Why is there a wealth gap between the races? 1

By Tom Quiner

I got into a Facebook exchange on the subject of wealth gaps.

A friend posted an article with a link to a leftwing study on the wealth gap between blacks and whites: “The average Black family would need 228 years to build the wealth of a white family today.”

The article blames the wealth gap on “400 years of slavery, segregation, and institutionalized discrimination in labor and housing markets…” and calls for reparations.

Here’s how our exchange went:

QUINER’S DINER: The study misses the root cause of the gap: the break up of the family, caused by misguided Great Society programs that rewarded illegitimacy. Households without fathers are far more likely to experience poverty, and some 7 out of 10 black kids are born into fatherless households. These kids ARE due reparations: from their so-called fathers who abandoned them to the taxpayers.

FRIEND: While I take your point that two parent households have better wealth creation, I think that the author would point out that households with both parents present is not a part of the historical African-American experience, not by choice, but because fathers and mothers were often sold separately. To the extent that there exists an identity as African-American separate and apart from one distinctly West African, there has been very little time for that identity to incorporate traditional two parent households, except by mere luck or the “compassion” of their white “owners.”

Moreover, in the last hundred years, the engine of wealth has been homeownership. FHA practices had a monumental effect on the capability of Black people in the United States to get access to that wealth engine, and they weren’t policies that looked more favorably on single mothers than on married couples. Redlining is more responsible for a wealth gap than any Great Society program. If we accept (and I think there’d be dispute) that the Great Society had deleterious effects on Black wealth creation, it was only at the margins after they were already denied access to homeownership by the FHA.

QD: In the early 1960s, the illegitimacy rate in the black community was 25%. It exploded after welfare policies rewarded out of wedlock births with a welfare check. This data suggests that perverse incentives encouraged by bad public policy has fueled the rise of the out of wedlock birth rate to over 70%. Intact black families have wealth patterns similar to their white counterparts, just as white fatherless homes have similar poverty rates to their black counterparts.

FRIEND: If illegitimacy were as closely and statistically linked with poverty as you suggest, it would not be possible for Black illegitimacy to have risen (as admittedly, it has) while poverty rates among the same population have fallen. (Source: https://abagond.files.wordpress.com/2013/11/poverty.png). If one caused the other, you would expect that a rise in illegitimacy would cause a rise in poverty. That’s not borne out by the statistics.


QD: A couple of reactions: 1. Economic growth has an impact on overall poverty rates, as well as welfare policies that encourage work. For example, poverty rates dipped following Clinton/Gingrich welfare reform in the 90s. 2. You are correct that there may be more than one variable involved in explaining both the illegitimacy rate and poverty rates. The American Community Survey, which uses Census Bureau data, puts the Pearson correlation at .6 between state-level poverty and the percentage of women reporting out-wedlock births, which is significant, but not a stand-alone number.


One comment

  1. GR8 article by Jason Reilly, WSJ, I think it was yesterday, who argued at least in part according to Tom’s argument i.e. that during the time of Jim Crow and much more blatant discrimination, blacks did much better than they are doing now! Sad that all the well intentioned efforts to assist poor/minorities seem to have yielded very few benefits, at least in some fundamental matters.

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