Inequality in Black and White

The rigged economics of race in America, in five studies.
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(Photo: David Goldman/AP/Corbis)

(Photo: David Goldman/AP/Corbis)

For the past few years, Americans have been engaged in two big public conversations about inequality. One is about economic insecurity (stagnant wages, wealth concentration, Occupy Wall Street). The other is about racial inequality (incarceration rates, police brutality, disenfranchisement). Often, these two discussions are kept separate, but they are closely intertwined.

The economic trends that have battered Americans have been exceptionally hard on African Americans, making them perhaps the truest face of economic inequality. Much of the progress in the workplace and in schools that African Americans have made since the 1964 Civil Rights Act has now ground to a halt, or worse. Blacks are nearly three times as likely to be poor as whites and more than twice as likely to be unemployed. Compared to whites with the same qualifications, blacks remain less likely to be hired and more likely to earn lower wages, to be charged higher prices for consumer goods, to be excluded from housing in white neighborhoods, and to be denied mortgages or steered into the subprime mortgage market. Racial disparities in household wealth haven’t just persisted; they’ve increased. What’s more, the reasons for these divergences aren’t always outwardly apparent or easy to understand.

1. INHERITED WEALTH IS A MAJOR DIVIDER

The economist Thomas Piketty has shown that the growing concentration of inherited wealth is a huge driver of economic inequality. This trend shakes out especially badly for African Americans. When the researchers Robert Avery and Michael Rendall looked at inherited wealth across three generations of Americans, they found a substantial gap between blacks and whites. What was especially troubling was that, contrary to narratives of racial progress, the gap was even larger for the Baby Boomer generation than for earlier generations. Inheritance disparities, write Avery and Rendall, “threaten to become a source not merely of slowed convergence in economic status, but of divergence in overall economic status between black and white Americans.”

—"Lifetime Inheritances of Three Generations of Whites and Blacks," Robert B. Avery and Michael S. Rendall, American Journal of Sociologic, March 2002

2. RACIAL DISCRIMINATION HAS GOTTEN SNEAKIER

Most Americans now repudiate overt forms of discrimination. But “implicit prejudice” is still rampant, according to a 2008 paper. In personal interactions, the economic lives of black Americans are still marred by “forms of racial bias that operate without conscious awareness yet can influence cognition, affect, and behavior.” And on the institutional level, structural sources of discrimination remain; policies that seem race neutral today can systematically disadvantage those who suffered under race-based policies in the past. Together, these more subtle forms of discrimination leave blacks at a major disadvantage in employment, housing, credit, and consumer markets. And because modern forms of discrimination tend to be less visible, they can be more difficult to remedy.

—"The Sociology of Discrimination: Racial Discrimination in Employment, Housing, Credit, and Consumer Markets," Devah Pager and Hana Shepherd, Annual Review of Sociology, January 2008

3. EVEN MODEST RACIAL DISPARITIES CAN HAVE DRAMATIC EFFECTS

Researchers have long noted that incarceration functions a lot like contagious disease: Family members and close associates of incarcerated people exhibit higher probabilities of being incarcerated themselves. In 2014, a group of researchers probed this resemblance further. The way infections spread through populations, small differences in rates of exposure can have huge effects over time. So the researchers looked at a seemingly modest racial disparity in “exposure” to incarceration: In America, the average white person convicted of drug possession is sentenced to 14 months in prison; the analogous black defendant gets 17 months. When the researchers plugged these numbers into a computer simulation designed to mimic the spread of disease over time, they ended up with one percent of the white population behind bars, and seven percent of the black population there—figures that mirror actual incarceration rates.

—"The Contagious Nature of Imprisonment: An Agent-Based Model to Explain Racial Disparities in Incarceration Rates," Kristian Lum, Samarth Swarup, et al., Journal of the Royal Society Interface, September 2014

4. SEGREGATION IS STILL A SERIOUS PROBLEM

Jobs, effective schools, and safe streets are overwhelmingly concentrated in or near affluent white neighborhoods. The sociologist Douglas Massey argues that such residential segregation has decisively undermined the life chances of people of color, especially African Americans. Exposure to highly concentrated neighborhood poverty puts people at higher risk of unemployment, criminal involvement, and a host of other socioeconomic ills. Massey warns that, absent concerted government action, residential segregation is likely to continue. He advises the Department of Housing and Urban Development to “intervene forcefully” by funding local fair-housing organizations to identify and prosecute more cases of housing discrimination and enforce fair housing laws.

—"Residential Segregation and Neighborhood Conditions in U.S. Metropolitan Areas," Douglas S. Massey, America Becoming: Racial Trends and Their Consequences, National Academy Press, 2001. Eds. Faith Mitchell, Neil J. Smelser, and William Julius Wilson

5. SCHOOL REFORM WON'T HELP MUCH, BUT PRESCHOOL EDUCATION MIGHT

In recent decades, enormous energy and resources have been poured into K-12 school reform, but the Nobel Prize-winning economist James Heckman claims that “America currently places too much emphasis on improving schools compared to improving family resources.” By the time children enter school, large racial disparities in vital skills are already apparent. Cognition and “soft skills,” such as self-discipline, are crucial for economic success, but poorer children of all races are behind on both fronts. Heckman argues that instead of school-based reforms, policymakers should focus on early childhood education programs and “culturally sensitive” support for parenting—efforts that have been shown to have powerful payoffs.

—"The American Family in Black and White: A Post-Racial Strategy for Improving Skills to Promote Equality," James Heckman, Daedalus, Spring 2011

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