Corporations are Just as Responsible for Closing the Economic Divide as Government
By: Dylan Hughes
Tags: Race, Racial Justice, Economics, Finance, Business

With a contentious election soon to be behind us and a new commander in chief likely to be placed into office, Black Americans and other minorities may have hope for police and prison reform among improvements in other areas that disproportionately impact their communities.

One area that likely won’t be improved upon by a new administration is the economic divide between whites and minorities — a.k.a. economic inequality.

Poverty in America has remained relatively unchanged since 1970. The poverty rate has increased 14 times and decreased 17 times since then — with economic recessions causing the jumps, according to the United States Census Bureau.

Coming off of the Great Recession in the late 2000s, the poverty rate had dropped down to 12.3% in 2017. In 2019, it dropped down to 10.5% — making it five-straight years of declines.

In the midst of another recession, the poverty rate will surely increase in 2020, though we won’t know the data until sometime in 2021.

Before knowing those numbers, though, we can still look at the past five years — which showed declines in poverty across all races.

There are a couple of ways to look at these results. If you are inclined to not give President Donald Trump credit for bringing people out of poverty and want to attribute it to other factors, that’s probably correct. Trump has largely operated within the status quo that has developed in America, establishing relatively minor policy changes that do little to even the playing field and close the class divide.

An American economy will hum under almost any president, no matter the party. Both Democratic and Republican leaders have seen great gains (and losses) in GDP growth. Both parties have also seen success in creating jobs.

Unemployment rates among Blacks and Hispanics also fall or rise at a relatively similar rate no matter who is in office.

That is the sad truth of it: while politicians will go out of their way claiming to fight for struggling minorities, the likelihood is that they won’t do more than their predecessors. That’s not to say a future president can’t get the job done at a quicker pace, but history tells us the numbers won’t change drastically no matter who is in charge.

The American economic system — which is less capitalist than you may think, by the way — is sold as a powerful machine that can change anyone’s life if they are willing to participate. This is true on some levels, but unfairly forgets the poor and blames the less fortunate for being in the hole they were born into.

Minorities aren’t the only people living in poverty; whites make up the largest representation of the poor community by number. This is how it should be, however, as whites make up the largest representation of people in the United States.

In terms of percentages, 9.1% of whites are in poverty. Nearly 19% of Blacks and 16% of Hispanics are impoverished, meanwhile.

The easiest way out of poverty is to attain a job that pays well. To get most of those jobs, you need education. That’s where the impoverished get lost: most inner-city schools struggle to set kids up for success. Funded by the poor families in the district, money is stretched thin and kids don’t get the same schooling available in the wealthier surrounding counties.

From The Atlantic:

Students frequently had substitutes because so many teachers got frustrated and left, they didn’t have as much time to spend on computer projects because they had to share computers, and they were suspended more frequently in the poor district, she said; in the wealthier area, teachers and guidance counselors would have time to work with misbehaving students rather than expelling them right away.

Poor students have little chance of keeping up with their richer counterparts in the suburbs. To escape these communities filled with violence and general uncertainty, post-secondary schooling, or a decent-paying job after earning a high school diploma, is the key. But the lack of funding slims the odds drastically.

Nationally, high-poverty districts spend 15.6 percent less per student than low-poverty districts do, according to U.S. Department of Education. Lower spending can irreparably damage a child’s future, especially for kids from poor families. A 20 percent increase in per-pupil spending a year for poor children can lead to an additional year of completed education, 25 percent higher earnings, and a 20-percentage point reduction in the incidence of poverty in adulthood, according to a paper from the National Bureau of Economic Research.

Giving students in poor communities equal funding to students in rich communities is the best place to start for closing the racial economic divide in America. There are issues minorities face, however, that go beyond the government’s control.