Debt: the Good, the Bad and the Ugly

Debt: the Good, the Bad and the Ugly

Candidates are ignoring race’s crucial role in determining who thrives, struggles

Whose streets? Reuters

Last Saturday, presidential hopefuls Bernie Sanders and Martin O’Malley were booed and heckled by liberal activists at a town hall discussion at the Netroots Nation annual conference.

Why would attendees at a gathering of left-leaning progressives commandeer the microphone on stage and shout down Democratic White House contenders? Because Sanders and O’Malley, like the rest of the candidates, have built political platforms that largely ignore race.

The activists at the Netroots meeting were angry because Sanders and O’Malley have failed to respond to racial criminal justice issues, largely ignoring recent high-profile cases – such as the death in police custody of Sandra Bland – and police misconduct involving blacks. Instead, the candidates have focused on economic reforms. But those platforms ignore race too.

Sanders eventually denounced the circumstances surrounding the Sandra Bland arrest and has called for police reforms, and Hillary Clinton now appears to have embraced the Black Lives Matter movement.

Still, none of the White House hopefuls has publicly discussed the role that demographics – particularly race – play in determining who will thrive, and who will struggle, in today’s economy.

Bernie Sanders calls the wealth gap ‘grotesquely’ unfair but keeps his proposed solutions race-neutral. Reuters

Cookie-cutter platforms

Sanders, who is a socialist and the most progressive candidate in the presidential race, has characterized the well-documented wealth and income gaps as “grotesquely” unfair. His proposed solutions, though, are generic and race-neutral ones, like raising the minimum wage or creating jobs in low-income neighborhoods.

Likewise, Hillary Clinton’s recently announced economic policy platform largely steers clear of race and instead focuses on stagnating middle-class wages.

Few Republicans have discussed racial justice issues either, and Jeb Bush has now dismissed the Black Lives Matter movement as merely a “slogan.”

But, about eight months before he launched his presidential campaign, Senator Rand Paul, a libertarian-leaning Republican, wrote an op-ed that discusses the racial disparities in the criminal justice system. The opinion, written in response to the violence in Ferguson, Missouri, after the police shooting death of Michael Brown, argues that “[a]nyone who thinks race does not skew the application of criminal justice in this country is just not paying close enough attention.”

Since announcing his candidacy for president, though, Rand has largely avoided discussing racial criminal justice issues. While his official web page refers to an “unjust criminal justice system,” his campaign has not focused on how the criminal justice system disproportionately harms black Americans.

Likewise, rather than focusing on police misconduct as a cause for the recent riots in Baltimore, he instead suggested that they resulted from a breakdown in family structure, a lack of fathers and the lack of a moral code in society.

While Republican candidate Rick Perry mentioned black poverty in a recent speech, his response was also a race-neutral one that focused on giving people at the bottom of the economic ladder a chance to climb.

For the most part, the candidates’ proposals to address income and wage inequality are generic and nonracial: raise the minimum wage, expand social security, tax the ultra-rich or increase the earned income tax credit. None of the proposals acknowledges that, because of the widening wealth gap, race and ethnicity have now become almost decisive factors in determining whether a family will thrive or struggle financially.

The death of Freddie Gray last May while in police custody help set off a wave of protests. Reuters

Who thrives and who struggles

The authors of a series of essays recently issued by the Federal Reserve Bank of St Louis show that race remains a powerful, if not conclusive, predictor of whether you will be a financial “thriver” or “struggler.”

After analyzing data collected in the Fed’s Survey of Consumer Finances from 1989 to 2013, the authors found that about a quarter of American families are financially thriving, while the other 75% are struggling.

Thriving families are middle-aged, white or Asian college graduates who have above-average incomes and have amassed enormous amounts of wealth. In contrast, strugglers are young, black or Hispanic, are less educated, have little or no wealth and work in low-wage jobs. The essays reveal that income – and particularly wealth – gaps among whites, blacks and Hispanics are staggering.

Average income for blacks and Hispanics is 40% lower than for whites. Even worse, average wealth held by Hispanic and black families is 90% lower. While the presidential candidates’ proposals to increase the minimum wage might help close the income gap, a little more take-home pay would do little to close the staggering wealth gap.

The essays also reveal that wealth patterns for racial groups have changed little over the last 25 years and, except for Asian families, may now be permanent. For example, from 1989 to 2013, white families have consistently held the greatest amount of wealth, followed by Asian, then Hispanic, and finally black families. Although Asian family wealth has steadily increased over the 25-year period because of higher college completion rates for young Asians, financial patterns have remained virtually unchanged for whites, Hispanics and blacks.

Race-neutral solutions won’t address the roots

Increasing college graduate rates for blacks and Latinos or making colleges free (as Sanders has proposed) are race-neutral solutions that could ostensibly close the wealth gap. But, even if more young blacks and Latinos receive college degrees, the wealth gaps won’t go away.

The Fed researchers considered whether education, rather than race, was the main cause for the wealth gap. They found that age and education play only small roles in explaining the gaps. Racial and ethnic differences in financial well-being remain even after accounting for the age and educational attainment of the head of the family.

In the last decade, the US population became more racially and ethnically diverse than it has ever been. If political leaders continue to ignore widening wealth inequality, the gaps may become permanent, and that could be destabilizing both politically and economically. It will be harder to boost the economy in the future if blacks and Latinos are permanently relegated to an economic underclass that has little wealth.

It is not particularly surprising that the presidential hopefuls shy away from saying that race may determine a family’s financial well-being. Though a recent New York Times poll now shows that most Americans think race relations in this country are generally bad, making such a statement in a political climate that purports to be colorblind might quickly end the candidate’s presidential aspirations.

Until politicians are willing to admit that whether you thrive or struggle financially may be influenced by your race, however, the United States will remain racially split into groups of a few haves – and a lot of have-nots.

We produce knowledge-based, ethical journalism. Please donate and help us thrive. Tax deductible.