The issue is that you can game wealth, you can't game skin color. (or at least, few have tried! [0]) If you can get job or university positions on the basis of household wealth I think we may see increasing abuse of this system.

Beyond that, affirmative action attacks a real issue which is a low level of racism, which is unintentional, not malicious, but exists in the form of bigotry that has real effects.

This has been studied quite a bit. For example, teachers who are told who the top students are in the class at the start of the year and told that they're predicted to do the best, end up being affected by this. Because at the end of the year, these very students have the best outcomes. Makes sense you'd think, until you hear that the choice of the students at the beginning was totally random. Similarly, studies show that students who are told they'll do great, actually do better than those who're told the opposite.

The combination of these facts, with the fact that teachers perceive minorities as being less able (again, not intentionally, a teacher won't say or even think a student is less able because he's e.g. black, but when perceptions are studied it is what, on average, shows up in the numbers), given teachers negatively affect students who they perceive as less able or low-opportunity, and the fact students respond to this, creates issues.

And similar things happen in the workplace, too, when applying for say a job, or indeed across society. I remember a German on hackernews a year ago who wrote a script to apply to housing via mass email with auto-generated profiles. He sent thousands of them. A guy named Hanz got a virtually 100% response rate. A guy with an arab name 1%.

In such cases, affirmative action can help. It doesn't matter how poor or rich you are. Hypothetically, a rich, educated, hard-working arab would face mostly the same issue, and a poor guy with no ambition or work ethic named Hanz would not. Affirmative action attacks the inherent discrimination based on ethnicity in that process, affirmative action based on wealth would not.

Affirmative action based on ethnicity is imperfect in obvious ways, of course. But I think it better targets the issue better and can't be gamed or manipulated as easily.

Of course there are obvious ways to use household wealth to affect policy and they're very common. For example here in the Netherlands you can get free healthcare, full coverage, if you earn little. You get deep subsidies for housing. If you're young and your parents can't afford recreational stuff (whether it's karate or playing violin) the government allocates to your child roughly the entire amount of what these things would cost. Education is de facto free, but if your parents earn little (i.e. can't support you financially), then you get an extra $250 or so per month, and an extra $500 or so if you don't live at home anymore, as a stipend. (after all, if you study full time, you can't work full-time. So this will help cover part of the bills. And again, tuition is already covered. To lower barriers to education and make it accessible to all, equal financing is important). If you're a single parent with children, this amount is drastically increased, specifically for the possibility to study. All of these things mean that kids aren't ostracised based on wealth and class (as much). Kids whose parents aren't rich can actually participate in sports, recreation and culture to a large extent. Kids whose parents are poor can go to top universities. They get full health care coverage and support with housing. All of these things mean that if you're poor, you're not immediately relegated to a social circle of poor people, and you're not forced (financially) into making short-term decisions (like going to work straight out of highschool because bills need to be paid), and room exists to plan for the long-term (like spending years in uni).

This does wonders for social mobility of minorities, which leads to better outcomes, a stronger workforce which is less dependent and generates more tax revenues, which means the generous social welfare system isn't leaned on as much as a meagre one which keeps people locked into it. Not to mention all kinds of social cohesion benefits, between classes as well as ethnicities.

It's far from perfect but it seems like the right approach. Affirmative action alone is no solution, not without a system that helps minorities create similar outcomes like the one described. Without that, disadvantaged minorities (and indeed poor majorities, e.g. white people in the US) can't make transformational gains between ages of 1 and 22, end up actually less capable than the ethnic/socioeconomic majority, and this creates resistance to policies like affirmative action and perpetuates the problem, and importantly also doesn't solve the issue of social mobility issues for the poor people in the majority population either.

[0] http://www.vice.com/read/everything-we-know-so-far-about-the...