The book ‘The Colour of Wealth’ written by Meizhu Lui, Barbara J. Robles, Betsy Leondar-Wright, Rose M. Brewer and Rebecca Adamson attempts to tell the story behind the historical disparity of wealth distribution in the United States of America based on race. The beginning of the book aims to explain the roots of where all these racial social injustices may have come from. This group of authors points out the obvious consensus that mass accumulation of wealth for any family or generation is the true key to financial independence. The authors strive to point out the differences between what it means to merely earn an income and what it means to accumulate wealth. In a quote from the famed Reverend, Jesse Jackson Senior, it is pointed out that wealth accumulation gifts one control over their future. The control that wealth accumulation gives the owners over assets, also lends them the chance, if they so wish, to influence the corporate and political landscape of their surroundings.
A disturbing ratio, that every dollar owned by the average white American family is commensurate to only one dime owned by the average black American family, is brought to light. Generations of unfavorable policy, laws, discrimination and violence are listed as some of the possible reasons why this skewed ratio exists. This section also goes ahead to define what wealth means in the context of this narrative, which have been defined as simply, economic assets. Economic assets cover wide ground. They may vary from businesses, funds, stocks, bonds, property, cash and real estate. The authors are also quick to point out those familial and generational relations, business connections, robust political environments and government infrastructure also serve as additional assets that may be available to a given portion of the population. From the mid-nineties to the late 2010s, this section points out that the average net worth of a black family dropped by 7% while that of the average white family rose by 37% within the same period. This further exacerbates the racial social divide, especially considering that it happened within a relatively short period of 6 years.
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Perception and Reality of Economic Inequality by Race
Since the social racial movement of the 1960s, it has been constitutionally illegal to practice racial discrimination in any form. The Civil Rights movements of that decade fought to achieve equal rights and responsibilities for every American citizen, regardless of the colour of their skin, the gender, their age or the social class to which they belong. A chart illustrates that whereas the average white family had a median net worth of $103,400 in 1998, the average black family had a median net worth of $17,900 in the same year. This is compared to three years later, where the average white family had a median net worth of $120,900 whereas an average black family had a median net worth of $17,100. Within three short years, we see the median net worth of the two racial groups going two totally different directions, despite basically coexisting in the same economic ecosystem. This scenario replays itself when the net assets owned by both racial groups are compared.
Individuals of the white race living in the 21 st century may argue that they have worked hard for their wealth, assts and perceived economic advantages. Take the example of Ed, who worked hard in college, worked hard at his professions, all while saving up money steadily in order to buy a home for himself. What Ed does not recognize, nor acknowledge, is that his lineage benefits from advantages accrued from generation to generation since the times of his great grandfather and his great grandfather. The net accumulation of generational wealth has placed him well on his way to economic success through, connections, that past generations of white families have made with each other, laws and regulations that favoured the white race a century ago and a host of other subtle advantages that Ed may not immediately see, but which actively exist and serve to give him a much visible head start in today’s day and age.
Income versus Wealth
Income is a very short-sighted parameter of socioeconomic success, the authors claim. Melvin Oliver, another author who co-wrote the book ‘Black Wealth, White Wealth’ says that ‘Income feeds your stomach but assets change your head. That is you really do act differently when you have a cushion of assets so that you can strategize around important opportunities in life.’ Here the argument being advanced is that the advantages that white families currently have in their asset ownership have been compounding for several years and will continue to do so for as long as generations upon generations of white families continue to pass down their connections, financial know-how and real financial assets to their progeny.
Living from paycheck to paycheck, which a sizeable number of black families do, does not exactly afford one the playroom to think about the future and investments for your children in a positive light. The pressures of living hand to mouth keep most black families thinking only about the present. They cannot take advantage of any opportunities that come their way. One generation, it has been shown in this section, very clearly passes advantages and disadvantages to the next, in what becomes either a virtuous cycle in the case of white families or a vicious one in the case of black families.
Snapshot of the 1850s
The 1850s were a watershed period for the average white American male, owing to the fact that gold had been discovered in the Golden State, California. The government of the day had allowed a free-for-all for everybody who could make their way in California I search of gold. Those who did not land gold could continue ownership of their land as farmers. The catch was that the government only allowed white males to carry out this exploitation. No other race could mine for gold or own land. In addition, only white males could own slave labour, which they exploited to the maximum for economic gain. In stark contrast, the young African American male could not have gone through a harder period. Laws, tradition and regulations were stacked heavily against their favour. These seemingly trivial advantages of the day skewed in favour of white families have compounded into massive economic advantages for their generations to come.
Snapshot of the 1950s
During this period, which was immediately after the 2 nd world war, the average white American male had massive economic advantages from the government. Owing to the post-war boom, white American males were being actively prodded by the government to get into universities and employment that had been purposely secluded for them. Congress also passed bills that heavily favored white families that opted to move into the suburbs, an exercise from which African Americans where almost entirely excluded from.
Why Not Just Fight Poverty?
‘ Wealth Inequality gaps are much wider in the United States of America than in other industrialized countries.’ Also, economic instability has grown amongst all working people, regardless of race. This is broadly because the periods of massive economic growth often witnessed in the United States of America usually only benefit the owners of assets and not the people who are dependent on an income. In fact, the people who are dependent on an income often witness a loss of economic value in the course of these economic boom and bust periods. Of worthy note however, is the fact that challenging economic ecosystems often present more barriers for people of colour than for white people.
The Underestimated Role of Government in Wealth Creation
Towards the last leg of the book, these authors delve into how the government has contributed to the growing gap in wealth distribution due to race. The government, we see, has often lent a helping hand to suffering, white, male citizens who at that point was going through a period of economic hardship. Evelyn Nakano Glenn explores citizenship as the ultimate government charity. She defines it as ‘a government-granted status that opens the door to full membership in society. She states that the rights to citizenship often oscillated depending on the historical period, often being stripped and bestowed upon certain groups as the government and Congress saw fit. A section of scholars suggest that historically affluent and wealthy white captains of industry often had a stranglehold on the economic and political policies of their day. This way, they were thus able to steer them in a direction favourable to them.
There exists a complicated, yet ever-present relationship between economics, ideology and government policies of the day. This trio of factors contributes to the widening of the racial economic gap in more ways than are immediately perceptible. The authors state that ‘At key moments of United States history – after the Civil War, during the Great depression and during the turmoil of the 1960s – white Southern landowners and businessmen exerted political pressure to limit or reverse racial progress. Their motivations were presumably a combination of racial prejudice and economic self-interest.’ The authors then complete the book with a section titled, ‘Everyone would benefit from closing the racial wealth gap.’ In a nutshell, this section intimates that everybody loses where policies are implemented, that disadvantage people of colour, which includes Asians, Latinos and African Americans. The ideals of the American Constitution espouse the United States of America as a beacon of equality and democracy. A clear understanding of the roots of racial divisions needs to be sought, before embarking on trying to erase the divisions themselves.
