Commentary: What We Get Wrong About Closing the Racial Wealth Gap
For decades we have been told that hard work and greater effort on the part of black Americans, not systemic reform, is the key to closing the racial wealth gap. Earlier this month a poll from The Economist/YouGov found that 40% of whites think that blacks could be just as well off as whites if they only tried harder.
In a new report I co-authored with William Darity of Duke University and Darrick Hamilton of the New School, ���What We Get Wrong About Closing the Racial Wealth Gap,” we state it to be false that trying harder, mimicking “successful” ethnic groups, or a number of other myths we address will correct the issue of growing wealth disparity. In our findings we systematically demonstrate that the narrative that places the onus of the racial wealth gap on black defectiveness is false in all of its permutations.
Here are a few examples of the most widespread and damaging myths about the racial wealth gap:
Blacks just need better jobs and education
On average, a black household with a college-educated head has less wealth than a white family whose head did not even obtain a high school diploma. This is in part because black students are more likely to borrow student loans and take on higher student loan debt, and are more likely than white students to drop out of university because of finances.
Some believe that if higher education is not the panacea for the racial wealth gap, then hard work can close the difference. Yet white households with an employed head have more than 10 times higher wealth than similar black households. Furthermore, white households with an unemployed head have a higher net worth than black households with a head who is working full time.
We need to start banking black
The existing infrastructure of black-owned banks lacks the capacity to produce wide and substantial increases in black wealth. Even if they were to quadruple their assets, black banks would not be major players on the American economic landscape, never mind the global landscape. Moreover, since black wealth is so low in the first place, it is a fantasy to anticipate that the existing black consumer base could build a black-owned equivalent of JPMorgan Chase.
There’s no gap
We also dismiss the suggestion that the growing numbers of black celebrities prove that the racial wealth gap is closing. In reality, the multimillion-dollar fortunes of Oprah Winfrey, Jay-Z, and LeBron James has only covered black poverty with a decadent veil, doing little to help close the racial wealth gap for a broader black America.
In addition, black celebrity has largely been placed at the vanguard of an imagined black power in the corporate world. While many of the wealthiest black Americans derive their fortunes from some form of entertainment, they frequently are portrayed as major corporate owners, without it being made clear how much stake or control they have in a given company. When a handful of African Americans are held up in the media as evidence of significant black corporate power, the necessity of adopting policies to eliminate the racial wealth gap becomes harder to establish.
What can be done?
Solutions for confronting the racial wealth gap will likely require a major redistributive effort or other public policy intervention to build black American wealth. This could take the form of a race-specific initiative like a dramatic reparations program, or a program that addresses the social destructiveness of growing wealth inequality for the entire American population—which would disproportionately benefit black Americans due to their exceptionally low levels of wealth.
The groundbreaking idea of “Baby Bonds,” created by Darity and Hamilton, is a system whereby the government would put money into an account for all children in the U.S. at birth based on their familial wealth level. Those funds would become accessible to them when they turned 18.
The imagination required to move toward closing the racial wealth gap in America requires a daring that moves us beyond mythology. Real national programs, not myths, will move us toward answers for closing the gap in wealth between the races.
Antonio Moore is an attorney based in Los Angeles and one of the producers of the Emmy-nominated documentary Freeway: Crack in the System. He has contributed pieces to Huffington Post, Newsmax, The Grio, and Inequality.org on the topics of race, mass incarceration, and economics. Follow him on Twitter and YouTube.