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Race, Ethnicity, Wealth, and Poverty

We know about the different life chances of people of different racial backgrounds, but it's hard to sort out exactly why the outcomes are so different.
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Americans have a tough time talking about race. White Americans often hear a discussion of race as an accusation, even when it's not. Black Americans often hear speculation on whether the racial climate is improving as an attempt to deny their pain, and historic suffering. Latinos often wonder, and justifiably so, where they fit in the American conversation on race.

The black-white divide in the United States goes back to the arrival of blacks from Africa and whites from Europe in the 17th century, long before the United States was a gleam in the eye of Dutch traders, English religious refugees, and others. In the Spanish part of the hemisphere a centuries-long encounter with native peoples was already well under way. The parts of the Spanish Empire that eventually became parts of the United States... what is now California, Nevada, Utah, Arizona, New Mexico, Texas, and Florida did not become a home of plantation slavery in the way the British colonies did.

Different experiences. Different histories. Different roads to living in the United States in 2010. Today, Black, White, and Latino families of the same income have very different levels of wealth. The three groups have different levels of educational attainment, life savings, hourly wages, access to medical care, and different life expectancies.

Here's where it gets hard. We know about the different life chances of people of different racial backgrounds, but it's hard to sort out exactly why the outcomes are so different. Of course, chances are that a kid starts out in a different socio-economic position depending on his racial and ethnic background, and starting out in a more advantageous spot has an effect on the outcome. But why do the differences where these various Americans start out persist in generation after generation? If there's been government intervention from time to time to blunt the effects of historic discrimination, how come it hasn't succeeded in narrowing the gaps in American life much more than we've seen so far?

This has been a tough decade to sort out the different ways different Americans get ahead, since so many Americans of every race have been downwardly mobile for so much of the decade. The burst of the housing bubble took down the weak and the strong, people who had used their houses like ATMs and people who had just managed to squeeze through the front door with a low down payment and an exotic mortgage.

People who haven't done too badly, in relative terms, are in no mood to hear about the persistent gaps between rich and poor, or native-born whites and everyone else. But the differences are real, and while many white families have suffered terribly during this time, many of the economic indicators have dropped even more drastically among other Americans. Unemployment and underemployment have shot up among black and brown Americans. Even in the smaller home owning base, foreclosures and bankruptcies have crippled family balance sheets.

What the panelists in the recent edition of HITN's Destination Casa Blanca wrestled with through the hour is how much racial bias and structural barriers to success in American society played a role in these differential outcomes, and whether the government, at any level, had a role to play in closing those gaps.

We didn't succeed in solving those problems, but we did succeed in having a good conversation about them, and I recommend the excerpts you can find at

When testers from federal agencies and fair housing groups head out to the offices of mortgage brokers across the country they find even with similar assets, income, and credit histories, black and brown borrowers are offered mortgages with less preferred repayment terms and higher rates of interest. Are the troubled repayment histories more common in black and brown residential areas the result of less favorable mortgages, or the less favorable mortgages the result of the more frequently troubled repayment histories. The ability to use real estate as a performing asset has lifted millions of white families into middle class comfort. The inability to use real estate that way represents the single largest difference in the wealth accumulation when compared with other families of different racial and ethnic background but the same level of income.

Those cheaper, less likely to appreciate houses more frequently owned by minority families, also command lower real estate tax payments, making capital spending in minority communities harder to sustain. In school districts where the lion's share of school funding comes from real estate taxes, the lack of assessed value of the family home perversely lowers the chances for well-funded schools. It's harder to imagine a more direct correlation between the socio-economic status of today's families and the ability of their own children to move up the American economic ladder.

Lastly, widespread housing segregation makes it harder for Americans of different races to socialize in an unremarkable, organic way. That lack of exposure makes it less likely for all Americans to understand in any deep way the challenges, pressures, and joys of families unlike their own. The extent to which we have become strangers to each other, unlikely to know other Americans outside our own socio-economic stratum makes sympathy for the other even harder to achieve. Year after year, public opinion researchers ask Americans about race and opportunity, and in recent years wide, yawning gaps between blacks, Latinos, and whites have appeared when all are asked questions about continuing prejudice, continuing difficulty, and whether opportunity is open to all in America.

While black and brown Americans report that prejudice is still a factor in their lives, whites are less and less aware of it by the month. A majority of the eighty million blacks and Latinos in America may find that racial prejudice still plays a role in their lives, but the white majority thinks prejudice is less of a factor all the time. Exhibit A: President Barack Obama. If this country was still all that bad when it came to racial bias, how would the country have elected a black president?

Short answer: White Americans didn't.

Longer answer: John McCain won a majority among white voters, at about the same percentage as Ronald Reagan did in 1980. Reagan trounced Jimmy Carter. McCain lost by millions of votes to President Obama. The difference? The country has changed. The electorate is far from being as white as it was in 1980, and as the Obama campaign demonstrated, you can now lose the white vote as long as you do well enough among other Americans, and find yourself taking the oath of office on the West Front of the Capitol Building. That illustration of the changing face of America can only make a certain part of America even less sympathetic, as black and brown Americans continue to suffer from shorter lives, more frequent infant death, joblessness, lack of medical coverage, and higher poverty levels that the white citizens with whom they share this country. Electing Barack Obama was a big deal... but giving one black man a job, even a very important job, is hard to leverage against the terrifying losses of this past decade.

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