In January of this year, there was a short flurry of posts about the incredible discrepancy between the wealth of black households and white households. I had no idea that the median white household has seven times the assets of the median black household. It’s primarily a legacy of history; there’s a gap in wages between white and black workers, but it’s not a 7-1 gap. Black households even save slightly more than white households at the same income level.
This has all sorts of implications, as family wealth (for example) makes higher education and entry into the housing market much easier for a young adult. As Dalton Conley notes, black college students are more likely to drop out than white college students, even if their families have the same incomes. When you control for wealth, however, black and white students perform equally as well.
(My posts on the subject are here, here, and here. Kevin Drum, Kieran Healey (the link is probably not working), and Rob Lyman all had excellent posts on the subject.)
Recently, I got an email from Jonathan Maccabee with more detail about the value of owner-occupied homes, the primary source of wealth for most families. He took a look at the US Census’ American FactFinder, table HCT 66, “Median Value of Owner-Occupied Housing Units.” (I’m restricting this to white and black for the sake of simplicity.)
| Total | White | Black | |
| National | $119,600 | $122,800 | $80,600 |
| California | $211,500 | $225,500 | $164,600 |
| New York | $148,700td> | $142,500 | $163,900 |
| Texas | $82,500 | $87,600 | $62,400 |
Says Jonathan,
As you can see, the racial gap in housing prices is significant. Though in New York State, to my surprise, the gap works in reverse, as most minorities who own homes live in the very expensive New York City area. The percentage of those who live in owner-occupied housing, of course, is very low in much of New York City and generally lower for minorities than whites; the Census doesn’t calculate the percentages, but the comparison is at Summary File 4, HCT 2 – Tenure (translation: living in owner-occupied housing vs. renter-occupied housing). This is one reason why these numbers enormously understate the wealth gap between whites and minorities.
It’s worth making the point that the proportions of white and black households who own their own homes are very different. According to the Local Initiatives Support Coalition, black home ownership rate was at 46.3% in 2000, while white home ownership was at 73.8%.
I can’t get over it. I finally got Dalton Conley’s book, Being Black, Living in the Red, and I’ll have to report on it later.
{ 10 comments }
Raoul Mitgong 09.11.03 at 7:05 am
“When you control for wealth, however, black and white students perform equally as well.”
Well, duh. The displacement of class antagonism onto a racial template (ie, not rich vs poor but “white” vs “black” — wher does that leave us “brown” folk?) has been one of the most useful and powerful sleights of hand in the three-card monte of American politics.
Matt McIrvin 09.11.03 at 1:16 pm
I don’t want to minimize the problem here, since it’s real, but it’s also worth noting that this is a case where citing a median value has a magnifying effect. Most home-owning families’ assets consist mostly of a house. The gap in median assets is so large simply *because* the home-ownership number for white families is above 50% and the one for black families is below 50%.
To put it another way: If the proportion of black families owning homes were just 8% larger, the gap in median assets would be several times smaller– maybe a factor of two or less. But the socioeconomic problem would still be almost as large as it is. Whereas if 51% of white families owned a home and 49% of black families did, the median asset gap would be almost as large as it is, but the socioeconomic problem would be relatively small.
So I’m not sure that citing median assets is useful here except as an attention-getting device, since the median is inflated by a threshold effect that’s too close to some of the fractions under discussion.
Matt McIrvin 09.11.03 at 2:15 pm
“…but the socioeconomic problem would be relatively small.”
Lest a libertarian jump on me for suggesting that distributing misery fairly eliminates the problem, I should rephrase that as “…but the socioeconomic gap would be relatively small.”
carla 09.11.03 at 3:03 pm
Two comments: A friend from grad school (now at Harvard, I think?) studied some of the related issues here, and I believe one of the things he was showing is that one of the reasons that black families had a harder time getting a conventional mortgage was the presentation of their assets. (another was redlining, of course.) That is, (predominantly white) mortgage lenders expected the profile of applicants to look a certain way, which wasn’t necessarily the only accurate reflection of the ability to pay the mortgage or afford the home.
Second, without having read any of the supporting materials you’ve linked, I also seem to have read that often black families are assisting more relatives than are white families–those who succeed are expected to help out the rest, which would also affect the resources that even successful families would be able to bring to bear on their own lives.
Very troubling stuff, though, especially as the efforts to gut public education and gut social services generally continues to ramp up. (A number of bloggers have suggested that the current state of the federal budget is what the republicans have PLANNED–if they bankrupt the federal government, then the ‘welfare state” and social security are gone, too.)
Sven 09.11.03 at 3:25 pm
I recently stumbled upon a PBS documentary (I think it was called “Race: The Power of Illusion”) that reinforced the stunning statistics on the wealth gap with a gripping account of how it came about.
Particularly compelling was the story of a black WWII veteran who tried to take advantage of a low-interest VA loan to purchase a home in Levittown, New York, but was told flat-out that he wasn’t welcome. He then discovered he couldn’t obtain a loan in his old neighborhood because it had been redlined by insurance companies.
So while millions of other veterans received a boost up the economic ladder, he was shoved off the ladder altogether. Not only was denied the opportunity to build a foundation of property wealth for later generations to build upon, he was also denied access to the better jobs and schools that the suburbs afforded.
His grandchildren are literally paying the price for an act of overt discrimination that took place more than 50 years ago.
Ophelia Benson 09.11.03 at 3:49 pm
“A number of bloggers have suggested that the current state of the federal budget is what the republicans have PLANNED—if they bankrupt the federal government, then the ‘welfare state†and social security are gone, too.”
Er…isn’t that kind of common knowledge? I thought it was. I thought it had been common knowledge ever since Reagan. David Stockman (was it Stockman? I think so) came right out and said as much.
It’s also a great stealth weapon. Because actually voting explicitly to do away with programs can get some unfriendly attention (though never as much as it ought to, from the hahahahahaha liberal press), whereas just *not funding* those programs doesn’t require politicians to stick their necks out, and the result is exactly the same. Yippee.
Matt Weiner 09.11.03 at 6:23 pm
Ophelia, it depends on what you mean by “planned.” There was a Doonesbury cartoon where Reagan’s staff present the accusation that he deliberately bankrupted the government in order to cut its size and Reagan says…
“Gosh. Am I that smart?”
“We don’t know sir.”
“Try to remember….” {funnier in original, probably}
So, some of Reagan’s and WBush’s advisors (Stockman and Norquist) certainly want that. Other people seem to think that tax cuts raise revenue. Are the people most responsible for these budgets trying to implement this plan? I have no idea.
(The people who deliberately underfund programs, sometimes after publicly praise them, are just evil.)
carla 09.11.03 at 9:00 pm
Maybe I’m mis- (or under-) informed . . . I guess I’m drawing a distinction between the people who want(ed) to shrink the size of the federal government and those who want to completely bankrupt it (and plunder what they can), which may well be a false distinction at this point. I also have the impression (again perhaps wrongly) that this current crew is taken much more seriously, that these ideas used to be regarded as tinfoil-hat-fringe ideas, but the right-wing funding machine and Mighty Wurlitzer (and SCLM) have given them a prominence and respectability they did not have.
In any case, I was most taken by Sven’s observations about the long-lasting repercussions of discrmination.
Matt Weiner 09.11.03 at 9:21 pm
Well, carla, I think that Norquist has suggested that it’s OK to bankrupt the government in order to force it to shrink–and I think that was more or less how Stockman presented the plan. I don’t have chapter and verse on this, though.
dsquared 09.15.03 at 8:52 am
Just wanting to pick up my fellow blogger here on an equivocation between “minority” (a catch-all term for non-white, largely made up of immigrant populations) and “black” (a term specifically referring to the descendants of slaves, plus a relatively small proportion of immigrants). Given that part of the subject is the legacy of history, it matters; do these statistics refer to minorities or to blacks?
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