Bankole: Income and wealth gaps remain for blacks
Some dreamed that the election of a black man to the presidency would also lead to significant economic progress for African-Americans. But as Barack Obama nears the end of his term as the nation’s first black president, new research reveals a dream unfulfilled as data shows a continuing gap.
An analysis of U.S. Census Bureau data from 2014 by the Pew Research Center found the median income of black households was $43,300 compared to $71,300 for whites. The study, released June 27, showed that in the same year black households with a college education earned significantly less —$82,300 — than their white counterparts who made $106,600.
The Pew research also revealed another set of data that showed that in 2013, the median net worth of white households was almost 13 times higher than that of blacks, at $144,200 for whites and $11,200 for blacks. The analysis also found, based on 2015 data, that 72 percent of white household heads owned a home compared with 43 percent for blacks.
“I am not surprised at all by the Pew data on income. Black incomes have been a similar fraction of white incomes for decades, varying by few percentage points,” said Karl Gregory, a former economics professor at Oakland University who once worked in the Congressional Budget Office and wrote several reports on economic policy.
He said the white/black wealth data ratio is more important than the disparity in income.
“Many black families are just a few paychecks away from being homeless. With substantial wealth, a family has the flexibility to live off its wealth until it finds or becomes trained for another job to earn income,” Gregory said.
Mike Smith, principal archivist at the University of Michigan’s Bentley Historical Library, who has studied labor and the working class, said that while education can be an equalizer in today’s economy, race remains an issue.
“I do not believe the playing field is yet to be fair for all,” Smith said. “In Detroit and Michigan, for example, for most of the 20th century, a worker without skills or education could get a high-paying, secure job making cars or automotive parts. These same opportunities did come later for African-Americans during WWII and after, but they were available then.”
Smith said that with the introduction of robotics, computers and other changes in manufacturing, the automakers need only 25 percent of the workers they needed 30 years ago.
“There are no longer a mass number of jobs for those without education,” he said. “And, this has had a heavy effect on African-Americans in Detroit, Flint and other areas of Michigan where their local education systems have failed miserably.”
Gregory said in analyzing wealth disparity, it’s important to not forget the long history of a major source of this disparity: Slavery.
“The descendants of the slave owners inherited much of the wealth and passed it on through their children to the current descendants at compounded earnings for almost 400 years which included years of slavery, Jim Crow, lynching, segregation, the Ku Klux Klan and more currently excessive incarceration and in many places inferior schooling sometimes under state control,” Gregory said.
He added, “Estimates of the damages are huge. Unlike the Japanese who received reparations for their imprisonment during World War II, the descendants of slaves — promised 40 acres and a mule after emancipation — received nothing. Had the descendants of slaves received reparations that was their due, the gap on white-black wealth would be much less today and will remain large and perhaps increasing until this huge inequity is addressed and racism ended.”
How do you close the income gap?
Smith offers a simple solution. “Education, education and more education,” he said. “I’m not discounting the effects of ingrained racism among certain groups in our society, who base their hiring decisions on race or religion. But I believe good education will overcome a lot of this racism because increasingly, employers could care less if you are black, white or green.”
Gregory suggests the government could help close the gap by instituting a negative income tax “whereby persons with an income below a given amount would receive a payment.” Similar proposals, he said, were popular in the 1950s and 1960s, advocated by such luminaries as conservative Milton Friedman of the University of Chicago.
“A compromise would be increasing the earned income tax credit. A higher minimum wage and measures to strengthen labor unions would also help,” Gregory added.
Black economic progress under Obama is going to be a topic of discussion years after his presidency, given that some of his critics have faulted him for not tailoring a rescue package for blacks after the crash on Wall Street.
Gregory said blaming Obama for income inequality is misplaced.
“I think Obama did what he could do and still have two successful two terms while establishing a very positive overall presidential legacy,” Gregory said.
Bankole Thompson is the host of “Redline with Bankole Thompson” on Super Station 910 AM Wednesdays and Fridays. His column appears Mondays and Thursdays.