The Huge Racial Wealth Gap: A Systemic Analysis



On Tuesday, July 26, Pew Research Center published a report entitled “Wealth Gaps Rise to Record Highs Between Whites, Blacks, and Hispanics.” In the study, calculating wealth as the accumulated sum of assets minus the sum of debt, the authors report

The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households. . . . These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago.

Pew attributes their finding to the fact that “Minority households largely depend on home equity as a source of wealth” and “the housing market has yet to recover” from the housing bust which began in 2007. However, this explanation fails to explain the magnitude of racial wealth disparities. To adequately analyze the racial wealth gap, one must explore America’s history of unjustly enriching whites.

America’s history has been one of unjustly enriching whites and impoverishing people of color. Sociologist Joe Feagin (2006; 2010) defines unjust enrichment and impoverishment as “the unjust theft of labor or resources by one group, such as white Americans, from another group, such as black Americans.” According to Feagin (2010):

For over fourteen generations the exploitation of African Americans has redistributed income and wealth earned by them to generations of white Americans, leaving the former relatively impoverished as a group and the latter relatively privileged and affluent as a group.

This story of exploitation by whites has long been the story of American economics. In his discussion of black exploitation and the American centuries old “racial classes,” Oliver Cox (1948) argues, whites decided “to proletarianize a whole people.” In doing so, whites established a socioeconomic system centered on syphoning the labor and resources from melaninated bodies and placing it into white America. Supporting this claim, in his analysis of the development of the American economic system, Feagin argues (2010):

It is unlikely that the American colonies and, later, the United States would have seen dramatic agricultural and industrial development in the eighteenth and nineteenth centuries without the blood and sweat of those enslaved…Without slave labor it seems likely there would have been no successful textile industry, and without the cotton textile industry–the first major U.S. industry–it is unclear how or when the United States would have become a major industrial power.

Here one sees just how integral the theft of labor was for American economics. Whites needed to prey on minorities to create a nation in which amassing great wealth was possible. Without stealing the labor and resources of people of color, it is very unlikely America would have ever prospered. However, continuously reinvesting the wealth accumulated on the backs of the enslaved in new economic and industrial ventures created the prosperity enjoyed in the modern United States–particularly by white Americans. The wealth that was not reinvested, was often passed down familial lines in the form of inheritance which many white Americans benefit from today. Using the concepts of unjust enrichment and impoverishment, one gains more insight into Pew’s data on the racial wealth gap.

Reviewing the new data on the racial wealth gap, one sees just how unequal wealth is distributed across races in America. While the housing bust of the last 4 years is a clear factor in the amount of wealth accumulated by Americas, it is not that minorities have most of their wealth in home equity that causes the racial wealth gap. The key is that whites do not and why. As Pew reports, “A higher share of whites than blacks or Hispanics own stocks–as well as mutual funds and 401(k) or individuals retirement accounts (IRAs).”

The ability to acquire such means of wealth dates back to the founding of America. From first contact with people of color, whites have established a system of stealing resources and labor from the racialized “other” and placing it in white America. Due to centuries of this practice, whites have been able to accumulate great sources of wealth outside of home equity. Furthermore, whites have often monopolized certain sources of wealth and more importantly sentenced minorities to generations of impoverishment. The neglect of America’s history of unjust enrichment and impoverishment is a major hole in Pew’s report. Without contextualizing wealth in America, Pew is only telling half of the story. The practice of stealing resources and labor from people of color and placing into white America is central to why whites have been able to amass such wealth and must be considered if one is to honestly discuss the racial wealth gap.

References:
Cox, Oliver C. 1948. Caste, class, & race; a study in social dynamics. Garden City, N.Y.,: Doubleday.
Feagin, Joe R. 2006. Systemic racism: a theory of oppression. New York: Routledge.
Feagin, Joe R. 2010. Racist America: roots, current realities, and future reparations. New York: Routledge.

Comments

  1. cordoba blue

    I just woke up and read that Standard and Poors downgraded America to an AA credit rating instead of AAA. It said it didn’t think Congress did enough to monitor our deficit spending. Duh! Then the article stated maybe this will spur Congress to move more efficiently on addressing our economic problems. Then it said both parties’ reactions were to assign blame to the other party.
    I don’t know if this subject fits here, but since nobody’s commenting on our economic crisis, I thought it was relevant. First,in my entire life I’ve never seen such mind-bending animosity between the two parties. I’m literally surprised somebody hasn’t brought rotten tomatoes into the capitol and started throwing them at each other. And why is this? Hmmm. Let’s take a remote guess.
    It’s because President Obama is black. I know it in my heart. Congress is so uncomfortable with a black man in the Oval Office it’s manifesting itself in every which way but calling Obama a racial slur. It’s translated into such iron-clad partisanship that the country can’t even move whatsoever. If a nuclear attack was imminent I think they’d be arguing over which migs to use to counter the attacks. White America just wasn’t ready for an African American president. Which absolutely puts the certified stamp on Yes, we are still a very racist society.

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