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Wed Feb 27, 2013, 03:47 PM

Study shows wealth gap between whites and African-Americans tripled in 25 years

Source: Raw Story

Study shows wealth gap between whites and African-Americans tripled in 25 years
By Arturo Garcia
Wednesday, February 27, 2013 15:28 EST

The wealth gap between white and African-American households almost tripled within the past 25 years according to a study released on Wednesday by Brandeis University.

The study, (PDF) conducted by the university’s Institute on Assets and Social Policy, tracked 1,700 working-age households between 1984 and 2009 and concluded that the disparity between white and black families went from $85,000 to $236,500 during that period.

According to the study, there was “little evidence” that commonly-held perceptions about personal choices and behaviors held true when it came to measuring the ability to accumulate wealth.

“In my estimation, policies and institutional practices are the main story,” said the institute’s director, Tom Shapiro, who was the principal author of the report, during an online seminar on Wednesday.


Read more: http://www.rawstory.com/rs/2013/02/27/study-shows-wealth-gap-between-african-americans-tripled-in-25-years/

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Reply Study shows wealth gap between whites and African-Americans tripled in 25 years (Original post)
Judi Lynn Feb 2013 OP
azurnoir Feb 2013 #1
jaysunb Feb 2013 #2
jtuck004 Feb 2013 #3
Igel Feb 2013 #4
jtuck004 Feb 2013 #6
Puzzledtraveller Feb 2013 #8
daleo Feb 2013 #5
daybranch Feb 2013 #7

Response to Judi Lynn (Original post)

Wed Feb 27, 2013, 03:50 PM

1. looks like

Reaganomics are working according to plan

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Response to azurnoir (Reply #1)

Wed Feb 27, 2013, 03:54 PM

2. +1 nt

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Response to Judi Lynn (Original post)

Wed Feb 27, 2013, 04:07 PM

3. Say it ain't so


>>According to the study, there was “little evidence” that commonly-held perceptions about personal choices and behaviors held true when it came to measuring the ability to accumulate wealth.

“In my estimation, policies and institutional practices are the main story,” said the institute’s director, Tom Shapiro, who was the principal author of the report, during an online seminar on Wednesday. <<

But, but, we were told, repeatedly, during the election speeches over the past few months that "anyone can make it in America if they just work hard".

This research says that is wrong, and that people in power are ignoring structural barriers to the detriment of many.

The research must be faulty.

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Response to jtuck004 (Reply #3)

Wed Feb 27, 2013, 07:39 PM

4. The first thing you do is question the evidence and assumptions.

The end point is 2009. Most average whites have a large chunk of their assets in their houses.

Most average blacks in the '00s put a lot of money into equity in their houses. Then the housing bubble burst and they were "underwater." Many others had subprime mortgages or unorthodox mortgages that led to problems when they couldn't refinance easily. Few want to attribute any of this to individual choice.

That's explanation 1. Housing policy lead to the bubble.

A disproportionate number of blacks were in foreclosure fairly quickly because the recession in late 2008 hit low-skill workers harder than professional and high-skill workers. This is another "average" black versus "average" white kind of thing.

That's explanation 2. A lot of people want to attribute this non-random distribution of skills and careers to policy and not choice.

But a large chunk would have to be the increase in wealth for that 1% (or 5%). Again, real estate and securities increased in value. The top 5% are disproportionately white. So while the top 5% or 10% took over half the financial hit to the asset list in this recession, over the 30-year period they examined their assets still trended up by a fair amount. In this we're looking at non-average white versus average black, however.

And again, the concentration of wealth can be viewed as depending more on policies than any individual choices. However, at the end of the day you're rather left wondering what is up to individual choice.

However, the endpoints of the study aren't chosen randomly. Pick early 2008 as the cutoff and you'd find that the disparity in assets wouldn't have been so great. They picked their starting point when some sorts of wages stagnated and the great asset increase for the upper classes began; and they picked their end point at the depth of the housing debacle.

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Response to Igel (Reply #4)

Thu Feb 28, 2013, 12:44 AM

6. Real estate didn't fail like that.

>A disproportionate number of blacks were in foreclosure fairly quickly because the recession in late 2008 hit low-skill workers harder than professional and high-skill workers. <

Regardless of color, people who take out loans don't "put money into equity". They take on debt, overpriced loans that inflate the "value" of the home they bought or refinanced. When it crashes, one loses equity only if they had any before they took on a new loan. The strawberry picker that was lied to in order to encourage him to buy into the $750,000 no down loan on a house in California never had any equity, but was worse off after the loan failed.

The inner-city loans didn't fare as badly as the suburbs. Everything I have data on says that suburb collapse was far quicker and worse than inner-city values (which, frankly, started lower and didn't rise nearly as much) And that was mostly white folk.


...
What occurred was the exact opposite: The suburbs boomed and busted and went into foreclosure in much greater numbers than inner cities. The tiny suburbs and exurbs of South Florida and California and Las Vegas and Arizona were the big boomtowns, not the low-income regions. The redlined areas the CRA address missed much of the boom; places that busted had nothing to do with the CRA.
...


Here.

They did lose jobs, but not the mid-pay jobs which have been the hardest hit. The people who had those jobs have now moved into the lower paying jobs, if they got one at all, and thus displaced black folk (among others) to some extent. I am not minimizing it, because when you don't have much to start with one's losses can be more devastating, that is surely true. But the wealthy don't depend on their home values or such jobs for most of their money. That's for the 99%.

I was actually being sarcastic above. It is the policies. Our problem is not the lack of individual persistence and work ethic. We have that in abundance. Yet our own President is pushing the individual effort meme (check his speeches before and after his latest election), telling us how "anyone can make it if they just work hard". We hear about "tough choices". Apparently we are supposed to believe that it is harder to beat up on the most vulnerable by cutting aid to them, not invest in them, that the phony debt issue demands it, (the debt isn't the problem, costs are) instead of going after the people who caused the problem.

In reality it is not a "tough choice" at all. It's easy to hurt someone weaker than you, someone powerless, (cops prove it to us all the time), much easier than standing up against the policies that allow for excessive profits in the Health Industrial Complex, or jailing banksters, some of the biggest contributors to political campaigns, for their overtly criminal acts, whose friends one sees every day in the White House, as lobbyists to Senators and Congresspeople, as golfing partners in clubs where, when a black person is seen, they are far more likely to be working there than enjoying an early tee time. For example, it's much easier to let landlords put someone in jail for being late on their rent than it is to address draconian rental policies..

It is not the over 10 million people who we call "working poor" that are the problem. They work hard every day, but have better odds at winning a state lottery than they do of "making it" in America. It is policies that act as barriers to getting oneself out of poverty while supporting income inequality by making sure the rich can continue to take, and keep, the product of other people's labor.

On the policy question at least, I think we agree. And it's high time those policies are addressed.

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Response to jtuck004 (Reply #6)

Thu Feb 28, 2013, 11:05 AM

8. You explained it well, thanks.

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Response to Judi Lynn (Original post)

Wed Feb 27, 2013, 10:45 PM

5. It would be interesting to see a comparison, minus the one percent

My hunch is that the widening gap is largely the result of the super rich getting richer. The racial makeup of the top tenth of one percent is probably very skewed, and not in favor of the non-white population. Like the old south plantation society, a few whites are hogging most of the wealth at the expense of everyone else.

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Response to Judi Lynn (Original post)

Thu Feb 28, 2013, 09:58 AM

7. I am an old white guy

and this makes me angry. The country is just so screwed up to cause this to happen. I am working to combat this in Ohio.
I believe that Gerrymandering and any other technique that destroys the equality of our votes has a lot tom do with this and many many other problems. We are organizing to work to fight Gerrymandering in Ohio and hopefully we can remedy situations like this wealth gap.

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