New research confirms the persistent income gap between blacks and whites. The troubling twist is that today’s lack of mobility makes closing it harder than ever.
We approach Labor Day at a fraught moment in the American experiment.
Although the economy has finally made up all the jobs lost from the Great Recession, and those that would have been created had it not happened, few are celebrating. Inequality is worse. Entire vocations and professions have become obsolete. Most wages are rising slowly if at all.
This is especially true of the persistent gap between whites and most minorities, especially blacks. An extensive new study indicates that it has worsened since the turn of the century, cuts across all skill and education levels, and has hardened into severe economic immobility.
We’re not merely economic actors, of course. The nation seems more divided than any moment since the eve of the Civil War. The Trump presidency has broken norms. And race relations, despite two terms of the first African-American president, appear to be at lows not seen in some time.
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White supremacists are on the rise. White identity likely played a much larger role in Donald Trump’s election than simply the white working class “left behind” by neoliberal economics. Even many whites who disavow the overt racism of the Charlottesville riot bridle at the notion that they are monolithic and have unearned “white privilege.”
We’re all unique individuals, burdened by history. If we split into exclusive and hostile tribes, e pluribus unum will never succeed. “We must learn to live together as brothers or we will all perish together as fools,” Martin Luther King Jr. said.
Still, the economic divide between most whites and African Americans is undeniable. It ultimately hurts the entire nation.
Before getting to that, it’s incumbent on any writer in this age of instant social-media-driven “knowledge” to emphasize how far we’ve come. Many young people, understandably concerned about police shootings of black citizens, don’t know the progress.
Slavery, Jim Crow, lynchings, legalized segregation, keeping African Americans out of the best-paying jobs and the mainstream — all this was overcome.
As of 2015, some 23 percent of black adults had bachelor’s degrees or higher, compared with 4 percent in 1964, according to the Pew Research Center. Almost 89 percent had a high-school diploma, vs. 27 percent in 1964. Median black household income totaled $43,300 in 2014, up from $24,700 in 1967 (measured in 2014 dollars).
Still, that same Pew report from last year showed that blacks trailed whites by every indicator.
For example, the median household income for whites in 2014 was $71,300. Blacks are also twice as likely as whites to be in poverty. The gaps have persisted throughout the measurement period, through Republican and Democrat presidents and congresses.
The new study by scholars at UCLA and the Census Bureau adds some compelling details.
They examined restricted Internal Revenue Service tax data, matched with census data (both privacy-protected at the individual level), to produce a novel look at the racial divide and inequality. The data cover 2000 and 2014.
One of the startling conclusions is that at every point of income distribution — wealthy, middle or poor — gaps persist between the percentage of whites and Asians at the top and other ethnic groups at the bottom. Another finding is that the problem manifests itself broadly despite the skill level or education of the individuals.
In the mid-20th century, incomes for all Americans were growing together. Since the 1970s, they have been diverging. This study argues that not only did inequality worsen between 2000 and 2014, but “there is a high rate of (income) immobility for all groups in general.” It’s worse for most minorities.
One cause appears to be the Great Recession and the slow and uneven recovery. Rising inequality has been “entrenched” by the lack of mobility, the authors argue. The recovery also most rewarded the highest earners, where blacks are much less represented. I would add the loss of middle-income jobs, and hence ladders up for wage-earners.
The study also found that in most cases, “blacks, American Indians and Hispanics had income that is, at best, about two-thirds that of whites and, at worst, half the income of whites.”
The conclusion is that class alone is not an explanation. Race matters.
In the white-black divide, ideology inevitably dominates the debate about its causes.
Conservatives criticize what they see as an oppositional gangsta lifestyle of some blacks, that they are “takers” dependent on social programs that, in their view, have made the situation worse. “Look at the Asians, get to work and stop complaining,” is a persistent theme.
The newly energized left paints America as a uniquely evil racist nation, keeping blacks in the “new slavery” of prisons and sanctioning legal execution of innocent African Americans by the police. Their arguments are made with weaponized terms out of academia, such as white privilege.
What’s undeniable from an economic perspective is that African Americans faced singular challenges in building and sustaining wealth.
Brought here in bondage, they were not compensated for their slave labor. Under Jim Crow, most were relegated to sharecropping and menial labor in the South and elsewhere.
Some segregated black towns or sections of cities became quite prosperous — but this often seeded white jealousy and destruction (such as the 1921 Tulsa race riot). Migrating north for manufacturing jobs in the 20th century, blacks were often met with hostility and, if hired, were paid lower wages.
Redlining of neighborhoods to keep blacks out of white neighborhoods, and often out of homeownership entirely, was backed by federal policies from the 1930s into the 1960s. Most families’ wealth comes from their homes, and blacks were denied this wealth-building asset on a massive scale.
Yet another study, by William Collins and Marianne Wanamaker, employs data back into the 19th century to show how black sons have been significantly less likely than whites to hold higher-earning jobs than those held by their fathers.
As legal segregation ended, whites fled to new suburbs, subsidized by freeways and federal loan guarantees. Businesses followed them there. In many cities, blacks saw their jobs moved far away to suburbs lacking public transit. Black children were marooned in poorly funded schools.
This long history made intergenerational transfer of wealth much more difficult for black families. Then we all arrived in the new century where, if the data and other research are to be believed, the old ability for Americans to get ahead has been stymied.
Unless we find a way out of this gyre, our economy will underperform, with lost customer dollars and talent that’s never unleashed.
Unless we find a way out, we face worse than money can measure.