“Racial Wealth Gap Persists Despite Degree, Study Says”…Now What?

The story ran as the front page lead in the New York Times more than a week ago, and was promptly ignored as the more pressing matter of criticism Donald Trump’s erudition in condemning the violence in Charlottesville obsessed the media:

“The long-term trend is shockingly clear,” said William R. Emmons, an economist at the Federal Reserve Bank of St. Louis and one of the authors of the report. “White and Asian college grads do much better than their counterparts without college, while college-grad Hispanics and blacks do much worse proportionately.”

A college degree has long been recognized as a great equalizer, a path for minorities to help bridge the economic chasm that separates them from whites. But the report, scheduled to be released on Monday, raises troubling questions about the ability of a college education to narrow the racial and ethnic wealth gap.

“Higher education alone cannot level the playing field,” the report concludes.

Great. What will level the playing field, and if the only solutions are ethically flawed, can the nation ethically accept that the playing field cannot be leveled? Is it necessary that all races achieve identical levels of success? Does the fact that a race, or an ethnic group, either exceeds or falls short of statistical parity signal that draconian measures must be undertaken by the government? Are we really committed to results based policies, or opportunity-based policies?

In the Times print version, there was a chart that labelled, among other things, Asian families as “over-represented” among wealthyl households headed by a college grad. “Over-represented” is a provocative word, suggesting that something is wrong with Asian American achieving beyond what pure statistical analysis would predict. Is it so unimaginable that the group itself may have something to do with its success—that its culture and values may allow it to be “over-represented”?

No, it isn’t unimaginable, but it is inconvenient and politically explosive. If culture and values can explain over-achievement, it will be difficult to avoid the conclusion that culture and values also play a part in under-achievement as well. The Times report (I haven’t read the whole study)  doesn’t hint at such a conclusion, while citing many other potential causes:

Researchers have repeatedly found discrimination in the job market. When two nearly identical résumés are sent out, for example, it has been documented that the candidate with a white-sounding name receives more callbacks than the applicant with a black-sounding name.

Discrimination like this and other factors contribute to the persistent and substantial pay gap between whites and minorities. Blacks, for instance, hold a disproportionate share of government jobs — a sector that has shrunk in recent years and provides fewer opportunities for big wage gains. Blacks have fewer advanced degrees, and the ones who do are more often in lower-paying fields or graduates of colleges with lesser reputations.

“Blacks and Latinos at all education levels, including college and advanced degrees, earn less than their white counterparts, which means lower lifetime earnings” and less ability to save, said John Schmitt, research director at the Washington Center for Equitable Growth, who reviewed an advance copy of the report.

Blacks and Hispanics are also less likely than whites to inherit money or receive help from their parents to cover a tuition bill or a down payment on a house.

William A. Darity Jr., a professor of public policy at the Samuel DuBois Cook Center on Social Equity at Duke University, points out that a family headed by a black college graduate has less wealth on average than a family headed by a white high school dropout.

That last fact is especially discouraging.

The relative disinterest of the news media in the implications of the report is troubling, or perhaps I should say its disinterest in pursuing an open and honest discussion of what the implications are, and what new policies should be considered. The status quo, with historically oppressed and disadvantaged groups perpetually lagging behind and perpetually blaming white society for their persistent plight, is a recipe for chaos, generating shrill and divisive prescriptions like this one, from Chanelle Helm,  a Black Lives Matters leader in Louisville:

Some things I’m thinking about that should change (in that Southern, black grandmama voice):

1. White people, if you don’t have any descendants, will your property to a black or brown family. Preferably one that lives in generational poverty.

2. White people, if you’re inheriting property you intend to sell upon acceptance, give it to a black or brown family. You’re bound to make that money in some other white privileged way.

3. If you are a developer or realty owner of multi-family housing, build a sustainable complex in a black or brown blighted neighborhood and let black and brown people live in it for free.

4. White people, if you can afford to downsize, give up the home you own to a black or brown family. Preferably a family from generational poverty.

5. White people, if any of the people you intend to leave your property to are racists assholes, change the will, and will your property to a black or brown family. Preferably a family from generational poverty.

6. White people, re-budget your monthly so you can donate to black funds for land purchasing.

7. White people, especially white women (because this is yaw specialty — Nosey Jenny and Meddling Kathy), get a racist fired. Yaw know what the fuck they be saying. You are complicit when you ignore them. Get your boss fired cause they racist too.

8. Backing up No. 7, this should be easy but all those sheetless Klan, Nazi’s and Other lil’ dick-white men will all be returning to work. Get they ass fired. Call the police even: they look suspicious.

9. OK, backing up No. 8, if any white person at your work, or as you enter in spaces and you overhear a white person praising the actions from yesterday, first, get a pic. Get their name and more info. Hell, find out where they work — Get Them Fired. But certainly address them, and, if you need to, you got hands: use them.

10. Commit to two things: Fighting white supremacy where and how you can (this doesn’t mean taking up knitting, unless you’re making scarves for black and brown kids in need), and funding black and brown people and their work.

I read this, and find myself wondering if one of the reasons for that discouraging study’s results is the increasing influence of voices like Chanelle Helm’s.

47 thoughts on ““Racial Wealth Gap Persists Despite Degree, Study Says”…Now What?

    • They’re discrete populations: 59% of white families are in the top 50% of all families (41% of white families are among the bottom 50%), 51% of Asian families are, etc.

      One question about the chart is, how did all four groups presented increase their share of the top 50%?

      • One question about the chart is, how did all four groups presented increase their share of the top 50%? I grasped what they were trying to present, but that particular part doesn’t make sense. What’s left out on that graph are several tracked groups. Off the top of my head I can think of Native American, Alaskan Native and Pacific Islander. They would have to have gone down significantly to have mattered, so I don’t think that’s the case.

        The other problematic part is that most Hispanics identify as white, native, or mix. Hence the term “non-Hispanic White” on many graphs. Not using it here makes it unclear.

        • My guess is that “upper half of wealth distribution” actually means “greater than average income/net worth” (I’m not sure what measure the study used). So instead of measuring data points above the median, they are measuring data points above the mean, and each measured group was able to increase their relative share because the population as a whole increased the proportion of data points above the mean.

          If that makes any sense at all, the stats class I took in high school 13 years ago may have actually paid off.

          • I understood that they were talking percentiles, but at first it didn’t make sense that every could could increase – then I realized a key point. The mean of the products of group size and percentage over 50th percentile of that respective group must remain equal to 50%.

            What has changed along with distribution is the group size too. The fraction of the population that is White is down, Asian is moderately up, Hispanic is way up and Black is flat. In spite of the improving lot of Hispanics, they are predominantly below the 50th percentile, so the increase in Hispanics as a fraction lowers the product of the group size and faction above the 50th percentile. Further, there are fewer whites (as a fraction) so a small 1% increase means that there are fewer, total white families over the 50th percentile.

            • When I see percentages being used like this, warning flags go up everywhere about statistically misleading claims and smoke and mirrors. Whether or not their claims have any merit…if they can’t be clear in their communication of the stats, why should I trust the claims.

              That being said: The market works. It works slowly. No, I wouldn’t expect a perfectly proportionate distribution of wealth across the ‘races’ in a mere handful of generations. The beauty of a free market is, is even if a handful are getting insanely wealthy, EVERYBODY is getting wealthier than previous generations.

    • You’re not supposed to understand it Tex, you’re supposed to accept any interruption of the statistical data as fact share it with the world and adjust your belief structure appropriately; if not, you’re a heretic and worthy of public scorn. 😉

  1. “Researchers have repeatedly found discrimination in the job market. When two nearly identical résumés* are sent out, for example, it has been documented that the candidate with a white-sounding name receives more callbacks than the applicant with a black-sounding name.”

    I just want to point out that the Times not only used the soft accent of the french spelling of resume, they incorrectly did it twice. So for a bilingual reader like myself, the word read Rey-sum-ey. I chuckled.

    But more than that, this is only true of certain studies… And I have a certain innate distrust of studies, particularly ones that haven’t been replicated and follow a political ideology. Much more worthy of consideration, I think, are practical examples… Like in Australia, where the government instituted a blind resume program (that is, the names and identifying markers would be scrubbed from resumes before presentation to hiring managers), because they thought a reason why women and minorities weren’t proportionately represented in their workforce was discrimination, and this would at least help. What they found was that blind hiring actually further disenfranchised women and minorities, because their progressive hiring managers were already doing all they could to put a dash of spice into their workforce artificially, and scrubbing the identifiers hampered their ability to discriminate.

    They canned the program, of course.

    Regardless, I understand that this isn’t representative of private, American businesses, but I think it’s food for thought.

    • Do you have a cite that talks about the Australian study? I’m intrigued to read it.

      Regardless, I understand that this isn’t representative of private, American businesses, but I think it’s food for thought.
      Actually, it is. Hence the recent google memo. I’ve worked for two large corporations. One was once headed by Carly Fiorina, and she had a personal, heavy hand in pushing the agenda there. It was killed by her replacement. My present employer is headed down the road now towards more aggressive women recruitment.

      • “Do you have a cite that talks about the Australian study? I’m intrigued to read it.”

        Remember that it was an exercise in practice, and specifically not a study.


        “”We anticipated this would have a positive impact on diversity — making it more likely that female candidates and those from ethnic minorities are selected for the shortlist,” he said.

        We found the opposite, that de-identifying candidates reduced the likelihood of women being selected for the shortlist.

        The trial found assigning a male name to a candidate made them 3.2 per cent less likely to get a job interview.

        Adding a woman’s name to a CV made the candidate 2.9 per cent more likely to get a foot in the door.

        “We should hit pause and be very cautious about introducing this as a way of improving diversity, as it can have the opposite effect,” Professor Hiscox said.”

          • That summary tho….

            “This study assessed whether women and minorities are discriminated against in the early stages of the recruitment process for senior positions in the APS, while also testing the impact of implementing a ‘blind’ or de-identified approach to reviewing candidates.

            Over 2,100 public servants from 14 agencies participated in the trial[1] . They completed an exercise in which they shortlisted applicants for a hypothetical senior role in their agency. Participants were randomly assigned to receive application materials for candidates in standard form or in de-identified form (with information about candidate gender, race and ethnicity removed).

            We found that the public servants engaged in positive (not negative) discrimination towards female and minority candidates:

            Participants were 2.9% more likely to shortlist female candidates and 3.2% less likely to shortlist male applicants when they were identifiable, compared with when they were de-identified.

            Minority males were 5.8% more likely to be shortlisted and minority females were 8.6% more likely to be shortlisted when identifiable compared to when applications were de-identified.

            The positive discrimination was strongest for Indigenous female candidates who were 22.2% more likely to be shortlisted when identifiable compared to when the applications were de-identified.

            Interestingly, male reviewers displayed markedly more positive discrimination in favour of minority candidates than did female counterparts, and reviewers aged 40+ displayed much stronger affirmative action in favour for both women and minorities than did younger ones.

            Overall, the results indicate the need for caution when moving towards ’blind’ recruitment processes in the Australian Public Service, as de-identification may frustrate efforts aimed at promoting diversity[2].”

  2. As for “a family headed by a black college graduate has less wealth on average than a family headed by a white high school dropout.”

    Over on Barry’s site, I had a conversation with a fellow named Charles (not the one you’re thinking of) where he posited that lead in old paint, from locations where (disproportionately) black people lived was contributing in part to the black violence rates.

    I think that’s a…. novel…. theory, but even were it true, it begged the question: “What do we do about that then?” Because if we are talking about an entire generation of lead poisoned African Americans, even immediately moving them into better housing won’t help, because lead poisoning is permanent. Do we accept that for a generation or two we have a slice of the population more prone to violence? Do we not jail them when they commit murder? It seemed that Charles was more concerned with who was to blame (not the Black people) then what to do about them.

    To bring this around to this post:

    I’m increasingly leery of the word “average”. Does Warren Buffet count as a college graduate? Just like with the 77 cent calculation, I wonder how much of that difference will start to disappear once you start to control for differences other than discrimination… I’m thinking which majors they took, what their family status is, as a start, but in particular: location.

    Whether the places that black people tend to live are lead poisoned to the point where they’re causing the “angry black person” stereotype or not, the fact of the matter is that disproportionately black neighborhoods tend to be lower income neighborhoods.

    That’s important for two reasons:

    1) If you live in an area without job prospects, it really doesn’t matter if you have a degree of not. To the best of my knowledge, degree holding welfare recipients don’t receive more than high school dropout welfare recipients.

    2) If you are lucky enough to get a job, and even luckier, it’s in your field of study, but you live and work in a financially depressed neighborhood, wages tend to correlate to the cost of living for the area you work in.

    Which is not to say that’s a good thing… Someone earning enough to have the same raw buying power in say… Harlem, as someone holding the same kind of job in say…. Silicone Valley, still doesn’t have the ability to keep their lifestyle up in Silicone Valley. All I’m saying is that were a person who was not black holding a position in Harlem, I’m doubtful that he would by virtue of his lack of melanin be making significantly larger amounts than his black counterparts. It’s not impossible… discrimination does happen… I just think it’s unlikely.

    Up here in the land of ice and snow, we have similar issues among our indigenous population. As part of the land deals that sold the vast majority of Canada to the crown, reserves were created in some of the most desolate locations in the country. On reserves, there is rarely if ever much for basic economic infrastructure. Usually a general store, perhaps a casino. And unless there are natural resources to develop, chances are that there never will be more. And so… With Canadian reserves, we don’t even have the pretense that there might be local jobs that black ghettos have, and I think that in a lot of ways, that makes the situation worse. That people are trapped in bad neighborhoods with a specter of hope, whereas on reserves, people either want to get the hell out, or they’re at least… pragmatic… about their situation.

    I’m not sure what to do about it… but it’s food for thought.

  3. “‘Higher education alone cannot level the playing field,’ the report concludes.”

    Okay, I haven’t read the story, let alone the study itself. This statement, though, is rendered irrelevant by affirmative action by universities. If you start people along on two different tracks, you can’t assume that their outcomes, either at college or beyond, will be the same.

    I guess in one sense the statement is true: “Higher education,” in the sense of an industry, cannot level the playing field. It can’t make one student as able as another, and it can’t impose outcomes once the student leaves college. All it provides is admissions on one end and diplomas on the other.

    I have some sympathy for Ms. Helm’s points 1, 2, 3, 4, and 6. The essence of the progressive view of race is that some people have had an unjust enrichment. If you believe that, then you have a duty to disgorge the money. Arguing for government intervention is not enough. Nick Hornby wrote a pretty good book, “How to Be Good,” that largely revolves around a British progressive who decides to walk the walk.

    • I actually thought that 1 wasn’t the worst idea I’d ever heard. In the case where someone doesn’t have descendants to inherit what they leave behind, donating your estate to a family in need seems like a really cool thing to do (it’s what I’ve always planned to do). Adding in a racial qualifier seems… icky…. But if there was ever a way to do wealth transfers in a way that offended the fewest people, voluntary post-mortem transfers seems legit.

      • My problem with it is that she makes it sound like a moral imperative, rather than just a nice thing to do. While I do believe I have some kind of duty to be aware of racism and fight it where I can, the idea that if I don’t have children I am obligated to will my property to a black family, rather than, say, a family I know that has a kid with leukemia, or whatever charitable endeavor of my choice, is, as you say, icky.

        And of course the list just gets worse from there.

        • More likely, they would not know how to handle the sudden wealth, and will be worse off later, having squandered everything in unwise ways.

          Take a look at how MOST poor lottery winners wind up 5 years down the road.

          Lack of basic financial education and self discipline is to blame. But if the beneficiaries had those advantages would they have qualified for the inheritance?

            • The underpinnings of that notion are that somehow, the money is used to give the rich undue influence to keep their wealth. While that may be true, there is also that principle that successful people are willing to work to get wealthy, practice delayed gratification, and in general make smart money decisions.

              This is where education comes in, from a source that has been there (parents, business men, etc.) and where the advice must be followed (self discipline)

  4. This graphs points out to me the discrepancy between anecdotes and data. I’ve spent my entire career in the high tech world on the left coast. I’ve worked in small companies, and there whites are a majority by Asian is a close second. I’ve worked at a couple mega corporations, and there Asian is the majority among the technical workers (when you count East Indians in too). When I was growing up, we had many refuges fleeing SE Asia and moving into my neighborhood. The parents worked their fannies off and put their kids through college. Doctor, lawyer or engineer was the expected career path for their kids, and many did. Based on my anecdotes, I would have expected Asian to beat white.

  5. Just shows how Damore was right. The general idea that we should treat all people fairly regardless of race or gender has fallen down the slippery slope to the religious commandment that everyone should sacrifice themselves on the altar of diversity.

  6. The story ran as the front page lead in the New York Times more than a week ago

    I realized a problem with your timeline when I hit this sentence:
    Hillary Rodham Clinton, who is seeking the Democratic Party nomination…

    The byline is Aug 15, 2015. It’s a week and two years ago. That doesn’t change the relevance of the story Jack, because this is an ongoing problem.

  7. Then there’s the other problem: As my cousin’s economics professor asked a long time ago, “If you took all the wealth in the world (or country) and evenly redistributed it among everyone in the world (or country), how long would it be before it was “unevenly distributed” again?

    The continued existence of the bereft black underclass is a seemingly intractable problem that has driven most social scientists (like the woman above) literally insane. Too bad no one listened to Daniel Patrick Moynihan.

    • Which is one of the situations that makes me wonder as follows: If something’s perceived to be a problem but there’s no apparent solution, is it a problem or something altogether different? Like, a human condition?

  8. said, “William A. Darity Jr., a professor of public policy at the Samuel DuBois Cook Center on Social Equity at Duke University, points out that a family headed by a black college graduate has less wealth on average than a family headed by a white high school dropout.”

    I’d like to see the actual data and the collection methods that this assertion is based on. Something is wrong and frankly I don’t think what they are asserting is fact. For instance; are they taking data from white high school drop outs that are working high paying union trade jobs and comparing them to black college graduates that are working at the local grocery store because they graduated with an accounting degree and can’t find a job in their field of study because their grades were barely passing?

    I suspect that there is something terribly flawed with either the conclusions of this part of the study or the methods.

    • As you recognize, you really need to see the data. It could be that black college grads tend to be younger with student loan debt, while white dropouts tend to be older and not accessing credit at all.

    • After some searching, I think I found the source data that this “a black college graduate has less wealth on average than a family headed by a white high school dropout” statement was based on.

      From what I can find; it appears that William A. Darity Jr. didn’t actually do the study himself, it appears that he is regurgitating the conclusion that someone else made based on their own statistical analysis of data obtained from the 2013 Survey of Consumer Finances provided by the Board of Governors of the Federal Reserve System.

      I’ve downloaded what I “think” is the data source and I’ll start wading through it to see if I can figure out how they came up with this conclusion. At first glance, the data is already a statistical analysis; so the analysis that the statement is based on is a statistical analysis of a statistical analysis which isn’t usually very accurate in their conclusions unless the it is an in-you-face kind of conclusion.

      Don’t expect any kind of instant gratification on this, there’s a lot of data and it’s poorly organized for this kind of analysis. Remember; I’m starting with a conclusion as a preconceived notion that “a black college graduate has less wealth on average than a family headed by a white high school dropout” and trying to replicate a conclusion that is based on a statistical analysis of a statistical analysis – does sound like a fun thing to do to you?

      This might be one of those statistical analysis cases where someone came up with a conclusion that simply can’t be proven because the data is so convoluted to reasonably replicate the conclusion; but we, the ignorant public, are supposed to blindly accept the statistical analysis conclusion as fact.

  9. From a great piece on insanity at Penn Law School by Heather McDonald (itself worthy of a post by Jack):

    “What if the progressive analysis of inequality is wrong, however, and a cultural analysis is closest to the truth? If confronting the need to change behavior is punishable “hate speech,” then it is hard to see how the country can resolve its social problems.”

    Read more at: http://www.nationalreview.com/article/450905/bourgeois-values-scandal-tars-law-prof-amy-wax-racism-charge

  10. What would a 2017 graph show? How come the blacks did not do better in that time frame since their savior had pledged they would?

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