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Six Cents to the Dollar: Racial Inequality 60 Years After Brown

Twenty-four cents. That’s what black children in Clarendon, South Carolina were worth per every dollar spent on white children’s education. That's why South Carolina was one of the five states challenged in the famous 1954 Brown v. Board of Education case.

Sunday marks the 60th anniversary of the Brown decision. Not only is Brown historic on its own terms, but examining its history sheds light on legal and historical change in inequality. For nearly ten years now, I've been teaching and lecturing to students, other scholars, and the general public about the history and background of financial deregulation. One of the most helpful analogies I've been able to come up with is the story about the road to and impact of Brown. In both instances, it took a series of laws—one interpreted by SCOTUS while the other made by Congress—to bring the nation to the precipice of significant social change.

Both the cases of segregation and the wealth gap involved not one major ruling or law, but multiple, gradual legal decisions that set the stage for major historic change. Polls among academics and legal experts consistently rank Brown as one of the two most famous cases—along with Roe in 1973—since WWII. In Brown, the Supreme Court of the United States ruled that de jure racial segregation in public education was a violation of the equal protection clause of the 14th Amendment. While this case did not formally overturn the infamous separate-but-equal doctrine established by Plessy, which had made segregation legally acceptable, the Brown decision had a cascading effect on race relations and is widely regarded as the opening salvo of the Civil Rights Movement.

While Brown garners much of the fanfare on educational segregation, far less known are the rulings that laid the legal groundwork for it, known as the step cases (1938-1950).[1] Under three separate chief justices, including southerner Fred Vinson, SCOTUS had already begun to erode Plessy with Gaines (1938) followed by Sipuel (1948), McLaurin (1950) and Painter (1950).[2] Thanks to these step cases, the court’s opinion outlawing de juris school segregation in 1954 not only seemed possible, but legal experts and the press pretty much anticipated it. As one University of Michigan legal scholar wrote, on the eve of the Brown ruling, the step cases signaled the “death knell” for legally imposed racial segregation—even as SCOTUS took pains to avoid a reconsideration of Plessy’s separate-but-equal doctrine.[3]

Second, it’s also important to remember that just as Brown was the result of gradual changes in law, it unfortunately led to only slow and gradual changes as well. While border states desegregated soon after the decision, the vast majority of southern school districts did not. In fact, it would be decades later before the practical impact of Brown would be felt and experienced in southern primary and secondary schools—especially in the Deep South. Of the thousands of school districts in the Jim Crow South, less than twenty had desegregated by 1960. There, desegregation of public education didn’t substantively begin until at least a decade or more after Brown.

A similar story can be told about the financial deregulation that led to the rise of subprime mortgages in the 1980s. Like school desegregation, the financial deregulation that gave rise to subprime did not happen overnight. Nor did the step congressional acts, which led to the pivotal and landmark deregulatory act named Gramm Leach Bliley (GLB) in 2000, instantly trigger massive subprime lending and its attendant abuses. That said, the legal apparatus that was erected by both step court cases to Brown as well as step legislation to GLB were sine qua non for both desegregation and subprime.

For desegregation, the historic step cases that led to Brown started with Gaines, Sweatt, Sipuel. For the subprime takeover, the slow march to deregulation started a full generation before GLB, with the Depository Institutions Deregulation and Monetary Control Act in 1980, Garn St. Germain of 1982, and the Tax Reform Act of 1986. Each chipped away at an existing edifice of law. Like the end of segregation, deregulation was a long time coming.

But that’s effectively where the analogy between desegregation and deregulation ends. For while the step cases to Brown chipped away the edifice of inequality, the deregulation laws of the 1980s did much the opposite: They facilitated inequality by eroding equity and consumer protections for African Americans, Latinos, Asian Americans, and a growing number of working and middle-class Americans regardless of race. Yet, the financial impact experienced by American consumers because of these deregulatory laws—laws that nationalized toxic financial mortgage products like prepayment penalties, balloon payments, and ARMs—would not be felt until many years later.

Let me end the way I began, with a simple number. Remember, twenty-four cents was what a black child in Clarendon County, SC, was worth compared to every dollar spent on a white South Carolinian child in the early 1950s. Statistics like these were frequently cited to show that Jim Crow was separate and fundamentally unequal. Yet today, in the absence of any substantive economic recovery within Black America following the mortgage meltdown, the typical black household in the US has a net worth of only six cents to the dollar of the average white household. Hopefully, this might spur and shame the nation to action—as it once did in the 1950s, when, like now, black children were only valued a fraction the amount of white children and suffered a serious deficit of opportunity as a result.

Haley Swenson assisted with this post.


[1] Steps: Gaines (1937), Sipuel (1948), McLaurin and Sweatt (1950)

[2] Howard, John R. 1999. The Shifting Wind: The Supreme Court and Civil Rights from Reconstruction to Brown.

[3] From a pre-Brown commentator: Paul G. Kauper (1954).