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The Gap between Blacks and Whites Is Growing in the US

The 50-year anniversary of the march on Washington was celebrated recently in the US, but the famous ‘dream’ of its inspirer, Martin Luther King, is still a dream: over recent decades, the level of economic and social inequality between whites and African Americans has grown

Half a century ago, on August 28, 1963, about 300,000 American citizens, most of them African Americans, gathered by the Lincoln Memorial in Washington, DC, to transform the rights declared in the Declaration of Independence – ‘life, liberty, and the pursuit of happiness’ – from declared values to an American legal system that doesn’t racially discriminate against its citizens.

A year later, after the Civil Rights Act and the Voting Rights Actwere accepted, the white and the black populations of the US became equal de jure. This equality is demonstrated by vivid examples: the country is ruled by an African-American president; Baltimore, Denver, and Philadelphia have black mayors; and Oprah Winfrey entered the list of US billionaires in 2013.

But how equal are the economic and social statuses of the white and black populations today? According to The Economist’s data, in 2000 black household median income was 64% of that of white households. In 2011 this correlation was 58%.

Economic inequality, measured by the size of household net worth, has grown even stronger. Blacks were the group hit hardest by the mortgage crisis of 2008. In 2005 the median net worth of black households was 11 times smaller than white households’. In 2009, this gap grew 20-fold, The Economist says.

Economic inequality is accompanied by considerable social inequality. Today 72% of black children are born outside marriage (25% of white children), and most of them go on to be raised in single-parent families. A 17-year-old black child reads and manipulates numbers about as well as a white 13-year-old. Hence, the probability of white school pupils entering college is considerably higher as compared to black students. As a result, white Americans have a higher educational level and a higher social status, which naturally leads to a higher wealth level.

But where is the thread that starts to tangle this web of socio-economic inequality? Webelievethatseveralsuchthreads exist.

First, undoubtedly the lower socio-economic status of blacks as compared to whites can be considered as an echo ofsegregation policy of the 1960s. But why is this echo still audible today when whites and blacks obtained de jure equal rights as long as 50 years ago?

An important factor here is so-called ‘identity economics’: blacks and whites still identify themselves with different social groups, and social and economic inequalityis reproduced. George Akerlof (Identity Economics, 2010), a Nobel laureate in economics, proved that in today’s Unites States, black students intentionally avoid excelling in school in order to avoid being mocked by their black friends. In addition, Akerlof showed that school teachers reprimand black students more often since they believe that black students are more inclined to break rules of behaviour.

As a result, black school students are less motivated to achieve high academic results. And decreased motivation directly corresponds with the subsequent probability of college enrolment and higher earnings.

Moreover, employers are inclined to hire white employees since they believe whites are more disciplined and loyal. This also influences the motivation of blacks to make an effort to improve their human capital in order to be employed in higher paid positions.

So, identity inequality is the second thread tangling the web of socio-economic inequality in the US.

Barack Obama, in his speech dedicated to the 50th anniversary of the march on Washington, declared that ‘we would dishonor those heroes [of the 1960s] as well to suggest that the work of this nation is somehow complete…black unemployment has remained almost twice as high as white unemployment… The gap in wealth between races has not lessened, it's grown.’

The President said that the government aims to eliminate the inequality between whites and blacks. But obviously, eliminating inequality won’t take place without eliminating identity inequality. And this social mechanism isn’t controlled by state actions or legal tools.

 

September 04, 2013