Wealth disparity and the income gap between African Americans and white Americans are not the result of Blacks not taking advantage of education opportunities and poor spending habits. If the poor spending habits of Blacks are responsible for the wealth disparity between Blacks and whites, then why haven’t the poor spending habits of whites closed the gap? Structured racial inequity is seen in two things: How Blacks and whites with similar behaviors get different outcomes and how there are separate racial spheres that engender certain choices and behaviors more than others.
Whites are not as negatively impacted by poor financial decisions as Blacks. This doesn’t mean whites are not negatively impacted, but that trends like conspicuous consumption—even gambling and drug use—do not result in them dropping below the poverty line and never being able to recover.
For Blacks, on the other hand, conspicuous consumption and vice exacerbate the downstream factors of racism like housing segregation, racial profiling, and job discrimination.
The claim that Blacks have poor spending habits is fallacious. As stated, Blacks have less income than whites within their same class. In Boston, the average net worth of a white household is $247,500, whereas for a black household, it is only $8.[1] In Chicago, the majority of white neighborhoods have median incomes of $70,960, whereas Black neighborhoods have an average income of $30,303.[2] In New Orleans, the average African American household has an income of $25,806, and for whites, the average income is $64,377.[3] African-American households are six times more likely to live in poverty than white households.
In the June 7, 2016 issue of The Atlantic, sociologists Raphaël Charron-Chenier, Joshua J. Fink, and Lisa A. Keister of Duke University used data from the Consumer Expenditure Survey to assess the spending habits of white and Black households.[4] Empirical data does not support the belief that Black people have poorer spending habits than whites. The authors note: “For goods that are purchased repeatedly, such as groceries or entertainment, low-income blacks and whites spent relatively similar amounts.”[5] In this study, Charron-Chenier, Fink, and Keister showed that “access to credit, retail deserts, and discrimination could be major factors in why blacks spend less, in aggregate than whites.”[6] In other words, African Americans do not just earn less than whites, but when they earn as much, they spend less. This proves the complete opposite of what’s been alleged about black spending habits! The reason for this trend is the lack of options available to African Americans in contrast to their white counterparts of the same economic class.
In a report titled “What We Get Wrong About Closing the Racial Wealth Gap” for the Insight Center for Social Development, economists and sociologists William Darity, Darrick Hamilton, Mark Paul, Alan Aja, Anne Price, Antonio Moore, and Caterina Chiopris debunk conservative myths about Black economic conditions and their simplistic solutions:
Recent data from the Survey of Income and Program Participation (2014) shows that black households hold less than seven cents on the dollar compared to white households. The white household living near the poverty line typically has about $18,000 in wealth, while black households in similar economic straits typically have a median wealth near zero. This means, in turn, that many black families have a negative net worth.”[7]
Black people do not have poor spending habits; they have less money. They have less money because of the downstream factors of racial segregation and violence. The criminogenic factors of their environments, such as crime, gun-violence, and homicide, are outcomes of a racist system that militates against Black economic progress.
The bogus conservative tale that the African American community is sapping society’s resources by relying too heavily on welfare and government subsidies is a lie. This concocted narrative not only scapegoats a whole community but also absolves the government of its active role in depriving African Americans of economic resources. In truth, the Federal government is directly responsible for the economic deprivation, poverty, and rampant hunger and homelessness that afflict many African Americans today. This dire state of affairs is the inevitable outcome of decades of systemic racism and discriminatory policies that have systematically denied African Americans access to the fundamental building blocks of a stable and prosperous life, such as equitable housing, well-paying jobs, and sufficient healthcare and education.
To grasp just how absurd, false, and preposterous this conservative myth is, envision a marathon runner who begins the race miles behind the other athletes.
The runner must navigate a course littered with obstacles, including lethal needles and a grueling desert landscape. Despite the runner’s valiant efforts, their water supply is pilfered and given to other competitors, leaving the runner parched and struggling to reach the finish line. The marathoner also contends with steep hills and treacherous terrain, as well as harsh weather conditions like scorching heat, freezing cold, and torrential rain. Moreover, the runner must lug a bulky backpack filled with weights, making it harder to keep pace with the other competitors. Now imagine that, as the marathon runner gasps for air and teeters on the brink of collapse, the organizing committee decides to dole out the most inferior water droplets to keep them afloat.
Would it be fair to say that the marathon runner is receiving “handouts”?
The other competitors in the race, on the other hand, have access to energy drinks and supplements that give them an energy boost, as well as a support team to help them along the way. They also have a head start and do not have to confront the same obstacles as the marathon runner. While the marathon runner struggles to find clean and refreshing water, the other competitors have a never-ending supply of drinks and snacks to keep them invigorated throughout the race.
Furthermore, the other competitors are not burdened by the bulky backpack filled with weights that the marathon runner must carry. Instead, they can glide through the course without worrying about the additional load.
The other competitors also have access to high-quality gear and equipment. They wear lightweight and breathable clothes, top-of-the-line running shoes, and advanced tracking devices to monitor their progress. In contrast, the marathon runner must make do with shabby shoes, ill-fitting clothes, and no technology to guide them. Before the race, the other competitors had access to top-notch trainers, nutritionists, and physical therapists who helped them prepare for the competition.
When the marathon runner disproportionately fails to reach the finish line and is compelled to rely on droplets of water to prevent collapsing, the other competitors spout a range of things that echo conservative talking points. They ask, “Why should we give the marathon runner special treatment? They should just work harder and overcome their obstacles like the rest of us.” The other competitors argue, “It’s not our fault that the marathon runner is so far behind! They should take responsibility for their own shortcomings.” Some contend, “I don’t see why we should have to relinquish any of our resources to assist the marathon runner. We earned our advantages through hard work and perseverance.” They suggest, “The marathon runner is just seeking a handout. If they can’t keep up with the rest of us, they should just drop out of the race.” Others even deny the reality of the runner’s struggles, stating, “I don’t believe that the marathon runner is truly facing all of those obstacles. They’re just making excuses for their lack of success.”
For African Americans, this marathon has been an agonizing journey with barbaric slavery practices ripping away their freedom, culture, and dignity; housing discrimination tactics such as blockbusting piercing their path like sharp needles; and redlining policies acting as heavy backpacks that barred them from accessing quality housing or building wealth opportunities. Privileges such as access to education via programs like the G.I. Bill & Homestead Act were reserved only for white Americans—thereby granting whites easier ways of collective resource building, resulting in undue advantage on this uneven course.
It is imperative that we acknowledge how these systems and policies perpetuate inequality against certain groups and work towards dismantling them one piece at a time. When we talk about the disproportionate representation of African Americans on welfare, it is essential to acknowledge how factors outside their control have contributed to this trend.
As Malcolm X noted, Black Americans have been “scientifically maneuvered” by the white man into a life of poverty.[8] This manipulation is reflected through government-led redlining practices that segregated Blacks into under-resourced neighborhoods with minimal access to education or job opportunities. Systemic racism has resulted in Black Americans experiencing racial discrimination across various fields, including employment, education, and housing, for centuries—making it much harder for them to achieve equality with whites. This lack of access has resulted in perceptions that Blacks are lazy or lack ambition, but nothing could be further from reality! The real reasons behind their persistent poverty are political leaders, over time, creating policies aimed at helping white people build more wealth while also suppressing Black economic progress. This has led to African Americans being disproportionately poor. White supremacy systems and racial inequalities propagated by governments have constrained economic mobility for Black Americans.
We must recognize the unwavering determination of this community as they navigate institutional racism and conquer systematic obstacles with entrepreneurial ingenuity. It is crucial to comprehend that most Black Americans are not asking for a helping hand from the government but demanding an end to governmental actions choking their economic advancement.
[1] Boston, F. R. B. O. (2015, March 25). The Color of Wealth in Boston. Federal Reserve Bank of Boston. https://www.bostonfed.org/publications/one-time-pubs/color-of-wealth.aspx
[2] MarksJarvis, G. (2018b, December 29). Chicago’s racial wealth gap far worse than U.S. average, report finds. Chicago Tribune. https://www.chicagotribune.com/business/ct-chicago-racial-wealth-divide-0131-20170130-story.html
[3] Asante-Muhammad, D. (n.d.). The Racial Wealth Divide in New Orleans. Prosperity Now.
[4] Race and Consumption: Black and White Disparities in Household Spending. (n.d.). National Library of Medicine. Retrieved July 19, 2016, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6641572/
[5] Ibid.
[6] Ibid.
[7] Manager. (2021). What We Get Wrong About Closing the Racial Wealth Gap. Insight Center. https://insightcced.org/what-we-get-wrong-about-closing-the-racial-wealth-gap/
[8] BlackPast. (2019, September 23). (1963) Malcolm X, “Racial Separation” • https://www.blackpast.org/african-american-history/speeches-african-american-history/1963-malcolm-x-racial-separation/
