Read The Blackwell Companion to Sociology Online
Authors: Judith R Blau
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