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In 1968, the Kerner Commission, a civil rights advisory board created by President Lyndon Johnson, warned that America was rapidly becoming "two nations," "black vs. white," "separate and unequal." The Kerner Commission Report was published only a few years after legal racial segregation had been outlawed. The "white" and "colored" signs indicating segregation in hotels, restaurants, and water fountains had disappeared. Yet despite these meaningful reforms, the deep patterns of structural racism were so profound and the economic chasm between African Americans and whites was so pervasive, that the Kerner Commission feared it might become insurmountable.
This January 2003, there was new evidence that the Kerner Commission's dire warnings have become reality. A study just released by the Federal Reserve System illustrates beyond any doubt that black Americans and many other racialized minorities are rapidly losing ground economically. The median income for all families within the U.S. was $39,900 in 2001; African-American household median income is only about 60 percent of the typical white family's annual income.
The important economic disparities, however, only show up when we examine net wealth - that is, the total amount of a household's checking and savings accounts, retirement accounts, stocks, bonds, homes and other real estate, minus all outstanding debts. The median net wealth of all U.S. families in 2001 was $86,100. This figure represented a substantial 41 percent increase since 1992, and a 10 percent jump since 1998. Despite the sharp decline in the stock market and the elimination of hundreds of billions of dollars in equities, the average family's net wealth has continued to grow, albeit at a slower pace.
Unfortunately, black families are clearly an exception to the rule. Because when we separate out statistics of net wealth by race, the structural racism within our unequal economic system becomes strikingly clear. Between 1998 and 2001, the median net wealth for white families increased 17 percent, reaching $120,900. By contrast, the median net wealth for racialized minority families is only $17,000. That figure is 4.5 percent less than the minority family median net wealth back in 1998. It represents only 14.1 percent of today's white median net wealth.
Other statistics indicate that the wealthy are becoming richer, and that the poor regardless of race, are sliding into an economic abyss. The net worth for the top 10 percent of all household income, with a median income of $169,600, had a net wealth of $833,600. For families in the bottom income group, which had a median pre-taxed income of $10,700, their median net wealth was a paltry $7,900. About one-third of all African-American households actually has a negative net wealth - in other words, their total accumulated debt is larger than the sum of their wealth.
Why do white middle and upper class households have so much wealth while nearly all black and Latino families have so little? One major reason is that nearly three-fourths of all white families own at least one home. Less than one-half of all black families are homeowners. Rigid patterns of residential segregation make it difficult for many black families to purchase homes in many neighborhoods where housing values are rising rapidly. Racial discrimination also exists in the home mortgage markets. One 1998 study of New York City's banks and savings and loans illustrated that an African American applying for a mortgage who earns above $60,000 annually, actually has a higher rejection rate than a white applicant earning less than $40,000 annually. Federal tax policy also favors whites over blacks, because interest payments for home mortgages are tax deductible, thus the average white taxpayer, who already earns 40 percent more annual income than his or her black counterpart, can also deduct mortgage interest payments, increasing the substantial economic advantage of white over black.
Perhaps the most disturbing statistical information from the Federal Reserve's report is what is described as the rise of an "equity culture." Millions of American households - the vast majority of whom are white, regularly invest in stocks and bonds, and have pension and retirement accounts exceeding one million dollars. About 21 percent of all U.S. households owned individual stocks in 2001. More than half (52 percent) of all U.S. families own stocks directly or indirectly through pension funds and individual retirement accounts.
This provides further evidence that a different approach toward eliminating the brutal pattern of black "equity-inequity" must be tried. "Affirmative action," in the words of political scientist Ron Walters, was only "paycheck equality." It never was designed to provide full employment, or to reduce the wealth gap between African Americans and whites. Moreover, neither the Democrats nor the Republicans in Congress seem inclined to launch a massive new program for economic development and job creation efforts in urban areas.
Economically, black people collectively are in a hole that we will never get out of - and only a massive wealth transfer will solve our economic underdevelopment. Whether it is called "reparations" or something else, the truth is that we need radical surgery to eliminate the unchecked cancer of spiraling economic inequality.
This January 2003, there was new evidence that the Kerner Commission's dire warnings have become reality. A study just released by the Federal Reserve System illustrates beyond any doubt that black Americans and many other racialized minorities are rapidly losing ground economically. The median income for all families within the U.S. was $39,900 in 2001; African-American household median income is only about 60 percent of the typical white family's annual income.
The important economic disparities, however, only show up when we examine net wealth - that is, the total amount of a household's checking and savings accounts, retirement accounts, stocks, bonds, homes and other real estate, minus all outstanding debts. The median net wealth of all U.S. families in 2001 was $86,100. This figure represented a substantial 41 percent increase since 1992, and a 10 percent jump since 1998. Despite the sharp decline in the stock market and the elimination of hundreds of billions of dollars in equities, the average family's net wealth has continued to grow, albeit at a slower pace.
Unfortunately, black families are clearly an exception to the rule. Because when we separate out statistics of net wealth by race, the structural racism within our unequal economic system becomes strikingly clear. Between 1998 and 2001, the median net wealth for white families increased 17 percent, reaching $120,900. By contrast, the median net wealth for racialized minority families is only $17,000. That figure is 4.5 percent less than the minority family median net wealth back in 1998. It represents only 14.1 percent of today's white median net wealth.
Other statistics indicate that the wealthy are becoming richer, and that the poor regardless of race, are sliding into an economic abyss. The net worth for the top 10 percent of all household income, with a median income of $169,600, had a net wealth of $833,600. For families in the bottom income group, which had a median pre-taxed income of $10,700, their median net wealth was a paltry $7,900. About one-third of all African-American households actually has a negative net wealth - in other words, their total accumulated debt is larger than the sum of their wealth.
Why do white middle and upper class households have so much wealth while nearly all black and Latino families have so little? One major reason is that nearly three-fourths of all white families own at least one home. Less than one-half of all black families are homeowners. Rigid patterns of residential segregation make it difficult for many black families to purchase homes in many neighborhoods where housing values are rising rapidly. Racial discrimination also exists in the home mortgage markets. One 1998 study of New York City's banks and savings and loans illustrated that an African American applying for a mortgage who earns above $60,000 annually, actually has a higher rejection rate than a white applicant earning less than $40,000 annually. Federal tax policy also favors whites over blacks, because interest payments for home mortgages are tax deductible, thus the average white taxpayer, who already earns 40 percent more annual income than his or her black counterpart, can also deduct mortgage interest payments, increasing the substantial economic advantage of white over black.
Perhaps the most disturbing statistical information from the Federal Reserve's report is what is described as the rise of an "equity culture." Millions of American households - the vast majority of whom are white, regularly invest in stocks and bonds, and have pension and retirement accounts exceeding one million dollars. About 21 percent of all U.S. households owned individual stocks in 2001. More than half (52 percent) of all U.S. families own stocks directly or indirectly through pension funds and individual retirement accounts.
This provides further evidence that a different approach toward eliminating the brutal pattern of black "equity-inequity" must be tried. "Affirmative action," in the words of political scientist Ron Walters, was only "paycheck equality." It never was designed to provide full employment, or to reduce the wealth gap between African Americans and whites. Moreover, neither the Democrats nor the Republicans in Congress seem inclined to launch a massive new program for economic development and job creation efforts in urban areas.
Economically, black people collectively are in a hole that we will never get out of - and only a massive wealth transfer will solve our economic underdevelopment. Whether it is called "reparations" or something else, the truth is that we need radical surgery to eliminate the unchecked cancer of spiraling economic inequality.