Does the Wealth Gap factor into ethnic inequality?

By: Liam Siegal                          5/17/18

The Wealth Gap is becoming a controversial issue, especially, when it is tied to race. Our country was established on the roots of freedom and equality for all which is kind of funny because in the period before the abolition of slavery, we were a country that had millions of slaves working for plantation owners. Even George Washington had over 100 slaves by the time he passed away. So let me tell you, your race had already decided your opportunities in life by the start of the colonies. When we created the constitution, we intended to make everyone free and equal. Well, yes the government did that for us and fought a revolution to make us free, but did this actually do much in terms of the segregation between the races within the financial district. No, because from the start landowners found loopholes to lure people back into slavery basically by getting them into debt. Now I know you may be asking why I’m talking about the 1700’s, but it’s what set the stage for how the U.S developed economically between the classes and the races. From the standpoint of the 1700s, we see that government officials, like George Washington, doing the opposite for what he was fighting for and rich landowners trying to keep people working on their lands cheaply so they could make more money.

So we can see what’s wrong with this picture clearly right? Wrong. Tell me how many African Americans were there compared to whites. Pretty small. So today I intend to help change your point of view of how we actually see the wealth gap affecting our country as a whole. There are many races in the U.S, but I will mainly be focusing on Whites versus African Americans due to the research I have done, a lot of the other ethnic groups are in the same boat as African Americans.

As I talked about in the introduction, unequal rights and treatment was already happening even after slavery. A stage that wouldn’t change for a long time and without major resistance. African Americans  were always and still are a minority in the country who don’t have equal treatment compared to whites. Even with their expanding populations, which is known as the “Browning of America” and which has helped the minority populations push for major improvements in their lives, they still faces new growing and major challenges. To this day, we see throughout our country many segregated communities which are economically split. For example if we look at Westchester, Bronxville which is considered a village, it has the fifth highest average income per household compared to all the cities, towns, and villages in the county. However, Mount Vernon, which is considered a city, has the lowest average income per household. So I looked at diversity percentages based on the 2012 census and Bronxville had a white population of 90% while Mount Vernon had a white population of 19.8%. This was important because when you then look at the jobs that the people have, you see why the neighborhoods are so diverse or not diverse. For Bronxville, a lot of people work at Wall Street (NYC) or own businesses, while in Mount Vernon most of the people are in low job positions that don’t tend to pay much, for example, mechanics and sale workers. This means that money is keeping communities segregated and helping to contribute to continuing the segregation, for example, some kids aren’t getting as good an education as compared to others. This is because a community which has a higher average income will be more expensive, but can provide better public services.  This, therefore, ensures that segregation continues, since if you can’t afford the community, you can’t live there.

The segregated communities create a barrier that limit African American opportunities around the country. According to a study done by Brandeis University of Institute on Assets and Social Policy done in 2009 that the average white family earns $65,587 a year compared to $28,500 a year for an African American family. As a result of this study, the Federal government looked into it and showed that most African Americans don’t benefit from inheritance. This is because an average white family passes down their inheritance to their kids which gives them a head start compared to African American kids who have nothing and don’t tend to inherit much due to the fact that most of their families are in debt, and this gives whites more opportunities. For example African Americans can’t build equity as fast as whites since they have less to start with. Also since whites don’t move into African American communities as much, those houses don’t tend to increase in value as they do in white neighborhoods due to the lack of demand for houses which means their values doesn’t change and the owners can’t make profits on them as easily. This leads to a decline of house ownership by African Americans.  

The next factor is education. Many African American can’t get their students (kids) as good an education as their white neighborhoods due to the lower income of the general population. This means they are less likely to get good jobs, and this plays back to how the stage is already set up for them to be stuck in this cycle of low income jobs and poverty. And, even if they manage to get the same education and as a white person and get a really good job, they still get paid less. African Americans also have double the unemployment rates compared to whites of the overall population percent of their race.  

Finally to make the problem even worse, the Great depression cause the wealth gap between the races to grow even more since those who didn’t have decent savings lost everything and enforcing the already bad economic situation. Also, when the economy is good, upper level employees will make a lot more than the regular employees which is basically showing that the new revenue will trickle down, but not equally. This will just result in the rich getting richer and the poor and middle class being disadvantaged. Another way we know a company’s revenue earnings isn’t trickling down enough is when our government interferes with businesses and raises the minimum wage for employees. Why? To help increase the pay scale to what is known as the minimum wage, the federal government tried to raise the wage that was previously based on the economy of the late 1900s.  This shows that, even though the economy may be growing, income isn’t improving. And funny enough, many government employees were paid minimum wage and still are, which makes us question which side are they rooting for. In general we have learned that the segregated communities, inheritance, family income, and education are all entangled in a messy web which  traps certain people or ethnic groups in their social standing in society leaving less and less wiggle room for the families stuck in this cycle to get out. This has gotten so bad that our government is trying to increase minimum pay.

All the information you may hear about race segregation may be true in this country, which is why we see a big difference between whites and other races pay. But lets look at an even bigger picture first, the population breakdown by race. The majority of people are white, 79.96% compared to African Americans which make up 12.85% and Asians which composes 4.43%. Hispanics who make up(are a harder group to distinguish due to them since they may be any race, but under the US Census Bureau consider) 15.1% of the population (Hispanics only by where their origins were.) So when we talk about a bigger percent of other races being in poverty, this is true, but due to the white population being the biggest, overall, we have more whites in poverty than all of the other races. About 12% of whites are in poverty(about 33,583,000), 25% of African Americans (about 11,695,500), and 23% of Hispanics (about 12,155,500) in total equaling to about 16% in poverty in the United States in 2010. As we can see from these results, overall you can’t help but notice that there is more whites in poverty than African Americans and Hispanics which makes some ask how does race have anything to do with the wealth gap, since anyone can be in poverty or making a low income. Another argument you can raise is how the economy grows and collapses. When it grows everyone is impacted because if demand soars, everyone working gets paid better which means more saving that month. When the growth falls it will make everyone poorer. You may still ask: Why the rich are still making more? Thats correct except that when a business losses clients or the economy goes into a recession, the owners can lose millions of dollars.

This is a very complicated topic because you need to look at a full spectrum of information and details. I originally believed that majority of the people in poverty was African American because of many articles and reports that I saw. Now I believe there is an ethnic prejudice to a certain point in our society. Because of how we started as a country, it made it a lot harder for all other races to get fairer treatment in our society. The first thing I believe we need to do is find a way to balance out education across the country to help give everyone a fairer playing field. Secondly wages. There are some reports stating that depending on your race, you may earn less. This is something we need to abolish. If you hire anyone, no matter their race, they should get the same pay as everyone else in that position. And, finally, as our government has already started to do, we should increase the minimum wage to help families have the needed income to cover all their costs and not live in poverty. But at the rate this process is moving, it will take a long time before we see, if we see, any economic equality between the different races.

Introduction Sources:

1)"Slavery." George Washington's Mount Vernon. N.p., n.d. Web. 17 May 2015. <http://www.mountvernon.org/george-washington/slavery/>

2)http://planning.westchestergov.com/images/stories/Census/medianincomeacs05-09.pdf

3)http://www.brookings.edu/~/media/research/files/papers/2010/3/china%20middle%20class%20kharas/03_china_middle_class_kharas.pdf

4)Perez, Anthony Daniel, and Charles Hirschman. "The Changing Racial and Ethnic Composition of the US Population: Emerging American Identities."Population and Development Review. U.S. National Library of Medicine, n.d. Web. 17 May 2015. <http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2882688/>.

Pro Wealth Gap

1)Fletcher, Michael. “Study looks at root of Wealth Gap in U.S.” The Washington PostFeb 27 2013.ProQuest. Web. 4 May 2015

2)Collins, Chuck. “The Wealth Gap Widens.” Dollars and Sense Sep 1999: 12-3. ProQuest. Web. 4 May 2015.

3)KOCHHAR, RAKESH. "Wealth Inequality Has Widened along Racial, Ethnic Lines since End of Great Recession." Pew Research Center RSS. N.p., 12 Dec. 2014. Web. 17 May 2015. <http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealth-gaps-great-recession/>

4)CALLAHAN, David. "The Single Best Argument Against Inequality." The American Prospect. N.p., 18 Nov. 2013. Web. 17 May 2015. <http://prospect.org/article/single-best-argument-against-inequality>.

5)https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf

Against Wealth Gap:

1)Infoplease. Infoplease, n.d. Web. 17 May 2015. <http://www.infoplease.com/ipa/A0104552.html>.

2)Central Intelligence Agency. Central Intelligence Agency, 2007. Web. 17 May 2015. <https://www.cia.gov/library/publications/the-world-factbook/fields/2075.html>.

3)"National Poverty Center | University of Michigan." RSS. N.p., n.d. Web. 17 May 2015. <http://www.npc.umich.edu/poverty/#3>.