Wealth Disparity is Rooted in a History of Racism, Bad Politics and Socio-Economic Barriers
Darrick HamiltonDr. Darrick Hamilton is the director of the doctoral program in public and urban policy, and is jointly appointed as an associate professor of economics and urban policy at The Milano School of International Affairs, Management and Urban Policy and the Department of Economics at The New School for Social Research at The New School in New York.
In a recent article that I co-authored with Dr. William “Sandy” Darity, Jr., we contest the framing of wealth disparity that focuses on the poor financial choices and decision-making on the part of, largely, black, Latino, and poor borrowers. This directional emphasis is wrong. Meager economic circumstances – not poor decision making or deficient knowledge – constrains choice itself and leaves borrowers with little to no other option but to attain and use predatory and abusive alternative financial services.
The racial wealth gap is rooted in racialized historic and ongoing socioeconomic and political barriers – not individual agency, underachievement in education, or a lack of financial literacy on the part of black Americans.
Our research brief, “Umbrellas Don’t make it Rain: Why Studying and Working Hard Isn’t Enough for Black Americans,” critiques the preponderance of research and public policy that asserts that education and hard work are the drivers of upward mobility as it relates to racial disparity. The net worth of black families whose head earned a college degree is only about $23,000, while the typical white family has close to eight times that amount, with about $180,000 in wealth. Furthermore, black families whose head graduated from college have only about 2/3 of the wealth of white families whose head dropped out of high school!
A “good” job is not the great equalizer either. The typical white family whose head is unemployed has nearly twice the wealth as the typical black family whose head is employed full-time – about $23,000 versus $12,000; the typical black family whose head is unemployed has no wealth!
Education, financial literacy, and skills are far from cure-alls for the enormous racial wealth gap, but, rather, promote harmful stereotypes and serve as distractions from addressing the actual structural barriers that continue to fuel this unjust disparity. This is not intended to diminish education; there is clear intrinsic value and a public responsibility to deliver high quality education to all, regardless of race. At issue is the societal overemphasis on individual agency, education, and financial literacy as a means to an end of the racial wealth gap, rather than as an end, in and of itself.