The Blackwell Companion to Sociology (44 page)

176

Melvin L. Oliver and David M. Grant

manner at their assertiveness and refused to hire them. They were forced to leave the village for employment and to work in villages within close walking distance.

But the lower caste women of Pilluseri continued to save.

With their collective savings, the women became long-term, strategic thinkers

about their livelihoods and options. The tank became not just a source of water, but an opportunity to increase the livelihoods, incomes, and assets of the

women. The idea that the women could buy fish and stock the tank was no

less than revolutionary. To do so, they would have to apply to the state govern-

ment for authority to stock the tank with fish. As common property, the water

was available to all; but the fish would be the property of the women were they

to gain the franchise. They could use the fish as food during the off-season and, more importantly, they could sell fishing rights to the upper castes and earn

income.

With the power of collective assets behind them, newly developed social

capital, and the technical expertise of PRADAN, the women set out to accom-

plish this task. Men from their caste laughed at them, the upper caste ridiculed them: ``who do these women think they are,'' they would say, ``they have never

before even been to the regional city, let alone, talked and negotiated with

government officials.'' Through a long and winding process the women did

gain the franchise for stocking the tank. They used their collective savings to

buy more goods. With assets they were able to develop a long-term plan; to

strategize and take advantage of opportunity. More importantly, they also

changed the terms of power, gender, and caste in their community.

Conclusion

As we have seen, poverty is a resilient feature of the human experience.

Tremendous global changes in recent decades promise greater freedom and

access to resources, yet the incidence of poverty has increased. The poor remain most susceptible to the worst aspects of poverty, particularly women and children. And as free market-based societies become the norm, those who are left in

global capitalism's wake become increasingly marginal and superfluous. Old-

fashioned human suffering, including hunger, disease, and death, remains far too common throughout the world today.

As contemporary understandings of poverty recognize its complexity and

multidimensionality, poverty measures and interventions increasingly focus on

access to non-monetary resources, such as water and education. Typical income-

transfer policies, we contend, do little to improve the material conditions of the poor. Instead, strategies that build assets among the poor have the potential to alter the pattern of social relations in which poverty is generated and reproduced. The absence of wealth among African Americans and women in Southern

India is central to not only their impoverishment, but also their inability to

transform their circumstances. We present the asset building programs above

as concrete examples of how such policies can have a lasting and broad-based

impact on the lives of the poor.

The Persistence of Poverty in a Changing World

177

The history of poverty's persistence and the legacy of programmatic failure to

effectively reduce poverty appropriately give one pause when considering inter-

ventions such as asset building. The greatest failure of all, however, would be to fail to use our resources to combat the ravages of impoverishment. Poverty,

wealth, and knowledge are all created by human interaction ± and it is only there that the solution to poverty can be found.

13

Racial Economic Inequality in the

USA

William A. Darity, Jr and Samuel L. Myers, Jr

Racial economic disparity in the United States of America centers on the gap in

outcomes in labor markets and financial outcomes between blacks and whites.

Blacks constitute about 12 percent of the American population and primarily are

descendants of Africans who were enslaved in the USA until Emancipation in

1863. Indeed, we estimate, based upon data from the 1990 decennial census,

that at least 90 percent of the extant black population in the USA has traceable ancestry among the nation's historic slave population.

The vast majority of the American population, approximately 80 percent of

the total, identifies itself racially as white. But the racial category ``white''

obscures substantial variation in economic outcomes among them. For example,

in 1990 the mean per capita income for the US population as a whole was

$14,196, 13 percent of Americans lived below the poverty line, 26 percent of

men aged 25±54 held professional-managerial jobs, and 29 percent of women

aged 25±54 held professional-managerial jobs.

However, the group that identifies itself racially as white and ancestrally as

Russian had a per capita income nearly twice as high as the national mean, a

poverty rate half of the national average, and more than 45 percent of both men

and women in professional-managerial occupations. Other whites with per

capita incomes significantly above the national mean were those of Austrian,

Rumanian, Lithuanian, Hungarian, and Scottish ancestry. Indeed, virtually all

the 35 racially self-declared white ethnic groups had an economic profile at or

above the national mean in the 1990 census (Darity et al., 1996, pp. 413±15).

The rapidly growing Latino population in the USA, regardless of ancestry or

phenotype, tends to disidentify with blackness and to more strongly identify

with whiteness. For example, among persons reporting Cuban ancestry in the

1990 census, less than 3 percent indicated their race as black. The Cuban

respondents in that census year included the Mariel boatlift refugees who

Racial Economic Inequality in the USA

179

disproportionately ascriptively resemble persons who customarily would be

socially identified as black in the USA.

Furthermore, fewer than 1 percent of Mexican ancestry respondents reported

their race as black, as did fewer than 4 percent of Puerto Rican ancestry

respondents (Darity et al., 1999). Angelo FalcoÂn's (1995) study utilizing data

from the Latino National Political Survey reveals that over 30 percent of Puerto Ricans in the sample that interviewers classified as ``dark'' or ``very dark'' and over 50 percent of those that interviewers classified as ``medium'' or brown-skinned classified themselves as white. Indeed, the Latino preference for a white racial identity over a black racial identity is so strong that anthropologists

Warren and Twine (1997) doubt that there ever will be a self-identified non-

white majority in the USA, despite popular demographic forecasts that ``minor-

ities will be a majority'' in, say, the year 2030.

Racial inequality is understood as a problem of ``minorities'' in the USA. This

is by no means universally the case. In Malaysia, the native Malays (the Bumi-

putera) still lag behind both the ethnic Chinese and East Indians and still suffer significant discriminatory losses in earnings after more than 20 years of affirmative action on their own behalf (Gallup, 1997). Thè`Bumi'' are the numerical

and political majority in Malaysia. Of course, South Africa represents another

important case where a majority racial group holds markedly inferior economic

status. In the last census taken under apartheid, blacks, who constituted 60

percent of South Africa's population, had a mean income only 16 percent of

that of whites there and only 40 percent of all South Africans, as well as

substantial discriminatory losses in earnings (Treiman et al., 1996).

In the US context the minority that is black holds center stage as the central

group for whom the condition of racial disadvantage is rooted historically. This is hardly to dismiss the destruction of native American civilizations with west-ward expansion of the USA, but the exterminative thrust of the expansion

sharply reduced the native presence in the US population. An interesting phe-

nomenon evident between the 1980 and 1990 decennial censuses is growth in the

numbers of whites who report themselves as of American Indian ancestry,

growth inconsistent with natural increase. Hence, more whites are finding it

desirable to identify with or declare native American ancestry. Other ethnic/

racial groups of Asian origin, particularly those of Japanese, Chinese, Korean,

and East Indian descent, actually have a superior economic profile to most

Americans, whether black or white.

Economic Disparities: Causes and Trends

The largest economic gap between blacks and whites in the USA involves the

wealth differential. Economists have tended to focus on labor market outcomes,

particularly on income generated from employment and on occupational status,

but the deepest gulf is in holdings of property, such as real estate, including home ownership, and of financial assets, such as stocks and bonds. One sample, the

Survey of Income and Program Participation (SIPP), demonstrated that in 1988

180

W. A. Darity, Jr and S. L. Myers, Jr

the mean black family had $31,678 in wealth, whereas the mean white family

had $127,237 in wealth. The black±white ratio was a mere 0.25. Furthermore,

the median level of wealth for black families in the sample was zero. Moreover,

the SIPP mean ratio actually was the highest among four major surveys reporting

on wealth (Chiteji and Stafford, 1999).

These huge racial differences in wealth are not attributable to racial differ-

ences in propensities to save. The best available evidence indicates that, after controlling for income, there is no significant difference in black and white

saving rates. In fact, the black rate might be slightly higher than the white rate at each income level. The key to the racial wealth gap is the gulf in capital

resources acquired via inheritance, which is now the major source of wealth

(Blau and Graham, 1990). White households are much more likely to receive

inheritances than black households (Menchik and Jianakopolos, 1997).

What are the effects of the racial wealth gap? Wealth provides access to

greater security of well-being when income fluctuates, access to superior schooling and academic enrichment opportunities, and access to resources that facil-

itate the pursuit of the self-employment option. A lack of wealth can produce

cumulative disadvantages across generations. A large wealth gap can be a

pernicious factor in sustaining racial inequality. Indeed, the racial wealth differential is a paramount factor in explaining racial differences in patterns of self-employment rather than black ``cultural'' aversion to self-employment (Bates,

1997). When we turn from wealth to income, we find very different pictures if

we consider per capita income versus considerations about labor market earn-

ings or hourly wages. The persistence of the black±white gap is dramatically

evidenced by the fact that Vedder et al. (1990, p. 130) estimated that the black±

white per capita income ratio was 0.59 in 1880, identical with the estimate

produced from the 1990 US census!

There also has been a pattern of worsening of the relative income position of

black families in the USA. The black±white disparity in family incomes has

widened over recent decades. As figure 13.1 graphically demonstrates, the family income ratio, hovering at 0.61 and 0.62 in 1989 and 1990, was at or below the

ratio attained in every single year from 1967 to 1980. The ratio rose from 0.625

in 1967 to almost 0.65 in 1970. It declined during the early 1970s, falling to a little more than 0.62 in 1973. It rebounded in the mid-1970s, reaching about

0.645 in 1976. However, by the early 1980s that changed. The sharp nose-dive in

the ratio of black±white family incomes reached a decades-low point during the

1982 recession, when black families received less than 60.5 cents in income for

every dollar that white families received. Even though the ratio rose after the

recession, black families have never fully recovered their relative position. They still had incomes in 1990 that were below the relative position in 1970. There is no marked evidence of a change in relative family incomes throughout the 1990s.

The most obvious explanation for the relative decline in black family incomes

in the 1980s is the increase in the share of black families headed by females.

However, the evidence is far from clear that the major causal factor contributing to the widening earnings gap between black and white family heads is the

increased presence of female family heads among blacks. Even among

Racial Economic Inequality in the USA

181

Figure 13.1 Black±white family income ratio, 1967±1990.

Source: US Bureau of the Census, Money Income of Households, Families and Persons in the United States, 1996. Current Population Reports, Series P60±184. Washington DC, US

Government Printing Office, 1997.

male-headed families, there are substantial differences in earnings that are linked to age and education. The kernel of truth rests in the observation from figure

13.2, displaying the earnings gaps between young black and white family heads

between 1970 and 1988. This figure maps the ratio of annual wage and salary

incomes of high school drop-outs to the annual wage and salary incomes of

college graduates among 16- to 24-year olds. The figure shows the ratios among