September 29, 2014

THE MCEVOY MINUTE | Race and Wealth in the United States

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By EMILY MCEVOY

Last week, two graphs circulated around the Internet that depicted different, but related, disturbing trends in the United States’ economy. The first was created by Pavlina Tcherneva, a professor of economics at Bard College, and shows the distribution of average income growth during the various economic expansions since 1949. The second, synthesized from the recently published 2013 Survey of Consumer Finances by Matt Bruenig, a writer for several online blogs including Demos.org, shows the median wealth of whites, blacks and Hispanics across education levels.

Tcherneva’s graph shows that in the last 65 years, income inequality has been increasing with every economic expansion our country has experienced. From the expansion of 1949-1953 (Tcherneva’s first data set) to that of 1975-1979, the bottom 90 percent of the population captured a majority of the income gains, but less of it each time. Then, from 1982-1990, the top 10 percent received 80 percent of the growth in income, and continued to accrue more with each expansion. In Tcherneva’s most recent data set from 2009-2012, the top benefitted from an increase of 116 percent, while the bottom 90 percent experienced negative income gains for the first time.

Since the Great Recession, and the subsequent Occupy movement, the growth of economic inequality has become a widely discussed and prevalent issue. Tcherneva’s graph is one of many that depicts the stark contrast between America’s extremely rich and the rest of the nation. But, as the New York Times’ Paul Krugman notes, most Americans still do not seem to have a firm grasp on how extreme the difference in wealth is between the top 10 percent and the bottom 90 percent — let alone the comparison of the top 0.1 percent to the bottom 90 percent. We seem unable to translate the numbers from the graphs and statistics into an actual understanding of the differences in lifestyle that fall along the economic spectrum.

And yet, the understanding of the role that race plays in determining wealth seems even more limited. Bruenig’s graph attempts to shine a light on this issue — showing how white families have significantly more wealth than blacks and Hispanics at every level of education. In fact, a white adult without a high school diploma makes more money than a black or Hispanic adult with a college degree. In his article, Krugman points out that in 2013 the top 25 hedge fund managers made close to one billion dollars per person; yet, there was not a single African American on the list, something that Krugman did not mention.

Since the Great Recession, many experts have voiced their suggestions on how to improve economic equality in our country, and if the public continues to pressure the government on this issue, eventually they will need to act on some of these ideas, such as increasing the minimum wage, reforming the nation’s education system and providing better access to job training programs. However, more worrisome than the growing gulf between the very rich and everyone else is the seemingly ignored prejudices that perpetuate economic inequality along racial lines. Within the next 30 years, whites will become the minority in this country, and if at that time nearly all money is still held by mainly white families, the distribution of wealth will be so imbalanced that the whole nation will feel its ramifications.

We need to begin breaking down the racial barriers that our country has been creating virtually since its inception. The white population must acknowledge that our society allows for little to no social and economic mobility for non-white groups, and needs to stop blaming them for their lack of wealth and opportunity. Our government can enact legislation that might begin to diminish the inequality that is so ingrained in our society — but none will be effective until the attitude towards wealth and race begins to change as well.

Emily McEvoy is a sophomore in the College of Arts and Sciences. She may be reached at edm87@cornell.edu. The McEvoy Minute runs alternate Tuesdays this semester.

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