The Hidden Cost
of Being African American
Reviewed by Michael Hout
From The Washington Post's Book World
African Americans often seem cut off from the
economic mainstream. They face higher risks of poverty, joblessness
and incarceration than their fellow citizens do. Community organizing,
civil rights legislation, landmark court decisions and rising
education have advanced the cause of racial equality. Overt bigotry
has been banished from public places, and polls show that whites
harbor fewer prejudices than they used to. But these improvements
have not been enough.
How can disadvantage persist so long
after most laws, minds and practices have changed? Thomas M. Shapiro
argues in this sober and authoritative book that we should look
to disparities of wealth for the answer. Whites are wealthier
than African Americans, and whites' wealth advantage is much bigger
than their advantages in either income or education (the point
of Shapiro's earlier study, Black Wealth/White Wealth, co-authored
with Melvin Oliver). Whites start out ahead because they inherit
more from their parents, and America's racially segregated housing
markets boost whites' home equities, while depressing those of
African-American families. Shapiro, a professor of sociology at
Brandeis, takes readers through the implications of these inequities
and concludes that African Americans will not gain significant
ground in the wealth divide until inheritance and housing policies
Wealth is the sum of the important assets a person
or family owns -- home equity, pension funds, savings accounts
and investments. Wealth is better than income because it is durable.
People use income to meet daily expenses, whereas wealth accumulates.
People who have wealth tap it only to deal with emergencies or
to take advantage of opportunities -- opportunities that usually
build more wealth.
Wealth passes down from generation to
generation. The main reason African Americans are currently worse
off than whites, according to Shapiro, is that today's African
Americans inherited less wealth from their parents than today's
whites did. It is not hard to see why: The generation of African
Americans now passed away accumulated less wealth because discrimination
in their day kept most of them poor and denied them opportunities
other Americans enjoyed.
The disparity in wealth not only
persists, it mushrooms. Without a cushion of inherited wealth,
emergencies hit harder, and people who have no nest egg have to
let opportunities pass by. Because of the wealth deficit, African
Americans find themselves more vulnerable to shocks and less able
to capitalize on breaks than whites with the same income. So the
next generation will inherit less, too. The wealth gap will not
close anytime soon.
Shapiro blends statistical analysis
and case studies of selected families in Boston, St. Louis and
Los Angeles, showing the relative importance of wealth and the
disparities in inheritance by class and race. He also supplies
some individual case studies, which give depth and humanity to
Wealth begins at home. A home-equity loan can
see a family through a spell of unemployment or leverage an investment.
Millions of middle-class Americans use tax-deductible home-equity
loans to pay for their children's educations. Others buy rental
Because neighborhoods are racially segregated,
African Americans' homes do not grow in value as fast as whites'
homes do. Shapiro calculates that housing segregation costs African
Americans tens of thousands of dollars in home equity. Homebuyers
look for amenities commonly found in predominantly white neighborhoods.
They pay extra for parks, convenient shopping and attractive views.
Parents pay huge premiums for what they perceive to be good schools.
Few parents can judge schools objectively. Instead, they use easy-to-observe
markers, including the race of the students. These preferences
raise the costs that first-time homebuyers face when they attempt
to buy houses in those mostly white neighborhoods. Economic theory
implies that if whites continue to waste money on irrational prejudices
like this, market forces will eventually undo the racial disparity
in wealth. But the experience of the last 50 years suggests otherwise.
Inequality has grown because each new generation has been willing
to pay a higher premium for these amenities. The market doesn't
punish discrimination; it rewards it.
Whites fail to see
any injustice in these differences. Shapiro's interviews convinced
him that whites hide their privilege from themselves and, accordingly,
feel no guilt for the hidden costs they impose on African Americans.
People who inherited tens or hundreds of thousands of dollars
nonetheless told Shapiro that they were self-made and self-reliant.
They proudly told him how the assets they inherited grew under
their stewardship. White parents use wealth to send their children
to private schools or to give their adult children down payments
for homes. They do not see how such practices hand today's inequalities
on to the next generation.
Shapiro argues convincingly that
these private matters spill over into public investment, too.
He interviewed one upper-middle-class woman who told him that
she was unconcerned with troubles in the local public school because
she never intended to send her children there. Shapiro points
out that her indifference -- and that of others like her -- is
just one more obstacle in the path of people trying to improve
local public education.
Families and generations are at
the core of Shapiro's analysis. So I was surprised that he did
not directly address how marriage and family structure fit into
the cycles of accumulation, inheritance and investment. Married
couples accumulate more wealth than single parents do, according
to other researchers. That suggests to me that African-American
family issues must play a role in the wealth gap.
does connect the wealth gap to public policy. Today's tax law
exacerbates the inequality of wealth in the United States. Coming
out of World War II, the federal government encouraged home ownership
for all and increased the country's rate of homeownership from
44 percent in 1940 to 62 perent in 1960. (It inched up to 68 percent
in 2003.) Since 1982, national tax policy has turned conservative
in ways that foster what Shapiro labels "opportunity hoarding."
He floats several proposals -- such as overhauling inheritance
laws -- that might help the country get back on the track of broadening
opportunity. Few of his proposals may be tried in the current
political climate, where far more pressure goes toward abolishing
inheritance taxes altogether. Yet by giving such a frank and probing
appraisal of the long-term damage wrought by unequal wealth, Shapiro
continues to press the case for resolving America's most stubborn
and profound source of racial division.
Copyright 2004, The Washington Post Co. Reprinted with permission.
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