Kilroy Was Here
September 14, 2005
The Real Blame Game
Over at Jane Galt's website, Jane boils down the solution to poverty into one magic formula:

If poor people did just four things, the poverty rate would be a fraction of what it currently is. Those four things are:

  1. Finish high school
  2. Get married before having children
  3. Have no more than two children
  4. Work full time

This is such a simplistic look at poverty (especially poverty among black Americans) that I loathe to even address it; however, let me list some things that might have more of an effect on interurban poverty than above.

  1. Low Housing Values - "Blacks' confinement to segregated neighborhoods systematically reduces their access to investment opportunities. The middle class invests the largest share of its wealth in housing equity, which amounts to 43% of white assets and 63% percent of black assets. Confined to less-desired neighborhoods, blacks attain a much lower average rate of return on their housing investment than do whites. The current generation of black homeowners has, as of 1990, suffered a cumulative loss of $58 billion for this reason.Because creditworthiness depends on wealth, blacks' lower home values mean they are less able to obtain credit on favorable terms than otherwise equally qualified whites: The current generation of blacks has suffered a cumulative loss of $24 billion due to denial of mortgages and higher mortgage interest rates. (See Melvin Oliver & Thomas Shapiro, Black Wealth/White)"
  2. Low Tax Base but Higher Tax Rates - "Black/multiethnic suburbs pay tax rates that are, on average, about 65% higher than those of white suburbs, even after differences in affluence are taken into account." (Thomas J. Phelan & Mark Schneider, Race, Ethnicity, and Class in American Suburbs, 31 Urb. Aff. Rev. 659, 673 (1996))"
  3. Poor Public Services - "Even middle-class suburban blacks suffer from segregation. They enjoy lower-quality public services, and report lower satisfaction with those services, when they live in majority-black suburbs, compared to living in consolidated metropolitan areas where they are a minority. (Ruth Hoogland DeHoog et al., Metropolitan Fragmentation and Suburban Ghettos: Some Empirical Observations on Institutional Racism, 13 J. Urb. Aff. 479, 488-90 (1991))"
  4. Low Business Ownership - "Lack of access to credit is a major cause of low rates of black entrepreneurship. (see Low Housing Values above) Among all privately owned U.S. businesses, half were started by their owners; the other half were inherited or purchased. By contrast, 94% of black-owned businesses are self-started (centuries of discrimination and segregation have left blacks with little to inherit). Business startups depend heavily on personal and family wealth, which is leveraged into lines of credit. Residential segregation, by depressing housing appreciation and reducing access to credit, therefore depresses black business startups, upon which blacks disproportionately rely to get into business. See Thomas D. Boston, Affirmative Action and Black Entrepreneurship (1999), pp. 76-79
  5. Poor Job Opportunities - "Most job growth has occurred in predominantly white suburbs. The cost per mile of travelling to work is at least fifty percent higher for African-Americans than for whites. Often, public transportation does not cross city boundaries. Housing discrimination imposes barriers on blacks to moving where the jobs are located. These factors lead to fewer job opportunities and substantial depression in urban African-American wages. See Harry Holzer and Keith Ihlanfeldt, "Spatial Factors and the Employment of Blacks" New England Econ. Rev. (1996)

These are real problems that demand some governmental policy initiatives to address. Unfortunately, whites continue to engage in 'the blame game'.

Antiblack antipathy preceded segregation, but is reinforced by the reactions of segregated populations to economic disadvantage. Whites often attribute oppositional behavior to supposed racial characteristics rather than to the condition of segregation and disadvantage, reinforcing negative racial stereotypes. See Glenn Loury, The Anatomy of Racial Inequality (2002).

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