SOCIAL NORMS, FATHERHOOD & EDUCATION ARE KEYS TO CLOSING RACIAL WEALTH GAP

NOT MORE DEMOCRATIC GIVEAWAYS …

All Democratic contenders for president in 2020 are using stratification economics to address the racial wealth gap that exists between black and white households in America.

They’re taking their lead from liberal economists, like Darrick Hamilton and William Darity Jr., who claim that only drastic government intervention will remedy the wealth disparity allegedly created by slavery, 20th century policies and structural racism. Their new government proposals consist of things like baby bonds, federal job guarantees and reparations that will cost taxpayers tens of trillions of dollars.

In our opinion, these far-left-wing economists and politicians are trying to avoid responsibility for past Democratic governance failures by pivoting to new programs they hope will maintain their control over the loyal African-American vote, regardless of whether or not the new programs are fair and effective. Democrat politicians will say, promise and do anything to retain power.

For starters, we refute the existence of a structural racism that helps whites and marginalizes blacks. If it existed, then how does one explain the successful professional careers and enormous economic achievements exemplified by countless African-Americans under the web-linked headings below:

ONE U.S. PRESIDENT

FIVE BILLIONAIRES

TEN U.S. SENATORS

ONE HUNDRED FIFTY FOUR U.S. CONGRESSIONAL REPRESENTATIVES

TWO HUNDRED ACADEMY AWARD WINNERS

75% OF NBA PLAYERS (2017 avg annual salary: $7.1m)

70% OF NFL PLAYERS (2017 avg annual salary: $2.7m)

52,668 PHYSICIANS & SURGEONS (2017 avg annual salary: $233k)

67,600 LAWYERS (5% x ABA national total of 1,352,027)

TWO MILLION BLACK OWNED BUSINESSES

Obviously, structural racism doesn’t exist in this country for all African-Americans, especially not for those possessing special skills and talents. They can succeed as well as or better than their white countrymen. The real question is: What explains the widening wealth gap between the vast majority of average black and white Americans? And how do we fix it?

To better understand the factors contributing to the wealth gap, we turned to a 2013 study performed by the Institute on Assets and Social Policy (IASP) entitled: The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide. IASP studied households with positive wealth growth during a 25-year period (1984-2009). As shown in the figure below, they found five reasons that accounted for 66 percent of the racial wealth gap:

1. The number of years of homeownership accounted for 27 percent of the difference in relative wealth growth, the largest portion of the growing wealth gap. (White families buy homes and start acquiring equity an average eight years earlier than black families, and the homeownership rate by white families is 28.4 percent higher than the homeownership rate for black families.)
2. The second largest share of the increase, accounting for 20 percent, is average family household income.
3. Unemployment, the only significant factor that depleted wealth since it forced families to draw upon their nest eggs, explains an additional 9 percent of the growing racial wealth gap.
4. College education correlated strongly with larger wealth portfolios, contributing 5 percent of the proportional increase in the racial wealth gap.
5. Inheritance and financial support from family combined for another 5 percent of the increasing gap. How much wealth a family started out with in 1984 also predicted a portion (3 percent) of family wealth 25 years later.

Taking this important and revealing study into consideration, as well as other social studies we have performed, we believe there is a three-part recipe for success that African-Americans can follow to lift themselves up without government handouts:

1 – FOLLOW SOCIAL NORMS

2 – COMMITMENT TO FATHERHOOD

3 – PRIORITIZE EDUCATION

We will now highlight the significant difference in how this recipe for success is currently being exercised between white and black families.

FOLLOW SOCIAL NORMS

In a 2009 book entitled Creating an Opportunity Society, authors Haskins and Sawhill analyzed income data from 2007 and broke down households based on whether the head of household followed these social norms:

• They graduated high school.
• They work full-time.
• They waited until they were married and at least 21 to have a child.

They found that only 2 percent of persons in families that followed all three norms were poor, whereas 76% of persons in families that followed none were poor, and 73.8% of those who followed all three were at least middle-class:

GRADUATING HIGH SCHOOL

In 2016, the percentage of African-American males who had not completed high school was twice as high as white males.

WORKING FULL-TIME

In 2016, only 39 percent of African-American males ages 25-34 having less than a high-school education were working full-time versus 58 percent of white males.

ILLEGITIMACY

As reported in a May 2017 Washington Examiner article, “The National Center for Health Statistics found that 77.3% of native African-American births are to unmarried women, compared to 30% for whites.

COMMITMENT TO FATHERHOOD

This is another social norm that has a tremendously positive impact on the ultimate emotional, educational and economic outcomes for African-American children. In 2016, 73 percent of white children under age 18 lived in their home with married parents, compared to only 33 percent of black children. And only 17% of white children lived in their home with just the female parent (no male parent present), compared to 56% of black children. Absent black fathers, and the resulting emotional and financial strain on the single-female parent, inhibit development of their children into healthy and wealthy contributors to society.

PRIORITIZE EDUCATION

Education must be the top priority in addressing the racial wealth gap. Why? Because it leads to lower unemployment and higher sustained income, which leads to higher home ownership in less segregated and more price stable real estate locations, which leads to greater wealth appreciation, which leads to more financial support for the next generation, etc. etc. etc.

To understand why African-American communities must place a higher priority on education, one must first recognize the stark differences in educational attainment between white and black students (all data courtesy of the U.S. Department of Education). It is also worth noting the significant correlation between higher Asian versus white educational attainment and higher Asian versus white incomes.

Black 12th-grade students have historically performed worse than all other nationalities in both reading and math scores.

One of the major contributors to lagging black test scores may be the substantial disparity between the percentage of white and black students attending private elementary and secondary schools … which is why Democratic efforts to limit school choice by capping charter schools and blocking school vouchers is so harmful to black student progress.

Black high school students earn half as many AP course credits in math and science as whites, and only one third as many as Asians, leading to non-STEM (science, technology, engineering, and mathematics) college degrees, which ultimately leads to non-technical jobs with lower incomes.

The percentage of blacks completing less than a high school education is twice as high as the percentage of whites, while 14 percent more whites than blacks attain a bachelor’s or higher degree.

Over a recent six year period (2010-2016), 64 percent of whites graduated from their first-time, full-time bachelor degree program, compared to only 40 percent of blacks.

The more education, the more income generation.

One could point to the income disparity between whites and blacks at every educational attainment level and blame it on structural racism, but then why is there a substantial earnings gap between college educated Asians and whites? Here’s why … A 2015 Georgetown University study, The Economic Value of College Majors, found that majors in the fields of science, technology, engineering and mathematics (STEM), health and business lead to the highest paying jobs, with average annual wages of $37,000 or more at the entry level and $65,000 or more annually over the course of a recipient’s career. Consequently, a person’s education, occupation and position choices have a significant impact on future income. Asians obtain bachelor and higher degrees, especially in STEM fields, in greater percentages than any other race, which is why Asians have the highest median annual earnings. Regrettably, the racial wealth gap between whites and blacks is largely due to the same phenomenon. Blacks obtain STEM degrees and higher paying occupations at the lowest rate among all ethnicities.

We believe the government also has an important role to play in eliminating the racial wealth gap. It must … improve our K-12 public schools and expand school choice; curb the runaway cost of college education by requiring university accountability; increase Pell Grants for low income students; allow student debt refinancing (like mortgages); work collaboratively with industry to provide training for tomorrow’s jobs; grow the economy, maximize minority employment, and reduce income taxes; ensure a level playing field in the job market by eliminating all forms of hiring and wage discrimination; and employ tax incentives to foster two-parent families and minority home ownership.