Separationomics: Economic Segregation in 21st Century America

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Status: Finished  |  Genre: Editorial and Opinion  |  House: Booksie Classic
Social commentary about the economic disparities that exist between black and white Americans.

Submitted: March 10, 2014

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Submitted: March 10, 2014

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According to the US Census Bureau, the median annual income of white families was 75% greater than that of black families in 2012. This means that for every $1000 earned by white families, black families only brought home $600 by comparison.  The income gap between black and white Americans is substantial and has remained largely the same since at least the late 1960s -- when the Census Bureau first began collecting income data. In 1972, the median annual income for black families was just under $29,145 (in 2012 dollars), while in 2012 it was estimated at $33,718. Compare this to the median annual income for white families during those same periods, $50,644 (in 2012 dollars) and $57,009 respectively, and a very disparate picture begins to emerge of the relative economic status between the two racial groups. And although neither black nor white families have seen significant increases in median income over the last 40 years, white families have clearly enjoyed substantially greater incomes than those of their black counterparts. Over time, this difference increases exponentially. 

To illustrate this point, imagine two families, one black, one white, who devoted 10 percent of their respective annual incomes into modest investments (6% annual return) from the forty year period between 1972 and 2012  (the average length of most careers). After forty years, the black family would have earned just over $537K, the white family just over $884K. Thus their average wealth gap at retirement would be just over $350K (an amount equal to that of a single-family home (in most states), a couple of brand new cars, student loans, maybe even a summer home, etc.) Further, if we were to add this amount to the difference in overall income during that forty year period, an even starker contrast emerges since the white family will have earned over $900K more than the black family. And when you add this to the difference in investment earnings above (taking into account, of course, the 10% of income devoted to such), the overall income gap widens to a staggering $1.15M!

It should be noted that the term 'median annual income' does not represent the actual income of every family, but rather average overall income for all families in that category. Thus, it does not show the distribution of income, which varies widely between families. As such, it does not address the issue of poverty, for while a certain percentage of families may be at or above the median income level, there are many who fall beneath it -- far beneath. For example, in 2012, 13% of all black families in the U.S. (i.e., 1 out of every 7) had annual incomes equal or less to half the amount of the federal poverty threshold (which, for a family of four was approximately $23,000 that year). This means that, on average, 13% of all black families in America lived on annual incomes $11,500 or less. In contrast, only 4% of white families (1 out of every 25)  lived at or below such income levels. Meanwhile, on the other end of the income spectrum, 75% of white families (3 out of every 4) had incomes that were at least double, or greater than, the federal poverty level (i.e., more than $46,000 per year for a family of four). Less than half than half of all black families managed to achieve such income levels in America in 2012.

Admittedly, statistical data can be hard to analyze as it seems, at times, susceptible to endless interpretations by its user. However, I believe that the analysis above not only represents a fair reading of the data, but coincides with everyday economic realities. It is beyond dispute that black Americans own fewer homes (with far less value, on average), drive fewer and less expensive vehicles, work more menial and lower-paying jobs (and when in positions of employment comparable to their white counterparts, are compensated significantly less on average), and have relatively far more limited access to both personal and commercial forms of credit than do white Americans.

And though my analysis is not intended to be a wholesale indictment of white America, it is a critique of an American society which still, as a whole, continues to deny financial and economic opportunity to most minorities, especially those who are black, reserving the better and the best for the majority. The reasons for this are both historical and varied and would require a much more in-depth analysis to explicate here. Indeed, countless books have been written on the subject. Yet, as each new generation becomes part of America's workforce, the prospects for young minority men and women do not appear to be getting any better. One of the contributing factors to this is the disparity in the quality of education between whites and other minorities. But that is a subject for another discussion.


© Copyright 2019 Colin David. All rights reserved.

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