<p>From a review on “The Hidden Costs of Being African American,” by Thomas Shapiro, a Brandeis professor.</p>
<p>"How can disadvantage persist so long after most laws, minds and practices have changed? Thomas M. Shapiro argues in this sober and authoritative book that we should look to disparities of wealth for the answer. Whites are wealthier than African Americans, and whites’ wealth advantage is much bigger than their advantages in either income or education (the point of Shapiro’s earlier study, Black Wealth/White Wealth, co-authored with Melvin Oliver). Whites start out ahead because they inherit more from their parents, and America’s racially segregated housing markets boost whites’ home equities, while depressing those of African-American families. Shapiro, a professor of sociology at Brandeis, takes readers through the implications of these inequities and concludes that African Americans will not gain significant ground in the wealth divide until inheritance and housing policies change.</p>
<p>Wealth is the sum of the important assets a person or family owns – home equity, pension funds, savings accounts and investments. Wealth is better than income because it is durable. People use income to meet daily expenses, whereas wealth accumulates. People who have wealth tap it only to deal with emergencies or to take advantage of opportunities – opportunities that usually build more wealth.</p>
<p>Wealth passes down from generation to generation. The main reason African Americans are currently worse off than whites, according to Shapiro, is that today’s African Americans inherited less wealth from their parents than today’s whites did. It is not hard to see why: The generation of African Americans now passed away accumulated less wealth because discrimination in their day kept most of them poor and denied them opportunities other Americans enjoyed.</p>
<p>The disparity in wealth not only persists, it mushrooms. Without a cushion of inherited wealth, emergencies hit harder, and people who have no nest egg have to let opportunities pass by. Because of the wealth deficit, African Americans find themselves more vulnerable to shocks and less able to capitalize on breaks than whites with the same income. So the next generation will inherit less, too. The wealth gap will not close anytime soon.</p>
<p>Shapiro blends statistical analysis and case studies of selected families in Boston, St. Louis and Los Angeles, showing the relative importance of wealth and the disparities in inheritance by class and race. He also supplies some individual case studies, which give depth and humanity to the numbers.</p>
<p>Wealth begins at home. A home-equity loan can see a family through a spell of unemployment or leverage an investment. Millions of middle-class Americans use tax-deductible home-equity loans to pay for their children’s educations. Others buy rental property.</p>
<p>Because neighborhoods are racially segregated, African Americans’ homes do not grow in value as fast as whites’ homes do. Shapiro calculates that housing segregation costs African Americans tens of thousands of dollars in home equity. Homebuyers look for amenities commonly found in predominantly white neighborhoods. They pay extra for parks, convenient shopping and attractive views. Parents pay huge premiums for what they perceive to be good schools. Few parents can judge schools objectively. Instead, they use easy-to-observe markers, including the race of the students. These preferences raise the costs that first-time homebuyers face when they attempt to buy houses in those mostly white neighborhoods. Economic theory implies that if whites continue to waste money on irrational prejudices like this, market forces will eventually undo the racial disparity in wealth. But the experience of the last 50 years suggests otherwise. Inequality has grown because each new generation has been willing to pay a higher premium for these amenities. The market doesn’t punish discrimination; it rewards it.</p>
<p>Whites fail to see any injustice in these differences. "
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<p>My own experience is that the above is true. I have white friends from similar backgrounds (i.e. they had dads who were professionals), who have inherited lots of money much of which came from the homes that their parents had. </p>
<p>My father was a dentist, but due to restrictive covenants against blacks buying property in the most desireable areas of the Upstate NY area where I grew up in the 1950s, our home was located down the street from the city dump, and my father’s office was located in a very deteriorated neighborhood.</p>
<p>The property didn’t appreciate enough for my parents to do things like give me large financial gifts to buy my first house (by comparison, a grad school classmate’s dad gave him $50 k back in the early 1980s to buy his first house). </p>
<p>I have white friends whose parents even were working class who were able to help my friends by giving them generous financial gifts that helped friends buy houses in places that appreciated very well, pay for private schools for their kids, send their kids to college with no loans, etc.</p>
<p>The GI Bill boosted many whites into middle class, and the benefits have been passed on to their kids. However, the then legal discrimination prevented black people from getting many lucrative jobs and educational opportunities.</p>
<p>For instance, H’s father, who served in WWII, used the GI bill to get training as an electrician, but wasn’t able to gain entrance into the unions in Chicago because he was black. He also couldn’t buy in some neighborhoods because he was black. </p>
<p>He already had moved from W. Virginia to Chicago to increase the opportunities for himself. </p>
<p>People who are ignorant about U.S. history often compare African Amerians with people who immigrate here and turn their lives around. There are many black Americans who moved in the U.S. to expand opportunities for themselves, but due to racism were not able to achieve as much as whites who immigrated here even though the blacks worked just as hard.</p>
<p>The legacy of legal discrimination still is affecting black families and their options.</p>