The Surprising Cross-Racial Saga of Modern Wealth Inequality
It’s vital to note, first of all, that longer-term trends in income inequality underscore how important social wage policies that reduce overall inequality have been in addressing racial inequality. Between 1968 and 2016, African Americans, largely as a result of the victories of the civil rights movement and anti-discrimination enforcement, made significant advances into occupations and job categories that had previously kept black workers at the margins of mainstream success—when they admitted them at all. However, the reason that African Americans’ income remains all but unchanged as a percentage of whites’ income since 1968—57 percent in 1968, 56 percent in 2016—is that the gains that African Americans have made in employment and wages have been offset by intensifying income inequality in the country as a whole.
A 2018 study found that during this same 48-year span, African American median family income realized relative gains in the overall national income distribution. In 1968, black median family income ranked in the 25th centile of the national income distribution; this meant that the income of black families fell within this bottom quadrant of American families. In 2016, median black family income had moved up to the 35th centile, meaning that black median income fell slightly ahead of the bottom third of the national income distribution. A substantial gap in racial income rank remained, but it had closed significantly; the African American rank in the national income distribution had increased by 40 percent since 1968. Meanwhile, white median family income moved only from the 54th centile in 1968 to the 57th centile in 2016. Therefore, the rank gap in median family income between blacks and whites closed by 28 percent. Nevertheless, median African American income remained virtually unchanged as a percentage of median white income overall.
The main reason that the overall racial income gap remained practically unchanged was the extreme concentration of income at the top during the last half-century. Lower-income and middle-income families, both black and white, lost income in relation to the richest Americans. As the sociologist Robert Manduca points out, black median income at the 25th centile in 1968 equaled 55 percent of the national mean in that year. But in 2016, income at the 35th centile equaled only 48 percent of the national income average. So despite a notable improvement in African Americans’ median rank in the national distribution of employment and income, their position fell as a percentage of average national income.
....
Researchers have long chronicled the great differences in accumulated wealth between African Americans and whites. But they have been less successful in identifying the causes of those persistent differences. They usually argue that because the gap exists at all levels of income and education, it can’t be attributable to income disparities. As a result, they look to noneconomic factors like neighborhood differences, family size, age, and direct or indirect discrimination. But none of these inquiries really explains how those factors produce the great wealth inequalities.
....
“Racism” is an alternative to a concrete explanation; it doesn’t tell us how inequalities are produced, and in lieu of that only gives us a name by which we can group, and stigmatize, them. Patterns of racial difference in outcomes can occur for many different reasons, some of them random. Knowing what produces the truly ongoing and germane unequal outcomes behind the wealth gap is the only way we can hope ultimately to address and correct them. What’s more, recognizing that racial economic inequality is in large part a product of 40 years or more of upward redistribution and intensifying concentration of income among the already wealthy creates a different set of necessary political responses. To eradicate the racial wealth gap, we need to link up the pursuit of justice and equality for African Americans to the broader campaign to bring justice and equality to all working Americans.