The Hidden Cost of Being African American: How Wealth Perpetuates Inequality

The Hidden Cost of Being African American: How Wealth Perpetuates Inequality

The Hidden Cost of Being African American: How Wealth Perpetuates Inequality

The Hidden Cost of Being African American: How Wealth Perpetuates Inequality

Synopsis

Over the past three decades, racial prejudice in America has declined significantly and many African American families have seen a steady rise in employment and annual income. But alongside these encouraging signs, Thomas Shapiro argues in The Hidden Cost of Being African American, fundamental levels of racial inequality persist, particularly in the area of asset accumulation--inheritance, savings accounts, stocks, bonds, home equity, and other investments-. Shapiro reveals how the lack of these family assets along with continuing racial discrimination in crucial areas like homeownership dramatically impact the everyday lives of many black families, reversing gains earned in schools and on jobs, and perpetuating the cycle of poverty in which far too many find themselves trapped. Shapiro uses a combination of in-depth interviews with almost 200 families from Los Angeles, Boston, and St. Louis, and national survey data with 10,000 families to show how racial inequality is transmitted across generations. We see how those families with private wealth are able to move up from generation to generation, relocating to safer communities with better schools and passing along the accompanying advantages to their children. At the same time those without significant wealth remain trapped in communities that don't allow them to move up, no matter how hard they work. Shapiro challenges white middle class families to consider how the privileges that wealth brings not only improve their own chances but also hold back people who don't have them. This "wealthfare" is a legacy of inequality that, if unchanged, will project social injustice far into the future. Showing that over half of black families fall below the asset poverty line at the beginning of the new century, The Hidden Cost of Being African American will challenge all Americans to reconsider what must be done to end racial inequality.

Excerpt

I met Richard and Keri Brookins in a bookstore in St. Louis. Black and middle class, until recently they had high-paying jobs in the telecommunications industry, working their way up the corporate ladder. Both had worked and taken out loans to get through college, Richard at Webster College and Keri at the University of Maryland and then George Washington University. They began their family and professional lives together in St. Louis. Everything was going according to plan. But when the company they worked for was bought out and departments merged, they both lost their jobs. They had purchased a home a year earlier, cashing out Richard's retirement plan for the down payment. With two young, school-age children, modest savings, and $33,000 in school loans, this college-educated, middle-class family that had built a good life was forced to start over again. Richard decided it was the right time to pursue his dream of starting his own consulting company, but business was so slow during the holiday months that they started living off savings. Keri decided to freelance and found temporary employment. When they drew their savings account down to $2,000, Richard hedged on his dream and started looking for full-time work.

Describing themselves as optimists, Richard and Keri hope that they will not be forced to sell their home or borrow against it to pay living expenses and keep their children in Montessori school. Our conversation ends with Richard telling me that cashing out his 401 (k) retirement account to buy their house was a gamble but that it should pay off. The difference between the Brookins family and many white middle-class families came not in their ambitions, education, achievements, personal decisions, or even incomes but in the family assistance and financial safety net they had behind them.

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