By Ryan Velez
Many have fallen back on the tried-and-true excuse that those in lower class positions can improve their positions by working hard like those on top have, the old mantra of “pulling things up by one’s bootstraps.” As time goes on, this concept has taken a lot of flak, and a new study reported on by Channel 3000 is another major shot, suggesting that middle-class status has more to do with inheritance than anything else.
“For centuries, white households enjoyed wealth-building opportunities that were systematically denied to people of color. Today our policies continue to impede efforts by African-American and Latino households to obtain equal access to economic security,” Amy Traub, report co-author and associate director of policy and research at Demos said in a statement. “When research shows that racial privilege now outweighs a fundamental key to economic mobility, like higher education, we must demand our policymakers acknowledge this problem and create policies that address structural inequity.”
Explaining this is boiling down to looking at history on both sides of the equation, not just to the systemic discrimination that has harmed so many people of color, but what allowed so many white people to build wealth. Part of this is due to public policies such as the GI Bill, which mostly helped white veterans attend college and purchase homes with guaranteed mortgages. In essence, this leads to the foundation of the middle class as we know it, but many of these policies excluded people of color. As a result, when wealth was transferred between generations, whites were getting nearly 10 times as much to start with.
Professor Thomas Shapiro, who directs the Institute on Assets and Social Policy and is the Pokross Professor of Law and Social Policy at The Heller School for Social Policy and Management at Brandeis University, has been studying this topic since the early 1990s and co-authored the study. One of the interesting things about the study is many of the excuses said about why people of color are not making these levels of money are shown not to carry much weight. For example, whites working part-time under the age of 55 or unemployed have more wealth at the medium than African-Americans and Hispanics working full time. In addition, African Americans and Hispanic families have the same amount of wealth as white families that are high school dropouts, suggesting that college going and degree rates don’t close the racial wealth gap.
So, if working harder isn’t fixing things, spending less isn’t fixing things, and even attending college isn’t changing things, what are African-Americans and Latinos to do? “I think on a local, regional, and state level, there are different levers that we have to work with. I think on a local level, housing markets are the real key. I think attempting to break down racial segregation as much as possible in a community really serves the sustainable long-term interests,” Shapiro said. “It’s residential segregation that really drives the way that housing equity is color-coded and it’s abundantly clear from any study that’s ever looked at data.”