Posted: August 10th, 2011 by Gadget42
A recent Pew Research Center report using US Census Bureau data painted a grim picture of economic decline among blacks (and Hispanics) during the current downturn (see here). In 2005, for example, the average white household net worth was $135,000; for blacks it was $12,124 (net worth reflects home ownership, stocks, cars, retirement accounts and the like minus debt). But, while the asset figure for white households dropped to $113,149 in 2009, for blacks it fell by more than half to $5,677. In fact, 35% of black households had zero or negative assets (the figure for whites was 15%). The median net worth of single black women is $5.00 while at the other end of the continuum, married or cohabiting white women have a net worth of $167,500 (seehere)! Blacks are also disproportionally leaving the workforce altogether while unemployment increases across the board (see here). Even more surprising, a report by the National Urban League Policy Institute found that unemployment for blacks with a degree from a four year college tripledfrom 1992 and was more than double the unemployment rate for similarly educated whites (also seehere).
Much of this bad news can be explained by the collapse of the housing market, but unexplained is why blacks still lag so far, far behind whites, and this gap seems to be increasing, despite a half-century of fervent government effort to narrow it. After all, today is not the 1950s when African-Americans faced formidable obstacles such as under-funded segregated schools, blatant discrimination in employment and college admissions, unequal access to bank loans (“redlining”), and multiple other artificial impediments to achieving the American dream.
This is a complicated question, but let me suggest one possibility: excessively relying on political solutions to achieve affluence. In a nutshell, moving up the economic ladder via politics may offer some short-term benefits, but enduring gains are fragile and are easily lost. Easy come, easy go, so to speak.
Consider the traditional pathway to wealth followed by almost every ethnic/racial group — the multi-generational economic relay race. It typically begins with a hard-working immigrant who saves and scrimps to provide a better life for his or her children. In turn, these children get a better education, advance up the ladder, and their children — the grandchildren — frequently enter the middle class. Political activism almost always follows wealth-creation; it does not itself generate wealth.
Centuries-long slavery obviously disrupted this classic pathway. Still, enormous post-slavery progress did occur, but not via politics. Specifically, from the early 20th century onward, millions of Southern blacks migrated northward and with access to better schools and jobs (and freed from Jim Crow laws and blatant discrimination), most prospered (see here). To be sure, African-American migrants encountered formidable obstacles to a better life, but incomes still rose. As before, each generation typically outdid their parents.
In the mid-1960s this hard work-driven, trans-generational relay race model of advancement succumbed to political solutions. Ironically, this shift was not black-instigated but largely pushed by well-intentioned white liberals though civil rights groups quickly embraced it. The mechanism for this transformation was Lyndon Johnson’s Great Society. In an instant the self-help message preached byBooker T. Washington and Marcus Garvey became anathema. Now, government, especially Washington, would jump-start black wealth creation, and do so within a single generation.
The allure of a quick-fix political solution was overpowering. It was clearly less demanding than taking arduous entry-level jobs, forgoing consumption, saving money, studying hard, and often accepting glacial progress across generations. Compare holding a massive one-day rally to demand “good jobs” versus gradually upgrading one’s skills and patiently waiting for a promotion. Indeed, compared to any alternative path to prosperity, politics seems the quickest and least demanding, other than winning the Power Ball lottery.