On May 18, 2010, at 10:53 AM, Eric Beck wrote:
> On Tue, May 18, 2010 at 9:47 AM, Doug Henwood <dhenwood at panix.com>
> wrote:
>>
>> On May 18, 2010, at 10:39 AM, Eric Beck wrote:
>>
>>> A $95,000 question: why are whites five times richer than blacks
>>> in the
>>> US?
>>
>> Inheritance, mostly.
>
> Really? I wondered if that accounted for it, but didn't dig into it
> too much. I knew that income differential hadn't increased that much.
It's not just about income differentials - it's a long-established fact that even at the same income level, white wealth is far greater than black. Here's what I wrote on the topic in After the New Economy:
> Unfortunately, the major published reports on the SCF (Kennickell at
> al 2000; Aizcorbe et al 2003) divide the population is only into
> "white non-Hispanic" and "nonwhite or Hispanic" (and there's no
> gendered reporting at all). But there too, the wealth figures are
> stunningly more lopsided than income figures. In 2001, the average
> "white" household had an income 76% higher than that of the
> "nonwhite or Hispanic" household in 1998 — but had a net worth
> (including residence) over seven times as high. Both numbers are
> significantly higher than they were in 1992 — broad racial gaps have
> widened.
>
> Wolff (2000) provides a lot more detail. For example, black incomes
> were 54% of white incomes in 1998 — but black net worth (including
> residential) was 12%, and nonresidential net worth, just 3% of
> white. For Hispanics, incomes were 62% of white; net worth, 4%, and
> nonresidential net worth was 0%. Just under 15% of white households
> had zero or negative net worth, compared with 27% of black, and 36%
> of Hispanic. Even at similar levels of income, black households were
> significantly less wealthy than white ones; black households in the
> $25,000–49,999 income bracket had net worths equal to 46% of white
> averages; those in the $75,000+ category, 29% of white. Similarly
> with stock ownership; 54% of white households had some, but just 30%
> of black. And average black stockholdings were just 20% of white.
> The democratization of ownership has a way to go yet.
>
> Wealth is an important part of the economics of race in America: it
> "sediments" privilege and deprivation (Oliver and Shapiro 1995, p.
> 5). Though blacks in general have much lower incomes than do whites,
> there's a vast racial wealth gap between households with otherwise
> similar demographic characteristics (like education and income). The
> reasons aren't hard to fathom: the first African-Americans weren't
> merely forbidden to accumulate property, they were property — but
> even after Emancipation, discriminatory laws and practices prevented
> blacks from accumulating wealth and passing it on to their children.
> So even middle class blacks don't have the benefit of spare change
> in the bank to take advantage of a business opportunity or to
> survive a bout of sickness or unemployment. This has long been
> compounded by continued discrimination in mortgage and housing
> markets — which persists statistically even after income and other
> demographic factors are accounted for — denying many black Americans
> access to that major component of middle-class wealth, the owner-
> occupied house.