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The Rich Get Richer and ...The Problem of Race and Inequality in the 1990s (1)

by Samuel L. Myers, Jr.


At the beginning of the 1980s, many Americans thought of racial inequality in the same terms as we now think of the threat of communism -- it no longer exists. The ranks of corporate America apparently were swelling with articulate, well-trained African Americans, Hispanics, Asians and Native Americans. These minority group members appeared to be gaining a major piece of the political pie. There were more black elected officials, for example, at the beginning of the 1980s than there had ever been in America's history. "Racial inequality? What's the problem?" That seemed to be the response.

The problem of race nags America. In just the short span of the past several years, the traditional mechanisms for reducing racial inequality -- preferential hiring, affirmative action, set-asides, quotas -- have been struck down repeatedly in the courts. Meanwhile, many indicators of social and economic well-being of minority group members are on the downturn. Income gaps between black and white family heads are widening; the fraction of black families headed by females and the proportion of black children growing up in poverty soar; the non-white/white gap in infant mortality rates widens; prisons are bunting at the seams with increasing numbers of young black and Hispanic males who have virtually made careers of such illegal pursuits as drug selling and weapon sales. The problem of persistent racial inequality nags because it remains still unresolved after centuries of frightful attempts to put it all behind us. Thus, the words of the great American scholar, W.E.B. DuBois, sounding the alarm at the beginning of this century, remain true today. "The problem of America in the twentieth century," said DuBois, "is the problem of the color line."

In 1992, the color divide continues to exist, but with a new twist. White and non-white America share unequally in the wealth of the nation, but there are visible "successes" that have been achieved using the color divide itself as the basis for rewards. Some people call this reverse discrimination. I call it a race-based strategy. Whatever we call it, the vast majority of Americans do not like it. The fundamental dilemma for resolving the nagging question of race in our times is to develop non-race-based strategies for reducing racial inequality.

The Rich Get Richer...

Much has been said in recent years about the fact that during the 1980s the rich got richer and the poor got poorer. The reasons for this include changes in the tax laws, the deregulation of many industries, the expansion of banks into risky investments vehicles, the reduction in real welfare benefits and related social programs, and the decline in federal support for state and local investments in poverty-reduction efforts. In other words, the rich got richer and the poor got poorer because the public policies of the 1980s favored the rich and disfavored the poor. What has not received much attention, however, is the racial disparities inherent in the numbers that tell us that the rich got richer and the poor got poorer. The numbers are all readily available from the various publications of the Bureau of Census Current Population Reports. What they show is that the refrain should be: "The rich got richer and the black poor got poorer." (2)

In 1967, 2.9 percent of white families had real incomes, standardized on 1990 dollar values, of less than $5,000. Ten years later, 2.1 percent of white families had incomes below $5,000, and by 1990, 2.5 percent of white families had incomes below this level. There were slightly fewer whites at the bottom of the income distribution in 1990 than there were in 1967. In the period, there were substantial changes in the percentages of whites who were advantaged. The proportion of white families with incomes in excess of $100,000, in real 1990 dollars, soared from less than 2 percent in 1967 to almost 6 percent in 1990. Just during the 1980s this well-off fraction of the white population expanded from around 3 percent in 1980 to 6.1 percent in 1989. The white rich got richer!

The black rich, representing a correspondingly smaller percent of the black population, also got richer. Four-tenths of one percent of black families had incomes above $100,000 in 1967. Five-tenths of one percent of black families had incomes above $100,000 in 1980, and by 1990, 1.3 percent of black families had incomes in excess of $100,000. So, the black rich got richer too, but the black poor got poorer. In 1967, 8.9 percent of black families had incomes below $5,000 in real 1990 dollars. By 1977, only 7.3 percent of black families had such low incomes, but this percentage jumped to 10.1 percent during the 1982 recession and never went down. Over the decade of the 1980s we saw an upward creep of the percentage of black families with incomes at the bottom of the income distribution. By 1990, almost 12 percent of black families had incomes below $5,000. The rich -- both white and black -- got richer, and the black poor got poorer!

There is a very clear racial dimension to the notion that "the rich got richer and the poor got poorer." Yet, the majority of Americans appear to believe that racial equality means making the average person worse off in order to make the black poor better off. Thus, the importance of the fundamental dilemma identified above. How do we develop non-race-based strategies for reducing racial inequality? In what follows, I will discuss what is wrong about the approaches we have taken toward dealing with race and poverty, and I hope to challenge you to think about what we can do to reduce racial inequality without creating even greater hostility than presently exists about the matter.

Education and Earnings

Everybody agrees that the schools are a mess. Experiments such as Baltimore City's agreement to have a private firm run several local public schools are enthusiastically endorsed. The drive toward a mandatory Afrocentric curriculum is gaining momentum. The promise of a national private school system is attracting support from top leadership at such respected institutions as Yale University. From the corporate board rooms to the inner-city housing projects, there is an almost irrational rush to accept whatever is "new" in addressing the problems of the schools.

The schooling that most young black children are receiving is not a mess simply because of the low pay of the teachers, the difficulty in attracting top talent to ghetto schools, mismanagement or lack of resources, poor parental involvement, drugs, crime, violence, or the breakdown of traditional values and the nuclear family. No -- increasingly the central problem is what we are teaching in school is not particularly relevant to the needs of the job market, or the realities of the changing marketplace. One important need of the job market, for example, is workers with the ability to think critically and to analyze abstractly using numerical computation skills. We don't teach that to inner-city students, and if we were to, there may well be more riots, racial tension, and more conflict in our neighborhoods than we have seen already in South Central Los Angeles. Why? Well, once we teach these poor people at the bottom of the social and economic heap how to think critically, they really will criticize. They will wake up to the significant racial inequalities in America, and they will rebel. They would vote more often, but they would vote into office someone very unlike you and me. They may decide that they want Sister Souljah to be their congresswoman.

A related reality of the changing marketplace is that, increasingly, the route to upward mobility is ownership. Not just ownership of flashy cars and clothes, for which many in our poorest communities nonetheless go into debt to finance. No, I mean ownership of property. I mean ownership of productive, income-earning assets. The rich got richer not simply because their salaries went up. The rich, at least the white rich, got richer because of increases in the share of their incomes that accrue from productive assets. In fact, the black poor and the black non-poor share one important characteristic -- they do not own anything that produces income except their human capital. Yet, nowadays, the rich get richer not because they have better jobs resulting from going to better schools. The rich get richer primarily because they own the income-producing assets that are reshaping how we do business in the world economy.

So, even if we miraculously transformed the public schools into the vibrant, intellectually stimulating places that the rich and near rich can afford, we still will not have addressed the issue of why the rich are rich. It would be positive, of course, to have a cadre of thinkers with powerful analytical skills from the inner city, and we ought to inspire our next generation of teachers to invest in the challenge of bringing critical thinking skills to the poorest of Americans. However, let's also be aware that we have to be prepared to confront the logical consequences of instilling these valuable capabilities in our disadvantaged youth. They will figure out that a college degree, or an MBA, is not the key factor it takes to make it in America.

The matter of ownership of income-producing assets aside, education does matter in the determination of wage and salary earnings. Greater educational attainment does yield higher wages and salaries. Unfortunately, however, the relative earnings position of young black males with little education has deteriorated substantially since 1970. In that year, for every dollar that a white male under 25 years of age who had not graduated from high school earned, similarly situated black males earned $1.11. By 1988, this had disappeared completely. For every dollar young, uneducated white males earned, blacks earned only 35 cents.

It is tempting to blame this deterioration on low educational attainment, or perhaps on low labor force attachment among young black males. The trouble with this interpretation is that the position of better educated black males deteriorated as well. In other words, while education matters, the problem of racial inequality cuts across different levels of achievement among black males in America.

The Marginalization of Black Males

This leads us to the issue of the marginalized status of young black males in American society. Before the presidential campaign got into full swing, there was a brief upsurge of public interest in the plight of the black male. There was the usual recitation of the bleak statistics on crime, imprisonment, and related social ills that disproportionately affect young black men in America. Many black fraternal organizations, church groups, social clubs, and community organizations rushed to lend a hand through mentoring programs, scholarships, and other strategies hoping to save "an endangered species." The statistics continue to point to increasing incarceration rates, a rise in homicide rates, escalating mortality rates, low labor force participation rates, and a whole host of other social and economic indicators of a severe crisis among black males in America.

Mounting evidence, moreover, points to a causal relationship between the deterioration of the position of the black male and the destruction of the black family -- and white America is implicated. Many black leaders see the problem as one of white America's perceptions of blacks. Moreover, after a feast of highly publicized incidents portraying black men as crooks, drug addicts, thieves -- and seeing Marion Barry taking a hit from a crack cocaine pipe -- it is no wonder that whites have such a negative image of blacks.

The concern that whites have about black males is based on fear. They are afraid of the hoodlums, the drug dealers, the young gangsters who have adopted American materialism with a deadly flair. We cannot construct sufficient prison space or execute enough persons in order to remove enough criminals to make our streets truly safe. Moreover, black males are not wanted or useful in our increasingly technology-oriented economy. Unlike previous eras, in which agriculture or manufacturing provided jobs for large numbers of black manual laborers, the new era, dominated by service and high-tech industries, offers few jobs for these workers. Young black males no longer occupy large quarters of the lower tiers of the labor market. Almost by design, they are disappearing from the labor market altogether.

The "social managers" are also involved -- especially public sector administrators and policy analysts trained by academic "social policy experts." They have defined the parameters of the debate about the "problems of black males" in ways that may preclude creative strategies for solving these problems. They have embraced the "culture of poverty" perspective and accepted the notion that pathology and dysfunction are at the root of the problem. Yet, factors such as the decline in the economic opportunities of young black males and the resulting destabilization of black families seem more germane to explaining the crisis at hand. While enhancing self-esteem and increasing black responsibility may be desirable, it is not likely to solve the problem of black poverty.

The Vulnerability of Black Families

Earnings gaps among family heads have widened in recent years too. The ratio of black to white family income in 1990 was below what it was for each year from 1967 through 1980. In relative terms black families are losing economic ground, and if this decline in the relative economic status of black families is projected into the next decade, the result will be a persistence of racial income inequality that turns the clock back to the income position black families experienced 30 years ago. Coupled with changes in family structure, the black family is more vulnerable today than it was at the start of the 1960s.

At least part of the explanation for the decline in the economic status of black families is related to the increasingly marginalized status of black males. This marginalization translates into fewer marriageable mates, and thus fewer opportunities for the formation of two-parent families. To put it simply, as crime and violence and black male mortality increase, black families become more unstable and less able to become stable. This reduces the economic base for the black family unit and the result is greater poverty among those at the bottom.

The existing pattern of marginalization of black males and the growth in female-headed families, and the resulting decline in family incomes and the rise in racial inequality, suggest a pessimistic outlook for the future. This sad conclusion can be averted only if the growth of poor, female-headed families is curbed. As long as young men continue to be marginalized, however, the prospects for increasing the number of black families with male heads seems remote. Strengthening female-headed families, while obviously beneficial in the short-run, offers little hope for reducing the earnings gap further. Since the culprit in this link remains the deteriorating position of young black males with little training or education beyond high school, the solution must lie in salvaging what otherwise could be a lost generation of men. Failure to reverse this pattern will only mean that future inequality will be more difficult to eradicate.

Concluding Comments

Let me summarize some central conclusions that can be drawn from the preceding arguments:

1. The rich got richer but it was the black poor that got poorer. Thus, there is an explicit racial dimension of the inequality problem.

2. The black poor are not being trained to think critically, to become owners or managers or productive workers. Indeed, conventional public policies focus on the black poor's alleged cultural deficiencies and ignore the potentials that they have in contributing productively.

3. The problem is not simply one of class, since well-off blacks also suffer from lack of ownership of productive resources and are also stigmatized in our society because of their race.

4. Still, the black poor are structurally caught in a poverty cycle that would be difficult to break without addressing the question of their usefulness in the economy. This is particularly true of young black males.

5. The impact of the marginalization of young black men is to contribute to the increase in female-headed families which further reduces the resource base of black families and contributes to widening in earnings inequality.

6. Even if there were income equality, however, there still would be unequal wealth because of the long-standing legacy of lack of access for blacks to productive capital in America

What must be done to develop the kinds of non-race-based strategies for reducing racial inequality that I mentioned at the outset? I'll leave you with two beginning points. First, we must recognize that poor blacks themselves should be involved in helping to solve the problems of inner-city communities. We need them to assist in a meaningful way in the design, formulation and implementation of solutions to the vast array of problems that plague communities. We need to listen to inner-city residents and to learn to think about the problems of violence and drugs among young black males within the broader context of the poor opportunities, declining social support systems, and increasing economic distress. We need to embrace young black males as part of the solution.

It seems to me, also, that the solution will entail a revolutionary discussion of ownership. Until blacks believe that they have a significant stake in ownership of their own communities, they will continue to despair and erupt sporadically in what white America views as irrational, self-defeating violence. The fact that we have not had many outward attacks of violence on white America over the past 25 years misses the whole point of what happened in Los Angeles. The point is that there has been inward violence mounting for some time. The indicators of economic inequality are like a barometer of the potential for social revolt. Violence by blacks against blacks has failed to get our attention. Violence by blacks and other racial minorities in the teeming urban cores of our nation against the rest of us will certainly get our attention if we are foolish enough to wait for it to happen.


(1)This paper is adapted and reprinted with the permission of the Editor from a previously printed version that appeared in Law and Inequality: A Journal of Theory and Practice, XI, 2 (June, 1993).

(2) The empirical results discussed in this paper are based on research by the author working jointly with William A. Darity, Jr. of the University of North Carolina at Chapel Hill. A monograph on trends in racial inequality in the United States, based on the joint research, is forthcoming. Research support for the monograph from the Upjohn Institute is gratefully acknowledged.