Racial wealth gap increases fourfold

Thomas M. Shapiro, Tatjana Meschede, and Laura Sullivan of the Institute on Assets and Social Policy (affiliated with the Heller School for Social Policy and Management at Brandeis University) have released a new Research and Policy Brief, “The Racial Wealth Gap Increases Fourfold”. Shapiro et al. summarize their findings in the opening paragraph of the brief:

“New evidence reveals that the wealth gap between white and African American families has more than quadrupled over the course of a generation. Using economic data collected from the same set of families over 23 years (1984 2007), we find that the real wealth gains and losses of families over that time period demonstrate the stampede toward an escalating racial wealth gap.”

In their coverage of this, the BBC quote Shapiro as saying, “There continues to be a persistence of racial segregation.” Later, they quote him as saying, “I was shocked by how large the number was…. I’ve been in this research business, and looking at similar kinds of issues, for a long period of time, but even in my cynical and jaded moments I didn’t expect that outcome over one generation.”

I was going to offer some theological commentary, but I’m too pissed off by this news. This is about the only time I’ve wished I were a hellfire and brimstone preacher.

11 thoughts on “Racial wealth gap increases fourfold

  1. will shetterly

    I saw that. Forgive a typical comment here: I wished they’d factored in class. How are rich blacks doing compared to rich whites, poor blacks compared to poor whites, etc.?

    Because we know the poor, regardless of color, and the rich, regardless of color, are growing further and further apart.

  2. will shetterly

    Ah, just looked at the pdf, which does compare middle income folks. But what it doesn’t compare is wealth versus income; middle income whites tend to have been middle income longer, and even for generations, and therefore tend to have more wealth. I’m back to my old question for antiracist liberals: How do you distribute the wealth in racially proportionate ways without ending capitalism?

  3. Dan

    Will writes: “How do you distribute the wealth in racially proportionate ways without ending capitalism?”

    My answer: end capitalism.

  4. Amy

    @Dan: Word.

    @Will: if dismantling capitalism altogether isn’t palatable, how about taxing wealth? Right now we tax money that’s “earned” by investments considerably less than we tax money that’s actually earned–you know, by a person working.

    Also, putting serious money into education would do a lot to give people the “economic opportunity” we like to brag about.

  5. David Markham

    I would love to read the theological commentary. I hope that you do make it when you calm down. It would be very well worth doing.

  6. Tom

    The authors grossly misinterpret their own study. The wealth of the median white American has _not_ increased by a factor of 5 in the last 23 years. Nor does the median white family have $100,000 in cash and stock lying around. Correct numbers are readily available from the Federal Reserve http://www.federalreserve.gov/pubs/oss/oss2/papers/concentration.2001.10.pdf

    In 1989 the median family net worth (including real estate) was $5,300 for African-Americans and $97,800 for non-Hispanic whites. in 2001 the numbers were $19,000 and $121,000 respectively. That is, the gap is quite large, but nostaligia for the Reagan administration is misplaced..

    If you read the authors’ footnote you will see that the sample consists of people who were 25-55 in 1984, meaning that they were 48-78 at the end of the study. That is, the chart shows how liquid wealth accumulates over people’s lifetimes, not changes in American society.

    Of course, the fact that the inequality is entrenched and not changing much is at least as depressing as the authors’ confused account.


  7. Dan

    Tom @ 6 — I’m not sure I’d say that the authors grossly misinterpret their study. They are quite clear that they are doing a longitudinal study; they wanted to track individual households over time. They could argue that just looking at nationwide statistics in given years, as you do in your comment, does not provide the data that can answer their question. I would suggest that you are measuring inequality in a different way than Shapiro et al.; neither way is wrong, but each methodology asks and answers different questions. Longitudinal studies have valuable insights to offer; so does your approach.

  8. Tom


    There is nothing wrong with their study. It is just that longitudinal studies of a specific group of aging people don’t constitute a correct basis for making generalizations about US society. And the authors make a whole series of just such generalizations. Certainly the BBC and the other commenters here all misinterpreted the study.

    The conventional wisdom is that the reason Whites accumulate more wealth is that they are much more likely to own their homes. Homeownership rates in 2007 were 75% and 47% for Whites and Blacks respectively. (In 1910 the numbers were 46% and 20%.) So the median White person accumulates equity, which they may cash out when they retire. The median black person doesn’t. Improving this situation was one of the motives for the sub-prime fiasco.

    Anyway, according to NBER, wealth per family for Blacks divided by Whites was about 10% in 1900, 16% in 1960 and 16% in 2007. So things are changing slowly, if at all.

    I suppose I was irritated when the PI said he was “shocked” by the extent of the disparity. This subject has been well studied for a century.

  9. Dan

    Tom @ 8 — BBC and other news outlets are notorious for over-generalizing. It’s also problematic to make generalizations about U.S. society from cross-sectional studies, it’s wrong to make causal connections based on statistical correlations, etc., yet news outlets consistently do all these things.

    What I heard in Shaprio’s comments (and we’re trusting that BBC accurately reported what he said, which may not be a good assumption) is that he was surprised at the extent to which this longitudinal study showed how much the gap between high income whites and all blacks has increased. I was a little surprised at his surprise simply because many other studies have indicated that wealth is increasingly concentrated in the hands of a small number of U.S. residents (and we’ve all assumed that those richest people are mostly whites); at the same time, it was surprising how little wealth high income blacks were able to accumulate; I think some surprise is warranted for that.

    And even though the summary report issued by the researchers is sketchy, doesn’t adequately describe their methodology, doesn’t give a full statistical analysis, etc., etc., given the current political discourse, where so many people are convinced that blacks are doing just as well as whites, I think the researchers have a reasonable case for trying to get some publicity for this.

  10. Elz

    The faster we disconnect race and economics, the sooner our nation will see a decline in racist anger from whites who feel their poverty (or fear of it) is invisible. That their plight rates no mention, even though they worry about their children, their elders, their aching feet and backs, etc.

    The number one thing we can do for liberal religion is to hear the plea of one African American man, who said, in effect, “Don’t describe me by my race, describe me as myself.” A good practice when looking at a person of ANY race, culture, etc. IMHO, we UUs look for easy markers like race because we don’t want to make — or fund — the time to hang in long enough to really hear individuals, really see subtle indicators. We need to quit making the false analogy that if most money is in White hands, then most White people are wealthy.

  11. Dan

    Elz @ 10 — You write: “The faster we disconnect race and economics, the sooner our nation will see a decline in racist anger from whites who feel their poverty (or fear of it) is invisible.”

    Yes, I think we’re all seeing the limitations of identity politics. Racial divisions are a great way to keep natural allies apart.

    At the same time, it is helpful to see exactly where the divisions between people are. If we’re going to build alliances, we all need to be aware of where identity politics has put us — and then move beyond it.

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