Racial equality is economic equality
By Darrick Hamilton
Feb 14, 2019
Just over 75 years ago, President Franklin Delano Roosevelt’s 1944 State of the Union address introduced the idea of an Economic Bill of Rights. Roosevelt’s call for “physical security… economic security, social security, and moral security” did not envision a public takeover of the American economy, but instead a more moral and decent economy where the government intervened in economic domains that are essential to Americans’ well-being and self-determination.
This vision is rooted in the observation that free markets, without proper checks, inherently inhibit economic equality. Economic and political power are self-reinforcing, and without government intervention generate an iterative cycle of stratification and inequality. As we have moved away from that vision, our convention has evolved to use words like choice and freedom to describe the benefits of the market, but, in reality, it is literally wealth that gives us choice, freedom, and optionality. So, without a more equal dispersion of capital, inequality is all but assured.
In the United States, the top 10 percent of households hold about 76 percentof the nation’s wealth. The top one-tenth of 1 percent own about as much of the nation’s wealth as the entire bottom 90 percent. The bottom 60 percent of households own only about 1 percent of the nation’s wealth. In short, the top few own almost everything while the bulk of our society owns almost nothing.
What is frequently overlooked in these disparities is that race is a stronger predictor of wealth than class itself. The 2017 Survey of Consumer Finances indicates that the typical black family has about $17,600 in wealth (inclusive of home equity); in contrast, the typical white family has about $171,000. This amounts to an absolute racial wealth gap where the typical black family owns only ten cents for every dollar owned by the typical white family!
This disparity has endured over time. The racial wealth gap is an inheritance that began with chattel slavery, when blacks were literally the capital assets for a white landowning plantation class. The gap continued after Emancipation, when discriminatory laws and institutions established insurmountable barriers to the American middle class for black families. Today, hundreds of years removed from chattel slavery, there has virtually never been a substantive black middle class when defined by wealth. In contrast, the implementation of FDR’s New Deal and post-war vision facilitated an asset-based white middle class to cumulatively build wealth and pass it on to their heirs.
Unfortunately, the political sentiment regarding social mobility has radically shifted. Rather than achieving economic security through government mandates, the modern neoliberal approach presumes the “market” is the solution to all our problems, economic or otherwise. As a result, the onus for social mobility has shifted to the individual, and the economic gains and security of even the white middle class have been under siege.
Education is not the magic antidote for the enormous inherited disparities that result from longstanding inequality in laws, policies, and economic circumstances.
Yet, the pervasive narrative is that, in a free market, anyone can turn “rags into riches” if they are willing to work hard. Likewise, the reasoning goes, the virtues of a free market will sanction those who are not astute, lack motivation, or are simply lazy. In other words, the “deserving poor” — stigmatized by the political fodder of anti-blackness — receive their “just rewards,” and simply fade away.
The fallacy of this argument is vivid when we consider education and race. Even when black families outperform whites on education metrics, white families often experience better outcomes. High-achieving black Americans, as measured by education, still exhibit large economic and health disparities relative to their white peers. Blacks who live in families where the head graduated from college typically have less wealth than whites where the head-of-household dropped out of high school. Black expectant mothers with a college degree have a greater likelihood of an infant mortality than white expectant mothers who dropped out of high school. And a black man with a college degree is nearly three times as likely to die from a stroke than a white man who dropped out of high school.
In essence, education is not the magic antidote for the enormous inherited disparities that result from longstanding inequality in laws, policies, and economic circumstances.
This does not diminish the value of education. There is clearly intrinsic value to a college degree and other types of training. But we overstate the role of education to the detriment of recognizing the functional role of wealth and the political and economic power that comes along with it.
The mantra of Reverend William Barber, one of the leaders of the Poor Peoples Campaign, is that “economic justice is a moral imperative.” Embracing this vision means advocating for an economy that is both race- and gender-inclusive, and one that puts the onus of inequality not on the individuals but where it belongs: centuries of discrimination and intergenerational resource hoarding.
Darrick Hamilton is the Executive Director of the Kirwan Institute for the Study of Race and Ethnicity at The Ohio State University. Professor Hamilton holds a primary faculty appointment in the John Glenn College of Public Affairs, with courtesy appointments in the departments of economics and sociology in the College of Arts and Sciences.