Intersections The Political Economy of Race and Class in the United States

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IntersectionsThe Political Economy of Race and
Class in the United States
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I. Defining Race and Class

• A. Little genetic variance exists in humans
• 1. Why? Bottleneck 100,000 200,000 years ago
• 2. Migration The Urge to Merge
• 3. Result We all have about the same set of
  ancestors in 1000 BC (everyone alive now is
  descended from everyone alive then, but in
  different proportions)
• B. Race not biologically significant
• On average Two random people of the SAME race
  have 90 as many genetic differences as two
  random people of DIFFERENT races

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C. Race is a Social Category

• 1. Nationality as Race How the Irish Became
  White
• 2. Ancestry as Race One Drop
• 3. Multiracial Classification Breaking Down
  Categories

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D. What is Social Class?

• Usual Criteria Income, Wealth, Power
• Prestige occupations
• They Pay More
• They Require More Education
• They Entail More Abstract Thought
• They Offer Greater Autonomy

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E. Intersectionality

• This term refers to ways in which different types
  of divisions or discrimination may reinforce each
  other
• Example Race and Class
• Racial stereotyping denies economic opportunities
  ? lower incomes
• People with lower incomes cant live in nice
  neighborhoods ? housing segregation
• Poor neighborhoods have more crime ? racial
  stereotyping of their residents
• Implication If race and class divisions
  reinforce each other, tackling one will be
  difficult without tackling the other

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II. Explaining Income Inequality
Intersectionality or Something Else?
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A. Unemployment What explains the racial gap?
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1. Name Discrimination
White White Black Black
Male Female Male Female
Jake Molly DeShawn Tiara
Dustin Amy Tyrone Ebony
Brett Claire Jamal Shanice
Wyatt Emily Darnell Jasmine
Logan Katie Terrell Precious

• White names about 50 more likely to be called
  for interviews than Black names
• Sample stereotyped names

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2. Interviewer Bias

1. Identical qualifications ? Whites usually hired
2. Identical statements ? Whites perceived as less
   aggressive
3. Experiments Interviewer race affects evaluation
   of qualifications (circumstances vs. personal
   responsibility)

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B. Education1. It matters, but cant explain
whole income gap
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2. Domino Effect College Education Reinforces
Class Divisions
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C. Perceived Workplace Racism A Problem for Free
Markets
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D. Trends in Income Inequality
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1. Recent Growth A rising tide that lifts some
boats faster than others. Why?
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2. Comparison US vs. World

• Gini coefficient (a measure of inequality)
  higher numbers mean more inequality

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3. Increasing inequality is relatively new
little change for 35-year period
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III. Wealth Inequality Obstacles to Social
Mobility
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A. How Do Families Accumulate Wealth?

• 1. Theory from Classical Economics
• Savings, Wise Investment, Hard Work
• Life Cycle
• 2. Institutional Accumulation Wealth transferred
  through legal channels
• 2/3 of Middle Class Wealth is Home Equity
  Homestead Acts, FHA, Home Mortgage Interest
  Deductions promote this form of wealth

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A. How Do Families Accumulate Wealth?

• 1. Theory from Classical Economics
• Savings, Wise Investment, Hard Work
• Life Cycle
• 2. Institutional Accumulation Wealth transferred
  through legal channels
• 2/3 of Middle Class Wealth is Home Equity
  Homestead Acts, FHA, Home Mortgage Interest
  Deductions promote this form of wealth
• Education Land Grant Colleges, GI Bill,
  Subsidized Student Loans, In Vivo wealth
  transfers from parents
• Retirement Accounts Federal programs, subsidies,
  and tax credits for pensions and savings

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B. Inheritance and Sedimentation

• Wealth transfers perpetuate sedimentation of
  inequality implies that historical
  discrimination creates inequalities that persist
  even after discrimination ends. Two primary
  mechanisms
• 1. Inheritance
• Whites 4 times as likely to Inherit
• Typical Inheritance for Whites10,000
  African-Americans800
• 2. In Vivo transfers (Down payments Education
  and College Tuition) -- Today, most people pass
  their disposable tangible wealth to their
  children during life by education expenditures
  (not by will or inheritance). Other in vivo
  transfers
• Life insurance
• Joint tenancy
• Pensions

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C. Fragility Small Assets Dissipate During
Recessions

• Example During the 2001 recession and jobless
  recovery, Latino and African-American families
  lost over one-quarter of their wealth while the
  wealth of white families grew slowly, 2 percent.

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D. Class Mobility in America Is Inequality the
Future?

• 1. The high cost of being poor. Without
  savings (wealth) or credit (related to wealth and
  income)
• No deposit Funnels people to rent-by-the-week
  motels, more expensive than apartments (largely
  due to food costs)
• Higher utility and other deposits
• Bank scarcity Reliance on money orders,
  check-cashing facilities, payday lenders, pawn
  shops, rent-to-own furniture and appliances
• Higher costs for groceries (no mega-stores),
  laundry, gas
• Car purchases, loans, insurance much higher for
  poor, even controlling for driving record

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2. Intergenerational Mobility

• a. Definition Probability children will have
  different relative income than parents

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• b. Trend
• Shrinking

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E. Wealth Gap is Intersectional Both Class and
Race Matter

• 1. Mobility higher for poor white children than
  poor African-American children

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2. Net Worth Gap Unlikely to Close Soon
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IV. Housing and Spatial Inequality

• The spatial inequality thesis
• Social and racial inequities are geographically
  inscribed (correlated with location)
• Government policy helps determine geography of
  inequality (which is not necessarily natural or
  neutral)
• Implication Political decisions about housing
  and land use can increase or decrease both racial
  and class inequality. As always, politics
  creates winners and losers

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B. Home Ownership

• 1. Present-Day Institutional Discrimination
  Homeownership and Assets
• a. Mortgages Blacks have 60 higher Rejection
  Rate vs. income/asset-comparable Whites
• b. Interest Rates Blacks Pay More (About 1/3 of
  1)
• Translates into 12,000 More for Typical Home
  over 30 years

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c. Subprime Loans

• Racial gap in lending even wealthy
  African-American borrowers get high-risk loans

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2. Lending Gap Widens Pre-Existing Wealth Gaps
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3. Home Ownership Gap Persists
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C. Spatial Racism -- De Facto Segregation

• 1. Decreasing but still high
• 2. More prevalent in North
• 3. Causes
• a. Fragmentation Smaller school districts and
  administrative units

Milwaukee, the most ? segregated city in
America
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b. Government Policy

• Spatial Racism reinforced by
• Zoning laws prevent affordable housing in many
  suburbs
• Housing policies concentrate subsidized housing
• Municipalities subsidize the relocation of
  businesses out of the city
• Transportation spending favors highways,
  metropolitan expansion and urban sprawl
• Court decisions prevent metropolitan school
  desegregation
• School funding is tied to property taxes

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c. Ongoing Housing Discrimination for Renters
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Evidence HDS 2000 Report

• 4,600 paired testers, one minority and the other
  white
• Pose as otherwise identical homeseekers and
  inquire about availability of advertised housing
  units
• Identifying discrimination
• White testers told of available units when
  African-Americans not told 12.3 of the time
• African-American testers told of available units
  when Whites not told 8.3 of the time
• Inference If sample size is large enough,
  discrimination rate of 4 against
  African-Americans on this dimension
• Many dimensions aggregated together to provide
  total rate of housing discrimination whether
  allowed to inspect apartment/house, quoted
  rent/price, rent incentives, etc.

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Other findings

• Systematic steering found Whites likely to be
  recommended houses in white neighborhoods,
  minorities in minority neighborhoods (remember,
  income/employment etc is identical)
• Effect is strongest when older agents encountered
  consistent with prejudice hypothesis
• Interesting Austin singled out as unusually
  likely to generate discrimination against both
  Latinos and African-Americans (only metro area
  with this distinction)

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d. Personal Choice?
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4. Effects of Segregation

• Educational inequality Inter-district busing
  prohibited
• Also reinforces other spatial inequalities (maps
  them to racial boundaries)

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D. Sprawl, Fragmentation and Housing Opportunity
for the Poor

• Zoning Suburban regulations drive up the cost of
  housing and limit rental housing
• New housing becomes unaffordable to low income
  residents
• Disinvestment in the inner city reduces the asset
  value (wealth) of homeowners in inner city
  neighborhoods

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Example Zoning and Housing Opportunity in
Columbus, OH

• Suburban lot size requirements in the Columbus
  suburbs drive up the cost of housing
• Result gt90 of new single-family homes built
  2000-2002 not affordable to gt75 of African
  American and Latino households

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2. Job Sprawl

• Jobs have moved away from the labor pool in many
  metropolitan areas, making connecting job-seekers
  with jobs a challenge which is compounded by poor
  public transportation
• 40 of all suburban jobs cannot be reached by
  public transportation
• Public investment disproportionately favors
  highways over public transportation

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Spatial MismatchJob Growth PublicTransit in
Baltimore

• Job Sprawl also correlates with greater
  segregation for African Americans from employment

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E. Opportunity Segregation Cumulative Impact of
Sprawl, Fragmentation and Spatial Racism

• Low income residents segregated from
  opportunities such as
• Good schools, meaningful employment, safe and
  stable neighborhoods
• This is opportunity segregation
• Also reinforces mapping of class and race

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V. Political Economy of Criminal Justice Who
Commits the Crime and Who Does the Time?

• Juveniles
• Drug dealing
• Use Hard Drugs

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3. Other Destructive Behavior
Self-reported behavior in interviews
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4. Who Does the Juvenile Time?
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Juveniles in Adult Prisons
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B. Who Does the Adult Time?1. Whites Less
Likely to Be Arrested if Reported Graph of Of
African-Americans
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2. Is There Police Bias?

• Increases in minority police ? Increases in
  arrest rate for whites, no decrease in arrest
  rates for minorities

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3. Trials

• Television viewers were so accustomed to seeing
  African-American crime suspects on the local news
  that even when the race of a suspect was not
  specified, viewers tended to remember seeing an
  Africa-American suspect.

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Result Conviction More Likely
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4. Sentencing Disparity
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5. Racial consequences of the war on drugs

• a. Drug Use Rates for Adults ( using past month)

Source 2000 National Household Survey on Drug
Abuse
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b. Disparate Treatment Based on Race

• African Americans constitute about 13 of drug
  users BUT
• 36.8 of those arrested for drug violations
• 42 of those in federal prisons for drug
  violations
• 59 of those in state prisons

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6. Lifetime likelihood of imprisonment

• Among men
• 28.5 African-Americans
• 16 Latinos
• 4.4 Non-Latino Whites
• Among women
• 3.6 African-Americans
• 1.5 Latinos
• 0.5 Non-Latino Whites

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C. Class Bias in the Courts?

• Money matters Wealthy litigants more likely to
  win
• Amicus Curae briefs affect decisions
• State Supreme Courts Repeat players (Haves) Beat
  One-Shot Appellants (Have-Nots)
• Relationship decreases when outside amici favor
  have-nots

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VI. What should we do?

• Simulation results
• Who won?
• What does the starting level of money represent
  in real life?
• What does the Passing GO bonus represent?
• What does the Thimble rule represent?
• Losers What could you have done to become a
  winner?
• Other players Why should you bother playing at
  all?

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B. Structured Life ChancesPlaying the Hand You
are Dealt

• Monopoly is an analogy for the social world we
  live in
• Rules of the Game Structures choices
• People play the game Agency
• Perception vs. Reality
• Perception Everyone starts with same
• Reality People start with varying amounts
• Individual life chances are largely (but not
  entirely) structured by the hand one is dealt
• Social design Rawls and the Veil of Ignorance

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C. Responses to Income Inequality

• Leave it alone
• Argument Inequality creates incentives to
  succeed
• Problem Inequality produces social conflict,
  which can lower economic growth. Inequality can
  reduce incentives if perceived as entrenched
• Income redistribution
• Argument Progressive taxes combined with social
  welfare programs reduce inequality
• Problem Social support encourages inefficiency
  and free-riding behavior
• Reduce effects of inequality better-funded
  public defenders, Robin Hood school funding,
  etc.
• Argument Allows incentives created by inequality
  and perception of class mobility
• Problem Best outcome is to reduce effects, not
  eliminate them (family support, etc) may be
  sufficient to reduce incentives but insufficient
  to overcome perception of entrenchment

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D. Race Affirmative Action?

• Problem Discrimination (Not Just Disparity)
  Exists
• Housing ? Education and Wealth
• Employment ? Income
• Law Enforcement ? Socioeconomic Outcomes and
  Rights
• Dilemma How to Solve? Assume agreement that
  government shouldnt discriminate
• Government allows discrimination Cannot avoid
  moral choices!
• Government bans discrimination Leads to
  buck-passing, enforcement problems.
• Affirmative Action Race-based programs to remedy
  effects of ongoing discrimination

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3. Rationales and Counter-Arguments
Focus Argument For Argument Against
Past Racism Reparations Individualism Identification
Present Inequality Unequal Outcomes by Race Race-Blind Equality of Opportunity
Present Prejudice Check on Discrimination Bureaucratic Expansion/Crudity
Future Diversity Dependence Resentment
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4. Polls Inconsistent

• Does this reflect cognitive dissonance?

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