Racial Wealth Gap Widens

Recently in the Washington Post,  Meizhu Lui, director of the Closing the Racial Wealth Gap incense and moneyInitiative,  notes the widening racial wealth gap in the U.S. (Creative Commons License photo credit: Kevin Cortopassi ).   Citing the Federal Reserve’s new report Survey of Consumer Finances,  Lui writes:

The gap between the wealth of white Americans and African Americans has grown. According to the Fed, for every dollar of wealth held by the typical white family, the African American family has only one dime. In 2004, it had 12 cents.This is not just a gap. It’s a deepening canyon. The overhyped political term “post-racial society” becomes patently absurd when looking at these economic numbers.

In her thoughtful and well-researched piece, Lui mentions a couple of pieces of social science research about this racial wealth gap.   Given that owning a house is the surest path to wealth for most Americans, she notes the racial disparity in the kinds of home loans whites and blacks have access to, citing a Harvard University study showed that in Massachusetts, a high-income African American was more likely than a low-income white borrower to get a subprime loan.

The other research Lui points to is one that highlights the structural advantages that whites have historically been given in housing: in Ira Katznelson’s “When Affirmative Action Was White.” In his research, Katznelson examines the white advantage built into the GI Bill after World War II in which white GIs received government-subsidized home mortgages, but soldiers of color were excluded. Of the 67,000 mortgages issued under the GI Bill in New York and northern New Jersey, 66,900 went to white veterans.

That’s how structural inequality in home ownership – and then, in turn wealth – gets put in place and reinforced.  Through policies that systematically benefit whites and harm people of color excluded from those policies.   Undoing those structural advantages is going to both a clear understanding of racial inequality and a concentrated effort to dismantle it.


  1. Mike

    However the facts may be, I feel these questions need to be considered:
    How does this help the problem? Can these cold-hard facts really help the situation? Does this research tell the whole story? What does it leave out? Can this research do harm? Is it possible to convince all people that this is really happening? What and who are the exceptions? What about those exceptions? Will government spending do more harm than good? What else needs to be considered? Did the researcher find what he/she was looking for? Was anything he/she found that they were not looking for?

    I don’t mean to make the research invalid, as it is valid and may hold truth in it, but we need to ask these questions, else we are preaching to the choir, talking to a brick wall, and will not getting anywhere with our personal vendettas and our rational avarice.

    People are not machines. Even if we can be “programmed” a certain way, we are still more complex than numbers and controlled forms of thought.

  2. siss

    Very good point Mike.

    We are aware of the inequalities that exsist, but we’ve known this for years…any solutions to fix them? Besides the played out answers like “dismantle structural racism”. <- That’s a given. Very few are willing to lay it out in a clear agenda.

  3. Bridget

    I was wondering if the book by Katznelson had information on how many non-whites applied, and were denied, GI Bill loans? Or if there is other evidence given in the book about ways in which non-whites were discouraged from pursuing these loans?

    I assume some of it would be due to redlining, but wanted to know what other processes were operating to create those staggering differences?

  4. Bridget – yes, it gets into all that. Or, at least claims to do so.

    Now, I hope I don’t step on any toes, but to Mike – I find your “questions” a bit insulting. The research is good. It’s the same research that’s been found time and time again.

    The answer to the problem is to uphold the law which makes such discrimination illegal. And if it’s not illegal, it should be. And just on it’s own, the research seeks to explain why it seems blacks don’t have the discretionary funds that whites have or why blacks don’t save at the same rate or why you can always tell the difference between a black neighborhood and a white neighborhood by the grass.

    Most importantly, the info and research is necessary because all too many people deny racism. They deny racism then say blacks spend too much, don’t care how their houses look; that it’s black people’s fault that there’s a gap in wealth, etc and so on. They basically deny racism, then go on to repeat racists myths.

    Which is why, I suppose, I find your questioning insulting. I’m tired of people chalking up anti-racist activities to revenge and vendettas. No. Racism exists, and too many people deny it. And as we all know, the first step to solving a problem is acknowledging its existing. If you are anti-racist, why not come up with ideas at solving the problem yourself? Since no one has to convince you that such problems exist?

    So, Mike, to finish answering your questions – yes, the cold hard facts tell the entire story. It’s been routinely found the even with similar or equal income, downpayment, credit rating, etc and so on, blacks still end up paying more for a mortgate than whites. Look it up.

    Oh, and don’t take it personally. It just bothers me when people don’t question, for example, that so few blacks own homes. But then when you start explaining why, starting debunking some racist myth, all of a sudden they want proof. And recently, I’ve found my response to be that since I’ve done the hard work and research, how about you do some work and either find the proof yourself or prove me wrong.

  5. Mike

    N01KState- I really am not being insulting, I am merely asking questions because too often we see statistics as answers, and see experts as “holy preachers.” If I do seem insulting, I am sorry for your feelings, but I am not sorry for what I say. Yes, I believe racism still exists, but racism is more complex than a simple “us vs. them” scenario. I do understand these concepts, and I do see where research is true. However, in my opinion, this research is too often used for an agenda of some sort because, if anything, it stereotypes people into a series of numbers and data. That to me does not help humanity, nor the situations it addresses. The research, no doubt hard work, shows merely an expectation of humanity that may or may not be substantial. Because the researcher is more concerned with showing this data, no one is able to know if that particular researcher is putting in work to help these people find homes. What we see is merely representations of humanity, or a scientist deconstructing the world around them with hope that people will look at it and suddenly become aware.

    Please do not confuse questions with disagreement. If I were disagreeing with the data, then I would need data to back it up. For the sake of hypotheticals, though, if I were to find proof, I might be able to find it. However, I do not have proof, nor do I have interest to seek that proof. That is my honest stance, and if you think that is a dishonorable stance, you have the right to your thoughts. For me, there are only more questions to consider and living to see how those questions play out. As I stated before, I am sorry you felt insulted by my questions, but I am not sorry for my questions and my opinion. I do not think I’m in the right, I am well aware racism exists on a number of levels, and I will continue to challenge ideas and concepts whenever I see fit to.

    On a lighter note, thank you for your honesty and astute observations. Though we may not see eye to eye, know I have nothing against what you think is necessary. Keep up the good work.

  6. Mike

    siss- Sorry for responding to you last. I must say that I do not have any solutions that will immediately become available, nor will I ever. I believe jumping into something, trying to fix it as quickly as possible, only makes matters worse. I understand that makes me a little conservative, but I think slow, steady solutions help out more than quick solutions.
    And as far as solutions concerned, the solution I found more substantial for myself is to live my life, knowing when to pick my battles, and knowing that I’ll often times lose those battles. So, it is often times better, for me, not to fight but to listen to what I am capable of. None of us are Superman. I think this “power language,” for lack of a better term, only makes us blue in the face, using energy that can be best used in other situations.
    Anyway, before I start rambling like I usually do, I’d like to say thank you for your kind reply. I don’t think I make good points, and there are times I’m not so sure about my own questions (bad humor). But thank you for stroking my ego… (more bad humor). Live happily.

  7. Mike – Fair enough. And like I said, you probably felt the brunt of my frustration with . . .

    Ok. Here’s the thing. Yes. There’re people in our community who care nothing for education. Who would only be better educated criminals/drug dealers/whatever if they were educated. There’re people in our community who actually believe it’s better to rent a home than buy one. All of that is true.

    But so what? Really. Should the criminals in our community make people in general afraid of the men who’re innocent? Should the relatively few who never pay their bills effect the ability to get a loan of a person who’s credit rating is above 700? The answer to both questions is no, right?

    And here’s why I think the statistics are important, even if we just have them for the sake of having them. For a community that has been historically de-humanized, these numbers, albeit in a strange, mysterious sort of way, humanize us. Right? Stats like these demonstrate that we want homes just as much as anybody. We want to take care of our homes and yards just as much as anybody. We want to send our kids to college, help with downpayments, etc and so on, just as much as anybody. So, what’s holding us back? It’s not us. Considering our circumstances, our-story is something to absolutely marvel at. We’ve come enormously far in an extremely short amount of time. Anytime we were given an honest and equal shake, we shine.

    That’s the point of the statistics. Don’t get me wrong. With any other group in any other circumstance, I’d agree that numbers sometimes only serve to assist in stereotyping people. But these numbers belie the stereotype of black people. That’s why they’re so important.

    And, if I may be so contrary in my own way of thinking through the world, this “us vs them” has largely be used against us throughout history. On the whole, very few blacks find “us vs them” ideal and few of those who do find it practical. But, “us vs them” does serve the purpose of farther dividing blacks and whites. I know that’s what you want to avoid. What I’m arguing is that it’s not blacks using these stats to further an “us vs them” agenda. Blacks have used stats like these to say, more or less, “Look what I/we can do/be when you give us the same opportunities you give yourselves. Stop being racist against us.” Right? It’s historically been white people who use these numbers and immediately revert to an “us vs them” sort of thinking. I’m a historican so this information is easy for me to access mentally. Even if you’re not a historian, if you think of what you know of black history, you’ll see what I’m trying to say. Oh! I does help to know that the years immediately following the Civil War, actual black criminality was nill. 99% of crime was committed by whites, in particular, former rebel soldiers. But, the South had just discovered yet another way of enslaving black people – arrest them, convict them, “lease” them out to a coal company. Check 0ut Douglass Blackmon’s Slavery By Another Name.

    So, now that the immediate annoyance I felt has dissipated, I can explain myself better. I won’t argue about whether or not it’s important to ask questions. “Yes,” if you honestly don’t know; “no” if you’re seeking to excuse/enable more racism. That’s how I kind of look at things. Because for me, these questions have been asked, answered, and asked again. And if you think about it, sometimes these questions are asked for a particular purpose and not actually seeking an answer.

    So. While I’m not sorry for my point, I guess I should apologize for the way I expressed it. Now that I feel that I have a very good sense of the way “racism” operates and is played out, I have very little patience for enabling what I know operates as continual delay of justice. As you said, racism is complex. Stats like these serve to battle racism on an intellectual level – which is helpful because what can be shown logically can be enforced legally. I’m being cute with my words, but if you can show that blacks are paying more for loans due to racism, then there are things we can do to remedy that without addressing people’s “feelings.” To paraphrase MLK, I can’t make you want to live beside me, but dogonnit I can make you give me the prime loan I qualify for!

    And here’s some irony for ya! My biggest problem with “questions” about stats like these is that they always assume down about black people. If folks read these stats and assumed up, then I think we’d get a different set of questions. The irony here is that I read your comment and assumed down. Er, my bad.

    And to address the question you and Siss have – I do agree that racism as a whole is something we’ll have to take apart piecemeal. It’s so engrained in our society, even Jesse Jackson’s admits to some anti-black feelings! Right? The way I see is that we have to confront racism on all battle fronts. With stats, with questions, with performance, etc and so on. And even though we have to fight racism piecemeal on a practical level, I do think one front of the “battle” is to fight racism rhetorically on a large scale. That make sense?

    Oh. And front what I can see, stats like the widening gap in wealth accumulation are usually used to argue for reparations. That should, I think, answer one of your questions. You know, it’s one thing to say there’s nothing the country could ever do to make up for slavery and neo-slavery (Jim Crow). But no one can deny emperically that some money is owed. These particular stats prove that.

  8. Seattle in Texas

    I just wanted to say there’s such a great dialogue above (and did not want to interefere or disrupt the flow). But if I may, to Mike, the article came to mind that might address some of the questions too in a round about way (while not focused on racism, it certainly can apply to some of the questions and accents points made by No1Kstate as well). Here is the citation if interested (the title etc., sounds off track–but think interdisciplinary here):

    Brookfield, Stephen. 1993. “Self-Directed Learning, Political Clarity, and Critical Practice of Adult Learning.” Adult Education Quarterly, 43(4): 227-242.

  9. Mike

    N01KState- Thank you for your stance, though to be honest, I do not share it. For me, though I value the stories history tells, history has been nothing more than a means to solve the unanswerable “human problem.” For me, knowing the past does not keep us from repeating it. I do not excuse racism, nor do I excuse institutions that bring this forth. Though intellectual departments such as statistics bring forth objective understandings, they can, on a subtextual level (also, for lack of better phrasing), be easily manipulated to dehumanize anyone.

    For me personally, I don’t learn by dates and numbers. I can understand numbers, even utilize them. However, I learn more by conversing with people and seeing both opinions. And as I said before, I do not deny this information, but I do have to ask the question: What is the message? And yes, I feel all questions must be asked, even if the initial agenda is to excuse and enable racism, and everyone needs to have their say on the matter of this information. This is not to say I value that kind of thought or agenda. I would no more value the agenda against a person with black skin as much as I would value the agenda against a person with white skin. What I do find value in is a freedom of thought and ideas, no matter how obtuse they may be. Everyone has there say for or against something, as long as no one keeps anyone else from saying what they are for or against. It’s okay to change a person’s perspective, but we must at some point be content that some people will not change their perspective, and they should not be forced otherwise.

    And to be even more horribly honest, I do not believe money is the solution to any problem, and neither is a law. That, in my personal perspectives and beliefs, is a quick solution that will only result in more problems. It is shown throughout history: the law to end slavery, though noble in itself, erupted with many more difficulties; laws to end segregation were not perfect by any means. My point is this: if we are going to lift any human being up from their current impending situation, in my opinion, we need to stop throwing money at it and need to stop manifesting ideals we expect every human being to follow.

    Other than that, I thank you for your response, and for allowing me to freely initiate my response. Also, I would like to apologize for one more thing: I have a varying interest in questions, and it is something I continually wish to express.

  10. History isn’t about dates as much as it’s about time. I’m a historian and only know the most important or interesting dates. Everything I know a general timeline.

    Now, I do believe that we can learn from history. Knowing history won’t prevent you from repeating it; learning from history does. There’s a difference.

    And to paraphrase someone else, everyone entitled to their own opinions, but not their own facts. No, money and law won’t change hearts and mind. But it will change power and opportunity. That’s what matters.

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