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ThePoliticalEconomyofEducation,FinancialLiteracy,andtheRacialWealthGapby

DarrickHamiltonandWilliamDarity,Jr.*Muchoftheframingaroundwealthdisparity,includingtheuseofalternativefinancialserviceproductsfocusesonthepoorfinancialchoicesanddecision-makingonthepartof,largely,black,Latinoandpoorborrowers,whichisoftentiedtoacultureofpovertythesisregardinganundervalueforandlowacquisitionofeducation.Thisframingiswrong–thedirectionalemphasisiswrong–itismorelikelythatmeagereconomiccircumstance–notpoordecisionmakingordeficientknowledge–constrainschoiceitselfandleavesborrowerswithlittletonootheroption,buttoattainandusepredatoryandabusivealternativefinancialservices.Tomakethispoint,whatbetterindicatorofeconomiccircumstancethanwealth?Wealthservesasaprimaryindicatorofeconomicsecurity.Wealthierfamiliesarebetterpositionedtofinanceeliteindependentschoolandcollegeeducations,accesscapitaltostartabusiness,financeexpensivemedicalprocedures,resideinhigheramenityneighborhoods,exertpoliticalinfluencethroughcampaignfinancing;purchasebettercounselifconfrontedwithanexpensivelegalsystem,leaveabequest,and/orwithstandfinancialhardshipresultingfromanynumberofemergencies(HamiltonandDarity,2009).Wealthprovidesfinancialagencyoveroneslife,simplyput,wealthgivesindividualsandfamilieschoice;itprovideseconomicsecuritytotakerisksandshieldagainstfinancialloss.ItisanalogoustowhattheNobelLaureateeconomist,AmartyaSen(2010)hasreferredtoasaHumanCapabilityapproachtodevelopment.Finally,wealthisiterative,itprovidespeoplewiththenecessaryinitialcapitaltopurchaseanappreciatingasset,whichinturngeneratesmoreandmorewealth,andcanbepassedfromonegenerationtothenext.ThepopularityofThomasPiketty’sbookCapitalinthe21stCentury(2013)hasbroughtconsiderableattentiontotheroleofwealthindetermininglifechancesandthegrowingproblemaroundtheworldofstructuralinequalitythatislockedinatbirthasaresultoflaws,policies,institutionsandeconomicarrangement.IntheU.S.context,datafromtheFederalReserve’sSurveyofConsumerFinanceindicatesthatin1989thetoptenpercentofhouseholdsheldabouttwo-thirdsofthenation’sprivatewealth,andby2013thisdisparityacceleratedwiththetoptenpercentnowholdingaboutthree-quartersofthenation’sprivatewealth(Brickeretal.,2014).Moreover,thebottomhalfofallhouseholdsownsonlyaboutonepercent–thisprovidesanovelwayofthinkingabouttheonepercent.

*WewanttothanktheFordFoundationfortheirgeneroussupportofthisresearch.Weareresponsiblefortheviewsexpressedaswellasanyomissionsorerrors.

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Whatisfrequentlyoverlookedinthesedisparitiesisthattheyareevenmorepronouncedwhenraceisconsidered.Infact,raceisastrongerpredictorofwealththanclassitself.Forinstance,blacksandLatinoscollectivelymakeupabout30percentoftheU.S.population,butcollectivelyownaboutsevenpercentofthenation’sprivatewealth(Bruenig2013).Despitetheseenormousdisparities,thepublicsentimentseemstobethatthecivilrightsperiodhaslargelyaddressedmajorracialstructuralbarriers.Thissentimentiscoupledwiththenotionsthatblacksneedto“stopmakingexcuses,”and,ultimately,“takepersonalresponsibility”fortheirlowsocioeconomicposition.Itisthistropethatparticularlyemphasizesagroup-basedunderappreciatingandunderinvestmentinpersonalandhumancapitaldevelopmentonthepartofblacks.Ifblacks(andothersubalterncommunitiesofcolor,likeNativeAmericans,Mexicans,Filipinos,PuertoRicans,andVietnamese)simplywouldreversetheirself-sabotagingattitudesandbehaviors,fullequalitycouldbeachieved(Ajaetal.,2014).Bydefiningthecentralproblemfacingtheblackcommunity,asnotthedeep-seatedstructuresthatperpetuateracism,butratherdeficienciesinternaltoblacksthemselves,thefocusofpolicywouldbecometherehabilitationoftheblackfamilyasopposedtoaddressingon-goingstructuralbarrierssuchasinadequatecapitalfinanceendowment(Ajaetal.,2014).Itisasif,afterthepassageofcivilrightslegislation,conventionalexplanationsforracialdisparityevolvedfrombiologicaltoculturaldeterminism.ForinstanceareportreleasedinFebruary2015,entitledthe“DemographicsofWealth”beginsbycharacterizingmiddleandolder-aged,educated,whitesandAsiansas“Thrivers,”andyoung,lesseducated,blacksandLatinosas“Strugglers”(Bosharaetal.,2015).Theproblemwiththislanguageistheimplicitnotionthattheracialwealthgapisamatteroffinancialliteracy,choiceandagency,asopposedtoinheritanceandstructure.Itdoesnotoffersufficientattentiontotheintergenerationalanditerativeroleofwealthcreation.ThereportattributestheracialwealthgaptoblacksandLatinosinvestinginwhattheycharacterizeas“low-return”housingassetsasopposedtomore“conservative”liquidassets.Theconsumptionandtax-preferredstatusofowningahomeshouldbenoted.ItisstructuralthatahomeisthefirstmajorassetinwhichAmericanstypicallyinvestregardlessofrace.Moreimportantly,whitesgenerallyhavemoreresourcestoinvest–notonlydotheyinvestmoreinliquidassets,theyalsoinvestmoreinhomeownership.Attributingtheracialwealthgaptowhiteshavingamorediverseassetportfolioisambiguousgiventhatitiswealthinthefirstplacethatisassociatedwithhavingamorediverseassetportfolio.Thereportlinksdifferencein“financialhealth”totheracialwealthgap;wherefinancialhealthismeasuredbyconstructinganadditiveindexbasedonself-reportsindicatingifarespondent(1)savedlastyear,(2)missedapaymentlastyear,(3)carriedoveracreditcardbalanceattheendofapaymentperiod,(4)hasmorethan

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tenpercentofthevalueoftheirassetsinliquidform,or(5)hasadebttoincomeratiolessthan40percent.Again,theconcernisreversecausality–theconstructedindexisatleastasmuchaproductoffinancialresourceasitisapredictoroffinancialresource.Ultimatelytheconclusionthattheauthorshave“…document(ed)profoundandpersistentdifferencesinfinancialbehaviorsandfinancialoutcomesacrossracialandethnicgroupsintheUnitedStates”lacksanaccountingforthefactthatwhiteshavegreaterfinancialresourceendowmentinthefirstplace,whichisassociatedwithbothgreaterwealthandmorediversifiedassetportfolios.Financialbehaviorandfinancialliteracyarepracticallylimitedforhouseholdsandracegroupswithlittletonofinancestomanage.Evenstill,GittlemanandWolff(2004),usingpaneldatathatpredatesthepredatorysubprimeandmortgagemarketcrisisthatleduptotheGreatRecession,findnosignificantracialadvantageinassetappreciationratesforhouseholdswithpositiveassetsoncehouseholdincomeiscontrolled.Thisfindingisinconsistentwiththenotionthatblackspossessalowerfinancialacumenasanexplanationfortheracialwealthgap–andthisisdespitethewelldocumentedevidenceofhistoricalandongoinghousingandlendingdiscrimination(Bocian,LiandErnst,2010;InstituteonRaceandPoverty,2009;OliverandShapiro,2006;andKatznelson,2005).Also,theGittlemanandWolff(2004)studyisatoddswiththebeliefthat,insearchofimmediategratification,blacksareprofligatewhenitcomestosaving.Theyconfirmthatthesavingscomponentofwealthrevealsaslightsavingsedgeforblackhouseholds,againafteradjustingforhouseholdincome.ThisisconsistentwiththehistoricalevidencegeneratedbyeconomistsrangingfromMiltonFriedman(1957)toMarjorieGalenson(1972)toMarcusAlexis(1971),whoallfindthat,afteraccountingforhouseholdincome,blackshaveaslightlyhighersavingsratethanwhites.LiquidAssetsWhenitcomestoliquidassets–financialassetsthatcanbereadilyconvertedintocash–blacksandLatinosarenearlypenniless.Basedonthe2011,SurveyofIncomeandProgramParticipation(SIPP),blackfamilieshaveabout$200inmedianliquidassets,whichisover1000timeslessthanwhitefamilieswith$23,000inmedianliquidassets(Tippetetal.,2014).ForLatinofamilies,themedianisonly$340,whiletheAsianmedianestimateis$19,400.1Moreover,ifretirementsavingsare1SIPPisoneofthefewnationaldatasetsinwhichassetanddebtinformationcanberobustlymeasuredforAsian-Americans.LedbyWilliamDarity,Jr,andDarrickHamilton,theNationalAssetScorecardforCommunitiesofColor(NASCC)projectrevealsthattheassetanddebtpositionofbroadlydefinedethnic/racialgroupsvariesconsiderablybasedonancestraloriginandmetropolitanarea.Forinstance,theColorofWealthinLosAngelesreportindicatesthatthemedianliquidwealthfor

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removedfromourestimatesofliquidassets,thenthetypicalwhiteorAsianfamilyhasonly$3,000inliquidassets.Thatisdramaticallylargerthanthe$100and$25respective“financialcushions”forLatinoandblackfamiliestodealwithanyexpectedorunexpectedexpensesorbudgetaryshortfalls.Toputthisincontext,twenty-fivedollarswouldnotbeenoughtofeedablackfamilyoffourforasingleday(Tippetetal.,2014).CollegeDebt,IncomeVolatilityandDiscourseTheconventionalwisdomoftenpresumesawideracialvarianceindebtasindicativeofblackandLatinofinancialirresponsibility–however,suchapresumptionisnotempiricallyvalid.Tippetetal.(2014)findsthat47percentofwhitefamiliesreportedhavingsomeunsecureddebt,whichisslightlymorethantheestimatesof45,44,and42percentforblacks,LatinosandAsianfamilies.Moreover,aftercontrollingforbasicsocioeconomicanddemographiccharacteristics,wefindnosignificantdifferencebetweenblackandwhiteunsecureddebtholdings,whilebothAsianandLatinofamilieshadsignificantlylessunsecureddebtthantheirwhitefamilycounterparts.TheSIPPdataidentifiesthreecategoriesofunsecureddebt:(1)storebillsandcreditcarddebt;(2)loansfromabankorcreditunion;and,(3)“other”typesofdebts,includingstudentloansandmedicalbills.Itisthe“other”categorywherewefindsignificantdifferencesbyrace–21.5percentforblacks,19percentforwhites,15percentforLatinos,and14percentforAsians.Itisimportanttonotethatthisdebtrepresentsborrowingforschoolandothercriticalneedsincludingmedicalattention(Tippetetal.,2014).Amongtherelativelywell-offstudentswhoareabletoattendcollege,blackstudentsare25percentmorelikelytoaccumulatestudentdebt,andonaverageborrowingover10percentmorethantheirwhitestudentscounterpart(Pauletal.,2016).Tocompoundtheliabilityofdebt,blackstudentsareone-thirdlesslikelytocompletetheirdegrees,oftenbecauseofthegreaterfinancialburdenthatprecipitatedstudentloanborrowinginthefirstplace–29percentofblackstudentsand35percentofLatinostudentswholeavecollegeaftertheirfirstyeardosoforfinancialreasons(Pauletal.,2014).Weknowthatnotalldebtisthesame.Infact,somedebtisindicativeofgoodfinancialhealth.Forinstance,housingdebtandstudentloandebttraditionallyhaveprovidedAmericanswithaccesstofinancetopurchasetheeconomicsecurityofanAsiansubcategoriesrangesfromashighas$245,000forAsianIndiandescendantsto$3,000and$500,respectively,forKoreanandVietnamesedescendants(DeLaCruz-Viescaetal.2016).Incontrast,theColorofWealthinWashington,DCreportestimatesamedianliquidwealthof$22,000,$75,000and$35,000,respectively,forAsianIndian,KoreanandVietnamesedescendantfamilies(Kijakazietal.,forthcoming).

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appreciatingassetofahouseorajobintheprofessionalormanagerialsector;whereascreditcarddebtandotherunsecuritizeddebthavetraditionallybeenassociatedwiththeliabilityofanexhaustibleconsumptiongoodorsomeotherdepreciatingasset.However,whatwetraditionallyconceiveofasgoodandbaddebthasdifferentimplicationsonceweconsiderrace,andtheprevailingframeworkoftargetingunprivildgedracialgroupswithinferiorhousingandeducationalproducts,predatoryfinance,aswellasongoinghousingandlabormarketdiscriminationthatlimitsthechoicesetandrateofreturnstohomeownershipandacollegedegreebasedonraceandethnicity.2Forinstance,a2014reportfromtheWisconsinHOPElab,whichstudieshighereducationandstudentloantrends,findsthat“(n)otonlyhaveblackstudentsalwaysborrowedmorethanwhitestudents,foraslongasthefederalgovernmenthastrackedthesethings,butthegrowthintake-upratesoffederalstudentloansbetween1995-96and2011-12wasalsogreaterforblackstudentsthanwhitestudents”(Goldrick-Rabetal.,2014)Thedifferencesareespeciallyacuteforthemostriskystudentloans,suchasparentloansandotherunsubsidizedloans.Thesesloanscomewithhigherinterestrates,fewersafeguardsformanaginglong-termrepayment,andhigherratesofdefault(Hamiltonetal.,2015).Thereisalsoevidencethatfor-profitcollegesanduniversities,whichoftenissuemisleadingclaimsaboutgraduationandjobplacementrates,disproportionatelyenrollandtargetblackstudents(SeeHuelsman,2015).3Huelsman(2015)describes2AreportbythePewCharitableTrusts(2015)entitled“TheComplexStoryofAmericanDebt:Liabilitiesinfamilybalancesheets”citesresearchassuggesting:“…thatwhitefamilieshavebetteraccesstomortgages,andcreditgenerally,thanblackandHispanicfamilies.Evenifmortgagesaresecured,blackandHispanichomeownersexperiencehigherratesofforeclosureandhousingdistressthanwhitefamilies,inpartbecausetheyreceiveriskierloans.Further,homeequityforblackhomeownershasnotincreasedatthesamerateasithasforwhitehomeownerslargelybecausehomevaluesinminorityneighborhoodshavebeenslowtorecoversincethehousingcrisis,andsohavegeneratedlowerreturnsonmortgagedebt.Otherresearchsuggeststhatinheritanceandotherintergenerationalwealthtransfersoftenbenefitwhitefamiliesmorethanblackfamilies…”Asaresultofthehigherfinancecostsandlowerappreciation,DorothyBrown(2012),aprofessoroftaxlawatEmoryUniversityurgescautionforthosepromotinghomeownershipasamechanismtobridgetheracialwealthgap.Brownassertsthat“(p)utsimply,themarketpenalizesintegration:Thehigherthepercentageofblacksintheneighborhood,thelessthehomeisworth,evenwhenresearcherscontrolforage,socialclass,householdstructure,andgeography.”3Huelsman(2015)statesthat“(t)heUniversityofPhoenix,forexample,wasspendingasmuchas$400,000adayonadvertising.Adsforthesecollegeswere

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for-profitcollegeexperiencesasoftenresultingina“low-valuedebtbomb,”wheretheaveragestudentdebtiscloseto$40,000,about$15,000morethancomparablegraduatesatpublicfour-yearcolleges,andover$6,000morethangraduatesathistoricallyblackcollegesanduniversities(HBCUs).Anevenlargerproblem–particularlyrelevantforblackandLatinostudents–isaccruingcollegedebtwithoutultimatelyattainingadegree.Thetablebelowillustratesthecollegecompletionrateswithinsixyearsofenrollmentbeginningin2007bycollegeanduniversitytypeandbyraceandethnicity.Asianshavethehighestcompletionratesacrossallschooltypeswhileblackshavethelowest.For-profitcollegesanduniversitieshavethelowestgraduationratesacrossallracialandethnicgroupswithcompletionratesmorethan20percentagepointslessthanpublicschoolenrollmentforallgroups.Nearly80percentofblackstudentswhoenrollinafor-profitfour-yearcollegewilldropoutwithinsixyears.Studentsenrolledatpubliccollegestypicallyarefacedwithtensofthousandsofdollarslessindebtincomparisontofor-profitschools.Whenqueriediftheyhadtodoitoveragain,wouldthey,blackandLatinoborrowersindicatedsubstantiallymoreregretfortakingoutstudentloansthantheirwhitecounterparts(PewCharitableTrusts,2015).FourYearCollege/UniversityGraduationRateswithinSixYearsfromEnrollmentin

2007 StudentRace/EthnicityCollege/UniversityType White Black Latino AsianPublic 60.7 40.3 50.7 68.0Non-Profit(Private) 68.3 44.7 60.9 77.0For-Profit(Private) 39.9 22.4 35.0 43.1*BasedonNationalCenterforEducationStatistics(NCES)https://nces.ed.gov/programs/digest/d14/tables/dt14_326.10.aspFurther,thegrowingcontextofincomevolatilityinU.S.labormarkets,whereAmericansincreasinglyhavelesscontrolofwhenandforhowlongtheyworkisevenmorepronouncedbasedonraceandclass(Lambertetal.,2013;HardyandZiliak,2014;andHardy,2016).Thismakesaccesstoshort-termcreditevenmoreessential.Thus,thereisgreaterpressureformoreAmericanstoturntocreditcardstomeet,shortandlong-term,budgetaryshortfall.

ubiquitousincommunitiesofcolor,oncommercialsfordaytimetelevisionprograms,atbusstopsandsubways,andinotherplaceswhereblackandbrownpeoplecongregated.Theyenlistedleadersintheblackcommunitytoadvertiseontheirbehalf,ascomedianandtelevisionhostSteveHarveyhasforStrayerUniversity,orasAlSharptondidwhendevotingglowingtelevisioncoveragetotheUniversityofPhoenixinaspecialthatwassponsoredbythefor-profitbehemoth.”

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Thisisdespiteanattitudinaldisdainforcreditcarddebtbasedonsurveysmeasuringconsumerattitudestowardsvariousfinancialproducts(PewCharitableTrust,2015).Worsethencreditcarddebt,giventheirgreatervulnerabilitytoincomevolatilityandhavinglittletonoliquidassets,toagreaterextent,blackandLatinofamilieshavegreaterneedforunconventionalpredatorylendingproductslikepaydayloansasalastresort,todealtodealwithanynumberoffinancialexigenciesorbudgetaryshortfalls.Paydayloansaremarketedasshort-termholdoverloansuntiltheborrowersnextpayday,butthebigproblemwiththeseexorbitantlyhighinterestrateproductsisthattheyoftenleadtodebttrapsthatabsorbmoreandmoreoftheborrower’sincomeininterestandfeesuntil,ultimately,theborrowerdefaultsontheoriginalprinciple(Wolff,2015).EvidencefromtheU.S.FinancialDiaries(USFD)projectindicatesthatthesepredatoryproductsareoftentrulyutilizedasalastresortfinanceoptions(MorduchandSchneider,2013).Yetinstill,thePewCharitableTrusts(2015)reportonAmericandebtconcludesthattheracialwealthgaphasmoretodowithalackofassetsforblackandLatinofamiliesthanracialvariationindebtoranabundanceofdebtonthepartofblacksandLatinos–instead,thereportcitesotherresearchassuggestingthatinheritanceandotherintergenerationalwealthtransfersasbenefitingwhitestoamuchlargerextent.Nonetheless,conventionaldiscourseupheldbyDemocrats,Republicans,blacks,andwhitesalike,stillemphasizeseducationandpersonalresponsibilityonthepartofblacksthemselvesasthemechanismtobridgeracialdivide.Itisanarrativethatthenation’sfirstblackpresidenthasbeenadvancing–take,forinstance,the2004DemocraticNationalConvention,whenthencandidateforIllinoisU.S.Senateseat,BarackObamadeliveredakeynoteaddress.HisspeechcalledforAmericanharmony,makingthecasethatwearenotredandbluestates,liberalsandconservatives,butratherwearetheUnitedStates.Withinhisthemeofunity,onesectionofthespeechmadementionofrace:

“…Gointoanyinner-cityneighborhood,andfolkswilltellyouthatgovernmentalonecan'tteachkidstolearn.Theyknowthatparentshavetoteach,thatchildrencan'tachieveunlessweraisetheirexpectationsandturnoffthetelevisionsetsanderadicatetheslanderthatsaysablackyouthwithabookisactingwhite.Theyknowthosethings…”4

Obamausestheoccasionofhisfirstnationalplatformtosingle-outandchastiseblackyouthsandtheirfamiliesasthecauseoftheirownunderachievementwithanemphasisoneducation.Obamareiteratedthethemesofhis2004keynoteinhis4http://www.washingtonpost.com/wp-dyn/articles/A19751-2004Jul27.html

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“MorePerfectUnion”speechasapresidentialcandidatein2008,addingthatblacksshouldceasemakingparticularisticclaimsonAmerica(HamiltonandDarity,2010).

“FortheAfrican-Americancommunity,thatpath[toamoreperfectunion]meansembracingtheburdensofourpastwithoutbecomingvictimsofourpast.ItmeanscontinuingtoinsistonafullmeasureofjusticeineveryaspectofAmericanlife.Butitalsomeansbindingourparticulargrievances–forbetterhealthcare,andbetterschools,andbetterjobs–tothelargeraspirationsofallAmericans–thewhitewomanstrugglingtobreaktheglassceiling,thewhitemanwho’sbeenlaidoff,theimmigranttryingtofeedhisfamily.Anditmeanstakingfullresponsibilityforourownlives.”[emphasisadded]5,6

Theaboveexemplifiesadominantpoliticaldiscourseonrace,andracialdisparitythatemphasizes;(1)intheaftermathofthecivilrightsmovement,Americahaslargelytranscendeditsracialdivide;(2)thatwhateverracialdisparitiesremainareoverwhelminglytheresultofactionsorinactiononthepartofblacksthemselves,and(3)thatthereisnothingparticularabouttheoppressionexperiencedbyblacks,assuchblacksshouldceasemakingparticularisticclaimsonAmerica(Hamilton,2015).TheimplicationofthisdiscourseisashiftinpublicsentimentawayfromapublicresponsibilityfortheconditionofblackAmerica(HamiltonandDarity,2009).ThePoliticalDiscourseofRaceandAffirmativeActioninHigherEducation5http://www.washingtonpost.com/wp-dyn/articles/A19751-2004Jul27.html6ThisdiscourseisnotuniquetoObamanorishethefirsttoinitiateit.Heissingledouthere,inpart,todemonstratethatitisnotarhetoricuniquetowhiteorpoliticallyrightindividuals,but,rather,thatitcutsacrossraceandthepoliticalspectrum;and,furtherbecausehecommandsthe“bullypulpit”fromtheprestigiousofficeofthepresident.Thethemeof“personalresponsibility”onthepartofblackpeopleappearstobeacommonthemeinPresidentObama’sspeechesregardingracialdisparity.Examplesincludehis2008Father’sDayspeechasU.S.Senator(http://www.politico.com/story/2008/06/text-of-obamas-fatherhood-speech-011094);2009NAACPCentennialConventionaddress(https://www.whitehouse.gov/the-press-office/remarks-president-naacp-centennial-convention-07162009);2013MorehouseCollegecommencementspeech(http://blogs.wsj.com/washwire/2013/05/20/transcript-obamas-commencement-speech-at-morehouse-college/);andmostrecentlyhisApril2016remarksintownhallwithyoungleadersintheUK,where,whenqueriedabouttheUS#BlackLivesMattersocialmovement,heopinedthatrepresentativesofthemovement“…can'tjustkeeponyelling…Thevalueofsocialmovementsandactivismistogetyouatthetable…You,then,havearesponsibilitytoprepareanagendathatisachievable…(https://www.whitehouse.gov/the-press-office/2016/04/23/remarks-president-obama-town-hall-young-leaders-uk).”[emphasisadded]

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Takeaffirmativeactionforexample.Althoughitisdesignedasapositiveanti-discriminationpolicyaimedatdesegregatingeliteinstitutions,includinguniversityadmission.Acommonperspectiveamongstwhitesandgrowingperspectiveamongstblacksisthatitamountsto“reversediscrimination”where"unqualifiedblacks"taketheadmissionsslotsfrom“qualifiedwhites.”Notonlydoesthisargumentunderscoreawhite-entitlementtopreferredpositions,butitalsoassumesthatwhitesgenerallyare“qualified,”andbydefault,blacksgenerallyarenot.Itignoresthehistoricaladvantageandprotectedaccesswhitescontinuetoholdviaadmissionspreferencesforuniversitylegacies,childrenofdonors,andotherchannels,whichserveasexamplesofhiddenaffirmativeactionfortheprivilegedgroup(Darityetal.,2014).Thereisalsothewell-documentedevidencefromexperimentalpsychology,developedbyClaudeSteeleandJoshuaAronson(1995)involvingthephenomenaofstereotypethreat,stereotypeboostandstereotypelift.Collectivelytheseeffectsdemonstratethatoutcomesonhighstakesstandardizedtests,liketheSAT,underestimatetheachievementandcollegereadinessfortesttakersfromgroupswhomsocietystigmatizesascognitivelyinferior,andcorrespondinglyitexaggeratesthescoresforindividualsfromgroupswhomsocietydeemscognitivelysuperior.Theconcernthateliteuniversitiesaregoingtobeover-runby"under-qualified"and"unmeritorious"blacksshouldbereplacedwiththemorealarmingconcernthattheabsenceofaffirmativeactionwouldlikelystrengthenthehistoricaladvantageandprotectedaccessforthemoreprivilegedwhitegroup.Anotherpopularbeliefisthata“morefair”formofaffirmativeactionistosubstitutefamilyincomeforraceasacriterionforselectivecollegeadmissions.Undoubtedly,classandrace-basedaffirmativeactionpoliciesarenotmutuallyexclusiveandbothcouldcontributetodesegregatingeliteinstitutions,butrace-basedaffirmativeactionisspecificallydesignedtocombatpersistentracialdiscriminationwhileclass-basedpoliciesarenot.Indeed,blacksfrommoreaffluentfamiliesarenotinsulatedfromracialdiscrimination.7Despitethepromiseofintegration,thecollegeexperienceremainsmarkedlydifferentbasedonrace.Forinstance,blackstudentsfrequentlyreportfeelingsofisolationandtheburdenofrepresentingtheirraceinalienspacesonpredominantlywhitecampuses.Infact,somespacesareexplicitlyhostile.RecallthevideothatwasexposedinMarch2015ofmembersfromtheSigmaAlphaEpsilonchapterattheUniversityofOklahomasigning,“TherewillneverbeaniggeratSAE.Youcanhanghimfromatree,buthe'llneversignwithme.Therewillneverbeaniggerat

7SeeAjaetal.(2013)foranopinionpiecethatadvocateswealthasopposedtoincomeforthosegenuinelyinterestedinclass-basedaffirmativeaction.

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SAE.”8TheSAEOklahomachapterwasimmediatelyclosed,butthedamagefromthisegregiouscase,whichjusthappenedtobecaughtonvideo,wasclear(Hamiltonetal.,2015).Theconcernsofracialhostilityonmajoritywhitecampusesarenotalwaysinresponsetostudentactions.Forinstance,astudythatwaseventuallypublishedintheJournalofLaborEconomicsconductedbytwoDukeUniversityfacultymembersandagraduatestudent(PeterArcidiacono,EstebanAucejo,andKennethSpenner,2012)claimingthatblackstudentsathighlyselectiveinstitutionstendtoswitchfromwhattheydeemas"harder"majors(naturalsciences,engineering,andeconomics)to"softer"majors(humanitiesandsocialsciences)asaresultofenrolledblackstudentspossessingweakeracademicbackgrounds.Inresponsetothestudy,theblackstudentsatDukeprotestedandclaimedthatthestudywasboth“hurtfulandalienating.”9TheauthorsusedSATscoresastheindicatorofweakeracademicpreparation.ThemeanSATscoresforthemathandverbalsectionsforthecohortofstudentsthattheyexaminedwas1416forwhitestudentsand1275forblackstudents,adifferenceofonlyabout140points.Aspointedoutearlier,theironywiththeuseofSATscoresisthatitisthepresenceofthestereotypeitselfthatseverelylowersperformanceofblackstudentsontheSAT.Moreover,astudybyTaliaBarandAsafZussman(2012)foundthatfacultyinthenaturalsciencestendtoassignlowergradestoblackandLatinostudents,evenaftercontrollingfortheiractualSATscores.Thereisanongoingstereotypeofcognitiveinferiority,albeitimplicitorexplicit,thatisoftenascribedtoblackstudentsbyfacultyatpredominantlywhiteinstitutions.Thus,inthiscontextofdiscouragement,therearedisincentivesforblackstudentstomajorinscienceandmath,irrespectiveofacademicpreparation(Darityetal.,2014).Over80yearsago,inhis1935essayentitled“DoestheNegroNeedSeparateSchools?”W.E.B.DuBoisaccentuatedtheneedforastereotypesafeenvironmentwitha“sympathetictouchbetweenteacherandpupil.”InDuBois’ownwords:

“Itissimplycallingaspadeaspade.ItissayinginplainEnglish:thataseparateNegroschool,wherechildrenaretreatedlikehumanbeings,trainedbyteachersoftheirownrace,whoknowwhatitmeanstobeblackintheyearofsalvation1935,isinfinitelybetterthanmakingourboysandgirlsdoormatstobespitandtrampleduponandliedtobyignorantsocialclimbers,whosesoleclaimtosuperiorityisabilitytokick"niggers"when

8https://www.washingtonpost.com/news/morning-mix/wp/2015/03/09/university-of-oklahoma-fraternity-suspended-after-racist-chant/9http://blogs.wsj.com/ideas-market/2012/01/17/duke-affirmative-action-study-angers-some-students/

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theyaredown.Isay,too,thatcertainstudiesanddisciplinenecessarytoNegroescanseldombefoundinwhiteschools.”

ForDuBois(1935)itwasnotaquestionofsegregationversusintegration,perse;"amixedschoolwithpoorandunsympatheticteacherswithhostilepublicopinion...isbad,"andasegregatedschoolwith"inadequateequipment,poorsalaries,andwretchedhousingisequallybad.”DuBoisrecognizedthatlearningenvironmentsareshapedbypeercooperationandthatadministrators,teachers,andstudentsshapethecultureandcurriculumoftheeducationalprocessbyinfluencingstudent’snorms,motivations,aspirationsandeducationalcontent(Hamilton,2014).HistoricallyBlackCollegesandUniversities(HBCUs)andAlumniDonorCapacityRatherthanlivinguptoaself-fulfillingprophecyofanticipatedacademicfailurebyblackstudents,HBCUsofferblackstudentsthepotentialofa“stereotypesafe”environmentwithafacultyandcurriculum“sympathetic”totheirachievementandrelevanttotheirlifeexperience.GiventhecontinuanceofracialhostilityasvividlyexemplifiedbytheleakedvideooftheUniversityofOklahomaSAEchapter,andtheongoingsocietalpresumptionofblackcognitiveinferioritymaintainedonmanycollegecampuses,HBCUshaveclearlynotoutlivedtheirpuporse.Formanyblackstudents,theyaresaferandmorenurturingplaces.ThismayexplainwhymodestlyresourcedXavierUniversity,ahistoricallyblackcollegeinNewOrleans,LA,withonlyabout3,000students,leadsthenationinproducingblackgraduateswhoeventuallygraduatefrommedicalschool(Hamiltonetal.,2015).ManyHBCUsbeganeducatingblacksduringtheinsidiousJimCrowerawhenmostinstitutionsofhighereducationwerereservedforwhitesonly.10HBCUscontinuedtoservemanylow-incomeandfirst-generationcollegestudentswellpastthecivilrightsera.Theschoolsremainavitalsourceofblackprofessionals,includingphysiciansandscholars.Unfortunately,theeraofstateandfederalausteritypoliticshaveleftmanyHBCUsparticularlyvulnerabletofinancialexigencyorextinction.Forinstance,in2011theU.S.DepartmentofEducationmadechangestothelengthoftimePellGrantscanbeusedbycollegestudents,followedbymorestringentparametersattachedtotheParentPlusLoanprogramin2012.ThesechangescorrespondedwithlargedropsinenrollmentatmanyHBCUswithsomestudentsforcedtodropoutmid-semester–thechangesmayendupexacerbatingthealreadylargeendowmentdifferentialsbetweenHBCUsandpredominantlywhite10IraKatznelson’sWhenAffirmativeActionWasWhite(2005)documentsthat,by1950,theGIBillgeneratedmorespendingoneducationthantheMarshallPlanthatrebuiltEurope.Whilethisfinancialstimulusledtoexponentialgrowthofhistoricallywhitecollegesanduniversities,raciallyunequaldistributionofGIbenefitsalongwithinsufficientJimCrow–segregatedhousingconstrainedtheabilityofHBCUstogrowandcapacitytoaccommodateblackveterans(Hamiltonetal.,2015).

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institutions(PWIs).Thetop10HBCUendowmentsrangefrom$586to$38millionincomparisonto$32to$6billionforPWIs,whileinthelast20yearstheendowmentgapbetweenPWIsandHBCUshasdoubled(Ashetal.,2015).AspunitiveandausterityreformscontinuetopermeateU.S.highereducationpolicy,ageneralattitudeconcerningHBCUsisthatiftheycannotsupportthemselvesindependently,thentheyshouldbeeliminated.Iftheyaretosurvive,anunderlyingsentimentisthatalumnigivingmustrise.Thequestionisnotwillingness,but,doesthealumnibaseofHBCUshavethewealthcapacityto“save”HBCUs(Hamiltonetal,2015)?Accordingtothe2013SIPPdata,thetypicalblackfamilyholdsabout$7,113innetworth–amere6centsforeverydollarofwealthheldbythetypicalwhitefamily,whosemediannetworthexceeds$100,000(Tippetetal.,2014).Evenforfamilieswhoseheadearnedacollegedegree(thealumnidonorbaseforcolleges),thetypicalblackfamilyhasonlyabout$23,400inwealth,whilethetypicalwhitefamilyhascloseto8timesthatamountwithawhitemedianwealthof$180,500.Thisamountstoadifferenceofabout$160,000betweenthesesimilarlyeducatedhouseholds.Finally,whenwecomparefamilywealthforheadofhouseholdsthatearnedagraduateorprofessionaldegreethedisparities,andhenceresourcestogive,areevenlarger.Thetypicalwhitefamilywithaheadthathasagraduateorprofessionaldegreehasgreaterthan$200,000morewealththanthetypicalsimilarlyeducatedblackfamilies–$293,100versus$84,000inmedianwealth(Hamiltonetal.,2014).Also,thevastmajorityoftheirlimitedwealthisheldinhomeequity,moneythatcannotbetappedforalumnidonation–thetypicalblackfamilyonlyhas$200inliquidwealthinclusiveoftheirretirementsavings.Asdescribedearlier,therelativelylowblacknetworthisnotduetoablackpropensityforprofligacy.Afteraccountingforincome,thebestavailableevidenceindicatesthatthereislittledifferenceinblackandwhitesavingsrates–andinsomeincomecategoriestheblacksavingsrateisslightlyhigher.Moreover,researchbySteinbergandWilhelm(2005)findsthat“Ifanything,blackfamiliesareslightlymoregenerous[thanwhitefamilies]($1,363perfamilyversus$1,325).”Also,theworkbyNginaChitejiandDarrickHamilton(2002)demonstratesthatifweexpandournotionofcharitablegivingtoincluderelativesandfriendsinneed,blackfamilieshaveevenlessresourcestogiveasaresultofhavingsubstantiallymorekininneedthantheirwhitemiddle-incomecounterparts.Basically,blackalumniarenotfailingblackcolleges,rather,thelegacyoftheracialwealthgaphasrenderedtheblackcommunitywithmarkedlylowerfinancialresourcesandhigherfinancialneed.ThePoliticsofPersonalResponsibility,EducationandAusterityUltimately,bydefiningthecentralproblemfacingtheblackcommunity,asnotthedeep-seatedstructuresthatperpetuateracismandinequality,butrather,

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deficienciesinternaltoblacksthemselves,thefocusofpolicybecomestherehabilitationoftheblackfamily.Hereinliesmuchoftherationaleforausteritypolicies;ifbehavioralmodificationparticularlywithregardstopersonalandhumancapitalinvestmentisthecentralissue,whyfundgovernmentagenciesandprograms,which,atbest,misallocateresourcestoirresponsibleindividualsand,atworst,createdependenciesthatfurtherfuelirresponsiblebehavior?Asaresult,laissez-faire,austerity,andinterventionpolicieslikethepresident’s“MyBrother’sKeeper”initiative–which,ignorestheplightofblackwomenaltogether,andattempttoincentivizeso-called“defective”blackmalestobemore“employable,”ratherthanaddressingthelabormarketconditionsthattheyface–areallconsistentwiththeeconomicorthodoxyofmarketprimacy,andafocusontheindividualinallocationsanddistributions(Ajaetal.,2014).Yet,overthepastfortyyears,regardlessofeducation,theblackunemploymentratehasremainedroughlytwiceashighasthewhiterate.Therehasbeenonlyoneyear,1999,inwhichtheblackunemploymentratehasbeenbelow8.0percent.Incontrast,therehaveonlybeenfouryearsinwhichthewhiteratehasreached8.0percent.If8.0percentisthedemarcationofcalamity—asRepublicanpunditsdeclaredduringthe2012electioncycle—thenblackAmericansareinaperpetualstateofemploymentcrisis(Hamilton,2016).Inspiteoftheseenormousdisparitiesinemployment,discoursehasfocusedprimarilyoneducationasthedriverofupwardmobility.Thepresumptionisthatifblacksweremoreresponsible,madebetterfinancialdecisionsandweremorefocusedoneducation,theycouldgetagoodjobandpursueapathwayofeconomicsecurity.Yet,ateverylevelofeducation,theblackunemploymentrateisabouttwiceashighasthewhiterate.Furthermore,censusdatarevealsthatwhitehighschooldropoutshavelowerunemploymentratesthanblacksthathavecompletedsomecollegeorearnedanassociate’sdegree.Educationisfarfromacure-all.AreportbyJanelleJonesandJohnSchmit(2014)entitled“ACollegeDegreeisnoGuarantee”indicatesthattheunemploymentrateforblackrecentcollegegraduatesexceeds12percent,andisashighastenpercentforblackrecentgradswithscience,technology,engineering,ormathrelated(STEM)majors.Ourrecentresearchbriefentitled,“UmbrellasDon’tmakeitRain:WhyStudyingandWorkingHardIsn’tEnoughforBlackAmericans,”critiquesthepreponderanceofresearchandpublicpolicythatassertsthateducationandhardworkarethedriversofupwardmobility,especiallyasitrelatestoracialandethnicdisparity(Hamiltonetal.,2014).Thetitleismeanttohighlightthatsimplyobservinghigherlevelsofeducationamongstwealthierindividualsdoesnotnecessarilymeanthateducationalattainmentleadstowealth.Infact,itseemsquitereasonablethathavinghighlevelsofwealthpredisposesindividualsandfamiliestohavegreateraccesstohigherlevelsofeducation.

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Thereporthighlightsthatthemedianwealthforblackfamilieswhoseheadearnedacollegedegreeisonlyabouttwo-thirdsofthemedianwealthofwhitefamilieswhoseheaddroppedoutofhighschool–itamountstoadifferenceofmorethan$10,000($34,700v.$23,400).Acollegedegreeispositivelyassociatedwithwealthwithinrace,butitdoeslittletoaddressthemassivewealthgapacrossrace.Itisnoteworthythata“good”jobisnotthegreatequalizereither.Incomepoorwhitefamilieshavemorewealththanmiddle-incomeblackfamilies($15,000v.$13,800).Andthetypicalwhitefamilywhoseheadisunemployedhasnearlytwicethewealthasthetypicalblackfamilywhoseheadisemployedfull-time–about$23,000versus$12,000.Whilethetypicalblackfamilywhoseheadisunemployedhaszerowealthtotellwiththeirfinancialcalamity(Hamiltonetal.,2014).Inessence,educationisnottheantidotefortheenormousracialgapsinwealthandemployment.NoneofthisisintendedtodiminishthevalueofEducation.Thereisaclearintrinsicvaluetoeducation,alongwithapublicresponsibilitytoexposeeveryonewithahighqualityeducationthatteachesthemtosynthesizeandfuseinformationintobigideaswithencouragingteacherstrainedtodelivercurriculumfromgradeschoolthroughcollege(Hamilton,2014).Anotheroneofourrecentreportsentitled“BootstrapsareforBlackKids”withYunjuNamastheleadauthoraddressthetropethattheblackcommunitiesdevalueseducation(Nametal.,2015).WedocumentusingthePanelStudyofIncomeDynamics(PSID)thatblackparentswithmorelimitedresourcesdisplayagreaterinclinationtoprovidefinancialsupportfortheiradultchildren’seducationthantheirwhitecounterparts–thePSIDqueriedrespondentsastowhethertheyreceivedfinancialsupportfromtheirparentsfortheireducationasanadult.Wefindthatthemedianwealthofblackparentswhodidprovidefinancialsupportfortheirchild’sadulteducationis$25,000,andsubstantiallylessthanthe$74,000valueforwhiteparentswhodidnotprovidefinancialsupport.And,itisonlyabout15percentofthe$168,000medianvalueofthewealthofwhiteparentswhodidprovidefinancialsupportfortheiradultchildren’shighereducation.Receiptoffinancialsupporthasimportantimplicationwithregardstoeducationalattainmentandracialdisparitiesineducationalattainment.Forthewhiterespondents,whodidnotreceiveparentalsupport,about25percentattainedacollegedegreeandeightpercentagraduatedegree.Thisissignificantlyhigherthantheelevenpercentofblackcollegegraduatesandtwopercentofblackgraduateschoolgraduateswhodidnotreceiveparentalsupport.Incontrast,irrespectiveofthetransferamount,thereisnosignificantdifferenceineducationalattainmentbetweenblackandwhiterespondentswhobothreceivedparentalfinancialforhighereducation–abouttwo-thirdsofeachgroupattainedacollegedegreeandalittlemorethanaquarterattainedagraduateschooldegree.Receiptofparentalfinancialsupportforhighereducationisessentiallyassociatedwithclosingtheracialhighereducationattainmentgap.

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Evidencefromsocialscienceresearchconfirmsthatblackstudentsandtheirfamiliesaredoingmorewithlesswhenitcomestoeducationalattainment.ResearchbyeconomistPatrickMason(1997)andsociologistsDaltonConley(1999),andWilliamMangino(2010)demonstratesthatblacksattainmoreyearsofschoolingandcredentialsthanwhitesfromfamilieswithcomparableresources.Clearly,ithasbeenamyththatblackfamiliesdonotvalueeducation,butalsoproblematicisthesocietaloveremphasisontheeconomicreturnstoeducationasthepanaceatoaddresssociallyestablishedstructuralbarriersofracialeconomicinclusion.AnAlternativeApproachfromtheLensofStratificationEconomicsThisdirectlyfollowsfromaneoliberalperspective,wherethefreemarket,aslongasindividualagentsareproperlyincentivized,issupposedtobethesolutiontoallourproblemseconomicorotherwise.ThetranscendenceofBarackObamabecomestheidealsymbolism,andspokespersonofthispoliticalperspective.Hisascendencybecomesanallegoryofhardwork,merit,efficiency,socialmobility,freedomandfairness,individualagency,andpersonalresponsibility.Theneoliberalideologyisnotlimitedtorace.Itmoregenerallyplacestheonusonindividualactions,andleadstodeficiencynarrativesforlowachievementmorebroadly,but,thisisespeciallythecasewhenconsideringraceandotherstigmatizedworkers.Perhapsthegreatestrhetoricalvictoryofthisparadigmisconvincingthemasses,thatimplicitinunfetteredmarketsisthe“AmericanDream.”Thehopethat,evenifyourlotinlifeissubpar,withpatienceandindividualhardwork,youcanturnyourproverbial“ragsintoriches.”TheemergingsubfieldofStratificationEconomicsoffersadifferentinterpretation.Itexpandstheboundariesofhoweconomistsanalyzeintergroupdifferences,andprovidesadifferentapproachtounderstandingitspersistency(Darityetal.,2015;Darity,2005).Itisanapproachthatgoesbeyondindividualoptimizations,andfusesinsightsfrommultiplesocialsciencestoexaminecollectivegroupactionsandprocesses.Stratificationeconomicsincorporatesgroupidentificationandidentityformationfromsociology;self-interestedbehaviorandsubstantiverationalityfromeconomics;and,fromsocialpsychology,anemphasisofsocialbeliefswidelyheldaboutonesgroupandhowaffinitytowardsonesgroupmayimpactindividualproductivityandperformance–particularlyviatheeffectsofcognitivedissonance,implicitbiasandstereotypethreat(Darityetal.,2015).Stratificationeconomicsdiffersfromorthodoxeconomicsinthepresumptionofanirrationalityofdiscriminationstemminglargelyfromtheviewthatgroup-basedidentityisapre-determinedexogenoustrait.Incontrast,stratificationeconomicspresumesarationalityofdiscrimination,thatdiscriminationservesafunctionalroleinmaintainingsocialhierarchyandpromotingtheprivilegedgroup’srelativeclassstatus(Darity,2005).Ironically,itisthispresumptionofrationalitythatbetter-

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ablesstratificationeconomicstoexplainpersistentgroupinequality,andunderstandhowmarketsthemselvesmaybeexploitedtoactuallyreinforceinequality.Raceprejudiceconstitutesadefensivereaction,itisaprotectivemechanism,anditservesthefunctionofpreservingorenhancingtherelativepositionofthedominantgroup.Ultimately,theover-emphasisonindividualoptimizationandtheunder-emphasisongroupformationandcollectiveactionleadsorthodoxeconomiststoaccentuatedifferencesinindividualattributeslikehumancapitalendowment,motivationandattitudesasexplanationsforintergroupdifferences.Stratificationeconomistslookbeyondindividualfactorsandinvestigatestructuralandcontextualfactorsthatpreservetherelativestatusofdominantgroupsviaintergenerationalresourcetransfersandexclusionarypracticestoexplainintergroupdisparity(Darityetal.,2015).Inheritance,bequestsandin-vivotransferaccountformoreoftheracialwealthgapthananyotherbehavioral,demographicorsocioeconomicindicator(seeforexamples,BlauandGraham,1990;MenchikandJianakoplos,1997;GittlemanandWolff,2004).Theintergenerationalracialwealthgapwasstructurallycreatedandhasvirtuallynothingtodowithindividualorracializedchoices.Thesourceofinequalityisstructural,notbehavioral–intra-familytransfersprovidesomeyoungadultswithcapitaltopurchaseawealth-generatingassetlikeahome,anewbusinessoradebt-freecollegeeducationthatwillappreciateoveralifetime.Accesstothis,non-meritbased,seedmoneyisnotbasedonsomeactionorinactiononthepartoftheindividual,butratherthefamilialpositioninwhichtheyareborn(Ajaetal.,2014).Wehaveadvocatedfor“BabyBonds”(i.easubstantialChildTrustAccountProgramthatissetatbirth)toaddresstheenormousracialwealthgap.BabyBondsaredesignedtoprovideanopportunitytopurchaseanappreciatingassetforallnewborns.Theprogramisanalogoustoasocialsecurityprogramthatwouldprovidecapitalfinanceforyoungadultstobeginalifetimeofbuildingassetsandeconomicsecurityindependentofthefinancialpositioninganddecisionmakingofthefamiliesinwhichtheyareborn(HamiltonandDarity,2010).Theprogramwouldbeuniversal,buttheamountoftheaccountwouldbegraduatedonthebasisofthechild’sparentalwealth.WeenvisionendowingAmericannewbornswithanaverageaccountof$20,000thatgradationallyrisesupwardsto$60,000forbabiesbornintothemostwealthpoorfamilies.Theaccountswouldbefederallymanagedandgrowataguaranteedannualinterestrateof1.5–2percent.Theaccountscouldbeaccessedwhenthechildbecomesanadultandusedforasset-enhancingendeavors,suchaspurchasingahomeorstartinganewbusiness,orfinancingadebt-freecollegeeducation.BabyBondscouldbefullyfundedbyamoreequitableallocationofwhatthefederalgovernmentalreadyspendsonassetdevelopment.About$500billionoftheU.S.federalbudgetintheformoftaxsubsidiesandsavingsareusedtopromoteasset-developmentpolicies,withmore

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thanhalfofthebenefitsgoingtothetop5percentofearnersandthebottom60percentofearnersreceivingonlyabout5percent(CFED,2004;Wooetal.,2010).Thebulkofthisallocationcomesfromitemslikemortgageinterestdeductions,exclusionofinvestmentincomeonlifeinsuranceandannuitycontracts,reducedratesoftaxondividendsandlong-termcapitalgains,andexclusionofcapitalgainsatdeath.Iftheexistingfederalasset-promotionbudgetwereallocatedinamoreprogressivemanner,federalpolicieswouldgoalongwaytowardeliminatingracialdisparitiesandbuildinganinclusiveeconomyforallAmericans.Inconclusion,wealthisamajordeterminantofoneslifechanges–improvingaccesstohighereducationhasintrinsicvalue,but,alone,willdolittletoaddressthemassiveracialwealthgap.Despitetheconventionalwisdom,theintergenerationalracialwealthgapwasstructurallycreatedandhaslittletonothingtodowithindividualorracializedbehavior.InordertoliveuptotheAmericanpromiseofeconomicopportunityandupwardmobilityforall,weneedaboldsolutionsuchassubstantialchildtrustaccountthatprovidesseedcapitaltopurchasetheeconomicsecurityofanappreciatingassetforallAmerican.

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ReferencesAja,Alan,DanielBustillo,WilliamDarity,Jr.,andDarrickHamilton.Summer2014.“FromaTangleofPathologytoaRaceFairAmerica”DissentMagazine.pp.38-42.http://www.dissentmagazine.org/article/from-a-tangle-of-pathology-to-a-race-fair-americaAja,Alan,WilliamDarity,Jr.,andDarrickHamilton.November27,2013.“SocialSecurityfortheLife-Cycle”HuffingtonPost:TheBloghttp://www.huffingtonpost.com/alan-a-aja/hey-politicians-how-about_b_4339452.htmlAja,Alan,WilliamDarity,Jr.,andDarrickHamilton.April26,2013.“RefusingAusterityinAmerica--How‘BabyBonds’CouldExpandSocialSecurity”HuffingtonPost:TheBloghttp://www.huffingtonpost.com/alan-a-aja/refusing-austerity-in-ame_b_3163312.htmlAja,Alan,WilliamDarity,Jr.,andDarrickHamilton.January10,2013.“IfNotRace,ThenWealth:WhyUniversitiesShouldAvoidIncomeAsProxyforRace-BasedAdmissionsPolicy”HuffingtonPost:TheBloghttp://www.huffingtonpost.com/alan-a-aja/college-admissions-income_b_2452191.htmlAlexis,Marcus.1971.“SomeNegro-WhiteDifferencesinConsumption.”inTheBlackConsumer,editedbyGeorgeJoyceandNormanA.P.Govoni,257–274.NewYork:RandomHouse.Ash,Carolyn,AlanAja,WilliamDarity,Jr.andDarrickHamilton.InPrintMay18,2015.“WhyMoreAlumni-GivingWon’tSaveHBCUs”AtlantaJournalConstitution–Opinionhttp://getschooled.blog.ajc.com/2015/05/17/as-morehouse-and-spelman-graduate-consider-fate-and-funding-of-hbcus/Bar,Talia,andAsafZussman.2012.“PartisanGrading”AmericanEconomicJournal:AppliedEconomics4(1):30-48Blau,Francine,andJohnGraham.1990.“BlackWhiteDifferencesinWealthandAssetComposition.”QuarterlyJournalofEconomics105(2):321–339.Bocian,DebbieGruenstein,WeiLi,andKeithS.Ernst.June18,2010.“ForeclosuresbyRaceandEthnicity:TheDemographicsofaCrisis”CenterForResponsibleLendingResearchReportBoshara,Ray,WilliamEmmons,andBryanNoeth.February,2015.“TheDemographicsofWealth:HowAge,EducationsandRaceSeparateThriversfromStrugglersinToday’sEconomy”FederalReserveBankofStLouis,EssayNo.1:Race,EthnicityandWealth

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LosAngeles,AsianAmericanStudiesCenter,andtheInsightCenterforCommunity;publishedbyFederalReserveBankofSanFranciscohttps://gallery.mailchimp.com/5203171f50c8aad9305060270/files/FINAL_Color_of_Wealth_Report_March_2016.01.pdfFriedman,Milton.1957.ATheoryoftheConsumptionFunction.Princeton:PrincetonUniversityPress.Galenson,Marjorie.1972.“DoBlacksSaveMore?”AmericanEconomicReview42(March):211–216.Gittleman,Maury,andEdwardN.Wolff.2004.“RacialDifferencesinPatternsofWealthAccumulation,”TheJournalofHumanResources39(1):193-227.Goldrick-Rab,Sara,RobertKelchen,andJasonHoule.September2,2014.“TheColorofStudentDebt:ImplicationsofFederalLoanProgramReformsforBlackStudentsandHistoricallyBlackCollegesandUniversities”DiscussionPaperfromWisconsinHOPELabHamilton,Darrick.November7,2015.“TheFederalJobGuarantee:AStepTowardsRacialJustice”DissentMagazinehttps://www.dissentmagazine.org/online_articles/federal-job-guarantee-racial-justice-darrick-hamilton

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Hamilton,Darrick,andWilliamDarity,Jr.2010.“Can‘BabyBonds’EliminatetheRacialWealthGapinPutativePost-RacialAmerica?”ReviewofBlackPoliticalEconomy,37(3,4):207-216.Hamilton,Darrick,andWilliamDarity,Jr.September/October2009.“Race,Wealth,andIntergenerationalPoverty:Therewillneverbeapost-racialAmericaifthewealthgappersists”TheAmericanProspecthttp://prospect.org/article/race-wealth-and-intergenerational-povertyHardy,BradleyL.2016.“IncomeInstabilityandtheResponseoftheSafetyNet.”AcceptedatContemporaryEconomicPolicyHardy,BradleyL.,andJamesP.Ziliak.2014.“DecomposingRisingIncomeVolatility:The‘WildRide’attheTopandBottom.”EconomicInquiry52(1):459-476Huelsman,Mark.Summer2015.“BetrayersoftheDream:HowSleazyFor-ProfitCollegesDisproportionatelyTargetedBlackStudents,”TheAmericanProspectpp.9-13InstituteonRaceandPoverty,UniversityofMinnesota.2009.“Communitiesincrises:Raceandmortgagelendinginthetwincities”Jones,Janelle,andJohnSchmitt.May2014.“ACollegeDegreeisNoGuarantee”CenterforEconomicandPolicyResearch(CEPR)Katznelson,Ira.2005.WhenAffirmativeActionWasWhite.NewYork:W.W.NortonandCompanyLambert,SusanJ,PeterJ.Fugiel,andJuliaR.Henly.August27,2014.“PrecariousWorkSchedulesamongEarly-CareerEmployeesintheUS:ANationalSnapshot”ResearchbriefissuedbyEINet(EmploymentInstability,FamilyWell-being,andSocialPolicyNetwork)attheUniversityofChicagoMangino,William.2010.“RacetoCollege:the‘ReverseGap’”RaceandSocialProblems2(3):164-178Mason,PatrickL.1997.“Race,culture,andskill:InterracialwagedifferencesamongAfricanAmericans,Latinos,andWhites”ReviewofBlackPoliticalEconomy25(3),5-39Menchik,Paul,andNancyAmmonJianakoplos.1997.“Black-WhiteWealthInequality:IsInheritancetheReason?”EconomicInquiry35(2):428–442.Mordock,Jonathan,andRachelSchneider.October2013.“SpikesandDips:HowIncomeUncertaintyAffectsHouseholds”ResearchBriefofU.S.FinancialDiaries(USFD)Project

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Nam,Yunju,DarrickHamilton,WilliamDarity,Jr.,AnneE.Price.September2015.“BootstrapsareforBlackKids:Race,Wealth,andtheImpactofIntergenerationalTransfersonAdultOutcomes”InsightCenterforCommunityEconomicDevelopmenthttp://www.insightcced.org/wp-content/uploads/2015/07/Bootstraps-are-for-Black-Kids-Sept.pdfOliver,Melvin,andThomasShapiro.2006.BlackWealth/WhiteWealth,2ndEd.NewYork:Routledge.AreportfromPewCharitableTrusts.July2015.“TheComplexStoryofAmericanDebt:Liabilitiesinfamilybalancesheets”Sen,Amartyra(2010).Theideaofjustice.London:PenguinSteinberg,RichardandMarkWilhelm.2005.“Religiousandseculargiving,byraceandethnicity”NewDirectionsforPhilanthropicFundraising2005(48):57-66Tippett,Rebecca,AvisJones-DeWeever,MayaRockeymoore,DarrickHamilton,andWilliamDarity,Jr.2014.“BeyondBroke:WhyClosingtheRacialWealthGapisaPriorityforNationalEconomicSecurity”ReportpreparedbyCenterforGlobalPolicySolutionsandTheResearchNetworkonEthnicandRacialInequalityatDukeUniversityhttp://globalpolicysolutions.org/wp-content/uploads/2014/04/Beyond_Broke_FINAL.pdfWolff,SarahD.June2015.“TheStateofLendinginAmericaanditsImpactonU.S.Households”CenterforResponsibleLendingWoo,Beadsie,IdaRademacher,andJillienMeier.2010.“UpsideDown:The$400BillionFederalAsset-BuildingBudget”Baltimore,MD:AnneE.CaseyFoundation