Black Wealth, White Wealth: A New Perspective on Racial Inequality.

Black Wealth, White Wealth: A New Perspective on Racial Inequality, by Melvin L. Oliver and Thomas M. Shapiro. New York and Great Britain: Routledge, 1995. 242 pp. $22.95, cloth. Reviewed by Rodney D. Green, Department of Economics, Howard University. Black Wealth, White Wealth opens with an evocative racial comparison of income and wealth which reveals that although half of the top 10 earners in the U.S. are Black, virtually no Blacks are included among the wealthiest 400 Americans. Indeed, the wealth levels for those Blacks who have "made it" into the American middle class are shown to be only 15% of the wealth level of Whites in the same income category. These and other presented data suggest that if Blacks are disadvantaged relative to Whites in terms of income-and they are, earning on average less than 60% of White household incomethen they are completely eclipsed when it comes to wealth. This tale of two middle classes is part of an even bleaker tale of two unequal nations within America, a tale Oliver and Shapiro attribute to three historical processes: the racialization of state policy, the economic detour, and the sedimentation of racial inequality. These three concepts reflect, respectively, how government policy has systematically reduced Black capacity to accumulate wealth by historically limiting access to land, housing, and other wealth builders; how Blacks have been prevented from forming thriving businesses because of institutional barriers to their serving the entire domestic market, leaving Blacks in impoverished niche businesses; and how the cumulative effects of Black oppression have cemented Blacks to the bottom of society's economic hierarchy. The story begins in chapter one, in which the authors revisit Reconstruction's failure to provide the freedmen with elementary productive property-the proverbial 40 acres and a mule. They move next to a review of the Federal Housing Administration's role in deliberately blocking Black home ownership from the 1930s through the 1970s, followed by a contemporary account of how redlining and mortgage discrimination have deepened Black economic deprivation. They also review the ways in which macroeconomic forces such as globalization and deindustrialization have undermined Black economic wellbeing. For example, they point out that these forces have eliminated over half of the Black industrial jobs in the Great Lakes area in the last two decades. In chapter two, Oliver and Shapiro sketch a sociology of race and wealth in America, wrestling (perhaps too briefly) with the race/class debate and invoking Marx and Weber. With this backdrop, they offer additional historical and anecdotal evidence for the three historical processes noted above. Chapter three presents a discussion of the data constraints past researchers have experienced in attempting to study wealth distribution in the U.S. The authors surmount such difficulties themselves by using the relatively new Survey of Income and Program Participation (SIPP) data set to measure individual net worth (all wealth) and net financial assets (net worth minus housing equity and automobile value) as they artfully describe the trend of deepening economic inequality between the races since the 1980s. This theme is extended further in chapter four, in which two startling findings are highlighted: (a) though Black income has consistently hovered at around 60% of White income, Black wealth is only one-twelfth of White wealth; and (b) Black financial assets are, at the median, zero! Oliver and Shapiro go on to note that a large share of each race has no financial assets, and even larger shares of both races could not sustain lives even at poverty level for more than a few months if they lost their current income. The absolute wealth differences mentioned above conceal an even graver problem detailed in chapter five. Most Black wealth is shown to consist of home equity and automobile ownership while a substantial share of White wealth is shown to include financial assets, the key to wealth accumulation. …