“Race in itself means nothing. The markers of race -skin color, hair texture, the things that we identify as the racial markers mean absolutely nothing unless they are given social meaning, and unless there’s public policy and actions that act upon those kinds of characteristics.” -Melvin Oliver in the PBS documentary Race: The Power of an Illusion. (It’s good! Watch it!)
Though I am sure if you are reading this you are already socially conscious and therefore understand that no matter how you slice it, whites get the bigger piece of the pie. I am a white girl, and it’s fair to say that for a large majority of my life, in fact even more so in the past 3 years, I have been poor. Really poor. History shows us that no matter however poor I am, I am still better off, financially, than African-Americans, who face a cost just for being born black.
A wealth gap exists -it is not a myth, henceforth policies like Affirmative Action of yesteryear were, and still are, completely necessary. America so institutionalized racism that is it significantly more expensive to be born nonwhite. I wish I could say everything I am going to detail below to every white person that claims whites and blacks are equals…. We aren’t. We should not adopt a colorblind policy and pretend blacks aren‘t facing racism today and still facing the effects of America‘s past institutionalized racism. Allow me (and some incredibly more intelligent authors and mover & changers that I quote):
America has given upsetting social meaning to race. More frightening, though, is the face that public policy developed over time, that further put a wedge between whites and non-whites, based on the invention of race. The aforesaid racial wedge can especially be seen in relation to wealth inequality throughout history, and most recently during the mortgage market meltdown (which we‘re still feeling, people).
Many of the problems with racial inequality, and hence wealth inequality, started to develop before World War II. These problems later snowballed after the war. Immigrants and other non-whites worked the hardest, least paying jobs (it‘s all they could get hired to do). According to The Power of an Illusion (I‘m telling ya, watch it), by 1910, 58% of factory workers and miners (physically grueling, low-paying jobs) were held by immigrants. Non-whites held such jobs because government policy restricted them from finding work elsewhere. The original Social Security program excluded farm workers and domestics, most of whom were minorities. In addition, unions kept blacks, Mexicans, and other non-whites at their low-pay jobs.
The employees of these industrial jobs constructed slums and ghettos in which to live. This type of housing was forced upon non-whites because their jobs paid so little. These
slums showed the differences between racial groups -and scared many whites. This fear is what eventually would drive many whites away from their non-white counterparts.
When soldiers returned home from WWII a demand for housing arose. This need for housing, combined with the fear of living in or near non-white slums was exploited by the government. The Federal Housing Administration changed the criteria under which homes were purchased. Instead of paying 50% of a home price, young soldiers were told they could make a down-payment of merely 10-20% and have the rest of the cost financed over a longtime period -decades, in fact. Young men and their families rushed to get these highly-advertised, modern, tax dollar produced singly family homes. Indeed, black soldiers wanted to move into the new, affordable homes, too -they just weren’t welcome.
The new low-payment mortgages contributed directly to wealth and racial inequality. The FHA feared that allowing blacks to purchase homes in areas with whites might cause the value of the real estate to drop. Hence, all white areas like Levittown were created. Not only were racially singular neighborhoods created, but “redlining” was developed.
The communities kept essentially totally non-white were evaluated for financial risk. Minority neighborhoods were called hazardous and thus “redlined,” further keeping blacks and whites separated. While most whites could get approved for mortgages (and a chance to build equity, the cornerstone for acquiring almost everything in this country), non-whites were not. Undoubtedly, this gap helped to contribute to the “cost of being black” that I mention in the preface. In fact, only 2% of minorities were approved for FHA mortgages.
While the government helped whites get home ownership, blacks were given Public Housing, and the Urban Renewal Program. Displaced minorities and other non-whites were forced to rent housing that would, in no way, contribute to their equity or give tax money to the community in which they lived. Eventually, home ownership possibility did change, seemingly for the better, for minority groups.
The 1968 Fair Housing Act and the 1974 Equal Credit Opportunity Act helped move non-whites into previously exclusively white areas. Alas, it seemed as if whites and blacks were going to coexist in the same areas. Blockbusting proved that would not happen. Real estate agents played into the fear of minorities that many whites had, causing them to sell their homes. For fear of not being able to sell their homes before more blacks moved in, white homeowners sold their property for less than market value. This practice of Blockbusting not only caused tension amongst whites to sell their homes first, but divided blacks and white yet again.
Due to the inability of non-whites to purchase homes through the FHA, and later only due to “white flight” property values in all-black communities were low. These black communities eventually erode, as without home equity, blacks can not provide for themselves and their families in the same way whites inherently can -making life that much harder.
Knowing the history and the correlation between racial inequality and wealth inequality, one can see the racial implications for the contemporary mortgage market meltdown. Some headway for true equality was made when minorities opposed to redlining formed solidarity. This led to the Mortgage Disclosure Act as well as the Community Reinvestment Act. Though these policies seemed as if non-whites would receive credit for home buying, many banks still did not readily provide credit. New types of loans emerged for “redlined” areas.
Subprime and “predatory” loans resulted (subprime loans are characterized by their high fees, penalties, and interest rates, marketed to households that have no other sources of credit). Without credit available to people that they had a chance of paying back, communities and bank accounts crumbled. Households were taking out lines of credit just to meet living expenses, loans they had no way of paying back. The economy, henceforth, crumbled and led us to where we are today (plus about 70 billion other factors that will be spared here).
Tom Shapiro writes in a collective work entitled Rethinking the Color Line (I've read the entire book and love the differing perspectives offered... Buy that ish), “Politicians and the media treat racial inequality as a non-issue…” Obviously, racism is still an enormous issue in our country. Tracing the history of wealth inequality, it is easily seen that it definitely goes hand in hand with America’s history of racial discrimination, and public policy should always reflect that (you know, like, in that little issue of health care, tehehe). So next time you think blacks and whites are equal, just come back and read this little ditty again, it will be here waiting for you.
