The Racial Wealth Gap – Fact or Fiction?
The racial wealth gap – fact or fiction? The Black community has a serious problem. That serious problem is a philosophical one. We had a choice to make in the early 20th century: Civil rights or economic self sufficiency.
We chose wrong.
That’s to say we went with the political route W.E.B Dubois of over practical\industrial route of Booker T. Washington.
I am here to tell you right now (please note – this is my opinion) there is no political fix to the problems Black people face in America & the world today.
Only business creation plus economic development can alleviate our troubles.
This came to mind after reading a set of articles on axios.com blog site. The myth of closing the racial wealth gap series – you know, the same far leftwing rhetoric that you typically see every 4 years during election time (we are on to you guys now, y’all not slick!). Having read through it let me add some of my observations. I will take a look at 2 of his points:
Closing the Wealth Gap With Individual Accomplishment
From the article,
The big picture: Data shows that over the last 30 years, even as individual Black Americans have seen increased success, the overall wealth gap has widened.
What’s happening: As of 2016, 15% of white families were millionaires, according to the latest data from the Fed, compared to 7% in the Fed’s 1992 Survey of Consumer
Finances.The percentage of Black households worth more than $1 million rose from about 1% in 1992 to a little less than 2% in 2016.From the myth of the wealth gap, Dion Rabouin Jul 13, 2020
So, the number of Black millionaires close to doubling is not seen as an accomplishment? Imagine what that level would be if not for Obama’s failed policies.
A major impediment to wealth creation is our lower investment rate in the stock market, but the numbers are improving:
67 percent of African-Americans with incomes of at least $50,000 have money invested in stocks or stock mutual funds. That compares with 60 percent in 2010 and 57 percent in 1998,From: Blacks participating more in stock investing, study shows
This number still lags behind White investment rates:
In 1998, 81 percent of whites were investing in the stock market. Now 86 percent of whites with incomes of at least $50,000 have stock or stock fund investments (in 2016).From: Blacks participating more in stock investing, study shows
Mr. Rabouin had this to say about education:
Education also makes much less difference than being white as Black Americans with Master’s degrees have about a 7% chance of becoming a millionaire compared to a 37% chance for white Americans, St. Louis Fed data show.From the myth of the wealth gap, Dion Rabouin Jul 13, 2020
Why is that? Is it racism or something else. The article does not go into what degrees Blacks are getting compared to their White counterparts, which is a strange omission. When you look at Black underrepresentation in STEMS this can account for the financial differences between Blacks and Whites.
Black underrepresentation in STEMS:
Closing the Wealth Gap through Stronger Families
On Black women VS White Women single or married:
These explanations tend to confuse consequence and cause and are largely driven by claims that if Blacks change their behavior, they would see marked increases in wealth accumulation,” note researchers from the Samuel DuBois Cook Center on Social Equity in 2018.From: The myth of closing the racial wealth gap through “stronger families”, Dion Rabouin Jul 14, 2020
But in the same article he has this:
And marriage clearly helps increase family wealth. Data show that married Black women have substantially more wealth than single Black women.
Another thing to point out – what’s missing? The husbands. What are the husbands contributing to each partner? The women’s education level \ choices? Just not of data from this article. Comparing White & Black women is like comparing apples to oranges.
Alright that’s enough from that article, let’s take a look at the real issue in the Black Community (BC) is.
When you examine the economy from the Austrian school of economics lens the entrepreneur is the most important component of a successful economy. In the BC not enough emphasis is put on this. Let’s look at this chart:
The Racial Wealth Gap – the Real Issue
As you can see from the 2012 business consensus Blacks are dead last in terms of jobs created, annual revenue & amount per Black American. Let’s consider another thing – that is the effects the war on poverty had on the BC.
And here is a break down of the numbers here:
We can look at all the data from these progressive sites & analyze it. There is a lot of data, but no real solutions.
In closing, here’s the issue – they never point out the actual problem, Black people have less entrepreneurs than their White, Asian or even Hispanic counterparts.
In future blog posts I will go into this, it is what Thomas Sowell calls the conflict of visions. Booker T represents the constrained & W.E.B represents the unconstrained. Maybe instead of trying to change the world, maybe we should focus on ourselves.