White households in Boston have a median net worth of $247,500. African-Americans there have a median net worth of $8. And that isn’t a typo.
Why is there such a huge disparity? Dr. Art Goldsmith, Jackson T. Stephens Professor of Economics at Washington and Lee University, believes “It’s all about preserving privilege. You can discriminate against somebody,” he said, “without hating them. What you want is to maintain the advantages that you have garnered through institutions that have historically been discriminatory.”
When American troops landed in Normandy 75 years ago their goal was to liberate France and end World War II. The soldiers who stormed the beaches and fought side by side were black, brown and white. All were heroes in their own right who should have been treated equally when they returned home, but the reality is they weren’t.”
The GI Bill, which President Franklin D Roosevelt signed into law, provided a range of benefits for returning WWII veterans including low-cost mortgages, low-interest loans and financial support for continuing education.
Buying a home is the most important step most families can take to begin the process of accumulating wealth. So why didn’t more African-American veterans buy homes? It wasn’t that they didn’t want to. It was a matter of the odds being stacked against them. Historian Ira Katznelson argues that “the law was deliberately designed to accommodate Jim Crow.” In an article published by Demos, David Callahan stated that “banks generally wouldn’t make loans for mortgages in Black neighborhoods, and African-Americans were excluded from the suburbs by a combination of deed covenants and informal racism.”
When it came to getting educational loans, African-Americans faced discriminatory entrance policies at southern universities and at that time in our history, 79% of the black population of America lived in southern states. Despite that, the bill expanded the population of African Americans attending college and graduate school, though that was primarily limited to northern states. The sad fact is that both the educational and the economic gap widened after WWII.
These days wealth is increasingly considered to be a more important aspect of economic well-being than income. Dr. William A. Darity Jr., is an economist whose research is focused on what he calls “stratification economics.” “Wealth,” he said, “which represents one’s net worth, has less volatility than income, the stream of wages one earns through work. Besides providing extra financial security during emergencies and economic downturns, wealth can benefit subsequent generations by providing payments for college tuition or assisting with a mortgage down payment.”
Providing loans for home ownership and educational opportunities were the core benefits of the GI bill – benefits that are still more difficult for African-Americans to access than whites. As the 2020 elections approach it behooves all of us to learn enough about the candidates to determine who will work to right those wrongs.
Blessings on your efforts to understand what contributes to inequality and which candidates will work to overturn it.
Judy Osgood