[lbo-talk] A $95, 000 question: why are whites five times richer than blacks in theUS?

Wojtek S wsoko52 at gmail.com
Wed May 19 05:47:48 PDT 2010


shag: " the business you can or can't start, the investments you can or can't make,"

[WS:] I think there is more into it than simply can/can't. A big factor is the size and other characteristics of the potential market. Given a high level of market segmentation by race/ethnicity, black-owned businesses not only have a much smaller (an poorer) market than whites, but they have to compete with other non-white businesses (Korean, Indian, Hispanic) for the same market. Or looking at it from another angle - it is difficult for a "black" business to cater to the "white" market, just as it is difficult for a "white" business to cater to the "black" market - however that difficulty is much more onerous to a "black" business than to a "white" one due to the characteristics of their respective market niches.

Wojtek

On Tue, May 18, 2010 at 10:31 PM, shag carpet bomb <shag at cleandraws.com>wrote:


>
> isn't it really as simple as: your grandma bought a house for 10k and
> it is now worth $500k, when you sell it after her death. your mom and
> day had a similar dealio, socking away 500k after they sold it. plus,
> they had their savings and the life insurance policies.
>
> now, you "inherit" "wealth".
>
> this makes a massive difference in your life, the decisions you make,
> the colleges you can attend or send your kids to, the business you can
> or can't start, the investments you can or can't make, the house you
> can or cannot afford, etc.
>
>
> > James Heartfield writes:
> >
> >> income differential is enough to account for the difference
> >> in ability to save and raise a mortgage on a house, the climbing
> >> value of which, I would guess, is the reason for the difference
> >> in wealth (i.e. fixed assets, not income).
> >
> > The study specifically excluded housing wealth, but nice to see that
> > you
> > even read the article -- let alone the paper itself.
> >
> > I've seen a lot of claims that it's as simple as missing out on the
> > last
> > few bull markets over the last 20 years: Whites participated and grew
> > wealthier; Blacks didn't. I've also seen some speculation about "the
> > culture of investing" and whether Blacks, as a group, "trust"
> > investments. It seems like there's a lot of reasons, none as
> > slam-dunk
> > as Doug's "inheritance, mostly" claim. If it was "mostly"
> > inheritance,
> > you'd have to believe that the difference between the two groups from
> > start to finish is that the White group had someone with some wealth
> > die
> > during the 20 year period. So while I'm sure there's some of that, it
> > certainly doesn't seem clear that it's "mostly" any one thing.
> >
> > The most alarming thing to me was that it used to be the case that
> > high-income Blacks had more wealth than middle-income Whites but
> > that's
> > no longer true. That seems really crazy.
> >
> > /jordan
> >
> > ___________________________________
> > http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
> >
>
>
> --
> http://cleandraws.com
> Wear Clean Draws
> ('coz there's 5 million ways to kill a CEO)
>
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>



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