ComproTax Talks!

 Forty years after the Civil Rights Era, African-Americans are falling further behind whites economically.

And that’s just one of the myriad ways that parents pass their economic status onto their children. Conley concluded: “When you are talking about the difference between financing their kid’s college education, starting a new business, moving if they need to move for a better job opportunity — [differences] in net worth might make the difference between upward mobility and stagnation.”

America’s limited and fraying social safety net also means that things like temporary job loss, illness or pregnancy can lead to drops in income — opportunities to fall down the ladder — that working families in other advanced countries don’t face.

Education plays a crucial part in reproducing African-Americans’ lower economic status in their kids. Schools are primarily funded through state and local taxes, which leads to dramatic differences in the education available to kids in wealthier and poorer communities. That goes a long way in explaining a phenomenon long observed in American education: Black children excel until the middle grades, and then their achievement levels begin to decline. At younger ages, large numbers of African American kids are enrolled in early childhood programs like Head Start, but by the middle grades, the picture changes. According to the Urban Institute’s annual report on the state of black America, black children got 82 cents on the white education dollar last year. You get what you pay for, and twice as many black children as white kids are taught by instructors with less than three years of experience.

The wealth gap in America is the accumulated legacy of generations of institutional racism at work. Black kids are starting from behind and aren’t afforded much chance to catch up. Isaacs sliced and diced the economic pie into five equal parts. While nearly one in four white kids are born into the top fifth, the number of black children in that group doesn’t even register on the scale. Three times the percentage of whites are born into the next tier as blacks. Conversely, almost two-thirds of all black children are born into the bottom fifth, while fewer than one in seven white kids face that daunting prospect.

But these factors alone don’t fully explain the disparity seen in white and black families. The Urban Institute’s annual study of black attainment, which looks at five different measures of success in the African-American community, found that the greatest divide between blacks and whites in America is not in political participation, health or social justice, but in the economic realm. Clearly, racism still plays a significant role in black America’s extraordinarily insecure economic status (this should be obvious, but it isn’t). Studies have shown that whites with criminal records are more likely to be hired than blacks with identical backgrounds and no criminal past, and that fake resumes with “black-sounding names” get fewer calls for interviews than others. A study of more than 300,000 auto loans in 33 states even found that black buyers “consistently paid more than white customers, regardless of their credit histories.”

This is a story with little good news on the horizon. As bad as the economic divide between black and white families is now, the subprime lending crisis is going to fall particularly hard on people of color and make matters far worse. In a study the Boston Globe called a “smoking gun on race,” University of Massachusetts researchers found that black and Latino home buyers were more than four times as likely as their white counterparts to take out a subprime mortgage. The research backs up findings in other U.S. cities.

There’s an old saying that white folks keep their wealth in the bank and black folks keep theirs in their houses. Given the degree to which wealth and opportunity intersect, and with an estimated half-trillion dollars worth of low-cost “teaser loans” ready to reset next year, black families in America are likely to face even more opportunities to fall down the economic ladder.