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Employment
If you do not want to be poor, it is logical to believe that you should go to school and get a job. But layered on top of unequal access to high-quality education, Black people and other people of color, on average, are treated differently from whites in the realm of employment, which results in racial inequality in employment rates, levels of income, and consequently, rates of poverty. Just for your information, most poor people are not Black (they are white), and most Black people are not poor; but Black people and other people of color, on average, do not fare as well as whites in the realm of employment in the United States.
During the forty-fifth president’s first State of the Union Address, he mentioned that Black unemployment rates were at the lowest in US history. The Black Congressional Caucus did not applaud, as most audience members did. This could be because they weren’t feeling the president, but it could also be that throughout recent US history, Black unemployment rates have been, and still are, twice those of whites. Our data from the Bureau of Labor Statistics provide evidence of this fact for over five decades, and the economist William Darity notes that the racial gap in the unemployment rate has not improved since the passage of the Civil Rights Act of 1964.51 What’s more, labor-force statistics from the US Census Bureau show that at every level of education, Black unemployment rates are about twice as high as white unemployment rates. Blacks with a college education or even an advanced degree have about the same rate of unemployment as whites without one, revealing that while more education does help to decrease chances of unemployment, the effects differ across racial groups. Blacks with a college education or even an advanced degree fare just about as well as whites with some college but no degree.
Unemployment rate by race, 1972–2018. (Data compiled from the Bureau of Labor Statistics, 2018)
Unemployment by race and education. (Data compiled from the Bureau of Labor Statistics, 2015)
Why does this happen? Because discrimination still occurs in hiring and promotion practices: “[Discrimination] is not the only or even the most important factor shaping contemporary opportunities. Nevertheless, it is important to understand when and how discrimination does play a role in the allocation of resources and opportunities.”52 In an audit study, scholars sent out equivalent résumés with identifiably Black names (e.g., Jamal and Lakisha) and ones that are statistically white (e.g., Brad and Emily); they found that white names triggered 50 percent more callbacks than Black names.53 In a similar study, the sociologist Devah Pager found that white men with a criminal record have about the same chances of getting called back for a job as Black men without a criminal record.54 These differences in callback rates provide evidence of a barrier in employment due to race. Despite the fact that there have been policies put into place to prevent discrimination, these inequities still exist, and there is little recourse one can gain in this environment because proving that an employer intentionally discriminates is an incredibly difficult feat these days.
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Income and Wealth
Income is the money that you bring in from your job. It is typically the case that as people get promoted within an organization, their income also increases. As we see more people of color in management, seated at the table of executive boards, and in administrative positions in institutions of higher education, many of us conclude that nonwhites must be doing better financially. Unfortunately, there is still plenty of wage inequality across racial groups. For instance, Pew Research shows that in 1980, Black men’s median hourly wages accounted for about 83 percent of white men’s hourly wages, and in 2015, Black men’s median hourly wages accounted for about 83 percent of white men’s hourly wages. The income gap between Black and white men has not changed in three and a half decades!55 When you add gender to the mix, researchers show that, with the exception of Asian men, all groups lag behind white men in terms of median hourly earnings.56
Some of this difference comes from the fact that Blacks and Latinxs do not attend college at the same rates as whites, but what happens when we account for these important differences? Researchers from the Economic Policy Institute reveal that in 2015, “relative to the average hourly wages of white men with the same education, experience, metro status, and region of residence, black men make 22.0 percent less, and black women make 34.2 percent less.”57 This gap appears to increase as we move up the education ladder. Similarly, the New York Times’ editorial board explained, “Last year [2016], black college graduates earned about 21 percent less per hour on average than white college graduates; in 1979, the gap was 13 percent. The racial disparity in earnings is even greater for men: Last year, the average hourly earnings of black college-educated men were about 25 percent less than of white college-educated men. The gaps widen up the economic ladder. The top 5 percent of black male earners make about 47 percent less than the top-earning white men.”58 That’s a hard pill to swallow if you’ve been under the impression that education is the great equalizer. The thing is, income is actually a very superficial measure of financial well-being. Income pays your bills, but wealth is what you have left after all of your bills are paid. Examining wealth disparities is important because it reveals how being poor and Black is quite distinct from being poor and white. It also reveals that those high-income Black folks in management may be one or two pay checks from poverty. Even low-income white people have more wealth and more cushion to fall back on in really hard times than do well-paid and well-educated Black people, on average.
Family wealth, by race and education. (Hamilton et al., Umbrellas Don’t Make It Rain, 5)
Median family wealth by race. (Hamilton et al., Umbrellas Don’t Make It Rain, 4)
Currently, the median Black family’s wealth is about $7,113, compared to $117,740 for the median white family. Here’s the rub: it is generally difficult to attain wealth, and it is even more difficult for Black people. Blacks with an advanced degree have about $84,000 in wealth. Whites with the same level of education have about three and a half times that wealth, and whites who do not even have a college degree tend to have about $2,200 more in wealth. Black Americans with a college degree only have about 67 percent of the wealth that whites who never graduated from high school have.
Maybe all those Black people with doctoral degrees should just try to make more money? That doesn’t do the trick. Blacks with high incomes ($93,000+) have lower levels of wealth than do whites making between $57,000 and $93,000. All in all, research shows that “racial wealth differences cannot be explained by education, employment, or income.”59 Experts have calculated that Black households would have to save 100 percent of their income for three years to close the wealth gap!60 And still, it is predicted that in 2053, the median wealth among Blacks will be $0.00.
How does this all work? Much of the wealth people have comes from their homes, but another source is one’s family, especially one’s parents and grandparents: wealth is often intergenerationally passed down.61 Let’s say your grandparents got a loan for a home in one of those Green neighborhoods we discussed earlier, and they passed it down to your parents. Your parents now live in a home with little or no payments, and their home is building equity (a house’s value minus what is owed on it). When you go to college, they can borrow from the equity so that you do not have to take out loans. You’re better off already.
Now let’s imagine that they pass the house to you, but you have a low-paying job. You’re still doing okay because you just have to pay utilities, upkeep, and taxes. Your kids can still go to the “good,” well-resourced schools even though you make little money. This scenario looks much different for a person who is the descendant of people who bought a home