Ta-Nehisi On Reparations

Ta-Nehisi Coates piece on reparations posted last night. It's a long piece and a summary would be difficult. Here, I just want to flesh out his point about racial wealth differences.

Coates doesn't focus too much on the wealth figures involved, but he does write this:

Black families, regardless of income, are significantly less wealthy than white families. The Pew Research Center estimates that white households are worth roughly 20 times as much as black households, and that whereas only 15 percent of whites have zero or negative wealth, more than a third of blacks do. Effectively, the black family in America is working without a safety net. When financial calamity strikes—a medical emergency, divorce, job loss—the fall is precipitous.

These figures refer to Pew Center analysis of SIPP data. I've never done any estimates using SIPP data, but I have done estimates using SCF data. And those estimates show a gap that is not quite that large, but still very large nonetheless.

Here is mean household wealth by race:

Here is the same graph, but this time with black and Hispanic wealth represented as a percentage of white wealth:

If we switch to median wealth, the overall dollar figures change quite a bit, but the percentages don't:

The racial wealth gap persists even when you only compare families within the same income groups:

The graphs above are the most relevant on the question of the racial wealth gap because they account for the fact that racial groups have different population levels, but it can also be useful to get a glimpse of the total wealth picture. When you combine the fact that white families hold such disproportionate amounts of wealth with the fact that white families are the biggest chunk of the population, you wind up with whites holding about 88 percent of the nation's wealth:

A number of researchers have tried to determine the proximate cause of the wealth differences. I won't go into all of them here, but Gittleman and Wolff peg it on inheritance differences as well as income differences.

Although Coates makes a more expansive case, I think this wealth data, combined with our understandings about the dynamics of wealth and intergenerational wealth transfers, make an entirely sufficient case for focusing explicit attention on closing the racial wealth gap. Because of the way wealth works (it builds on itself and transmits itself down family lines), systematically preventing one race from accumulating wealth for hundreds of years, and then not rectifying that, will generally lead to a permanent racial wealth disparity.

Even bringing blacks up to the same income levels as white (another obviously worthwhile task) wont ever close that gap, again because of the way wealth works (see Piketty). If the gap is to ever close, we will have to be intentional about it.