expect you to believe it?

Finally, a few points that I think some will get angry about - some may even accuse me of racism here - but I think part of it is cultural. I think the traits that have been especially strong among some ethnicities - like a high emphasis on education and a strong family structure haven't been there. Many liberals hated what Moyhnahan had to say in the seventies, but there are fewer households now with two AA parents raising a child than there were when the report was issued. The bonds just haven't been cohesive. I think it's obvious that it's tougher for a single mother to raise several kids in a rough neighborhood - while working several jobs in some instances to support those kids. A parent just can't be there all the time. It's no wonder in such a case that a kid would slip into drugs or violence when parents and other authority figures aren't around that can be looked up to.

[HiFructosePronSyrup]

64. "some may even accuse me of racism her"

Well, you are promoting innane racist stereotypes.

[Number23]

68. I grew up in a single parent household in a predominantly black, inner city community

I have two college degrees, including a Master's degree from an elite university.

I work in a very competitive, selective field and make damn good money.

I have never done drugs and don't know anyone (black) who has. (When I was a kid, it was a widely held belief that it was only white folks that could do drugs, even weed. Black kids doing drugs just made the targets on our backs that much bigger.)

I have traveled the world, am happily married, and am the mother of two beautiful little girls.

I understand what you're trying to say, but scapegoating single parent households or inner city households as the reason for society's ills will make me come down on you like rain. My upbringing was not without its challenges, but I wouldn't trade it for anything.

[DefenseLawyer]

65. Inherited wealth

There's a lot of it.

[Name removed]

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