INDIVIDUALIZING POST-CIVIL RIGHTS RACIAL INEQUALITY

An individual-level explanation of racial inequality is plausible because fewer Whites express bigoted attitudes since the successful abolition of the state-sponsored racial oppression of Jim Crow, and, in addition to other signs of Black economic success, there is palpable evidence of a growing Black middle class. In this context, the political elites and writers who have elaborated the new orthodoxy on race and racial inequality make several claims. They deny that racial discrimination is a serious problem today, insisting that the economic divide between Whites and Blacks is exaggerated. They also maintain that White Americans are receptive to demands for racial equality and to the idea that racial gaps in income and poverty cannot be explained by White racism.¹

While the sentiments contained in this new orthodoxy originated in a small number of conservative think tanks, they migrated first to portions of the academy and then to the public. A wide cross section of White Americans—Republicans and Democrats, conservatives and liberals, young and old—are receptive to this new assemblage of beliefs about race and racial inequality, partly because it reinforces deeply held cultural values about hard work, opportunity, and self-reliance (McClosky and Zaller, 1984, pp. 86–94; Shklar 1991, pp. 62–101).³

The new orthodoxy represents a major change in the way Americans think about race and racial inequality. Instead of locating the main causes of racial inequality in a historical-structural, state-based account, it looks for them in the willful actions of self-interested and self-motivated individuals on either side of the color line. In this view, race in the post-civil rights era is a problem of individual (mis)behavior.

This explanation for racial inequality is rooted in three core assumptions. First, it assumes that individual prejudiced acts are the primary cause of racial inequality. Thus, the thinking is, as prejudice diminishes, so will the racial gaps in economic well-being. Prejudice in this account does not refer exclusively to crude bigotry. Some writers focus on negative judgments based on subtler, even more or less “accepted” stereotypes—for example, the idea that African Americans are lazy or prone to violence. Glenn Loury (2002), for example, argues that stigmatization, not discrimination, perpetuates racial inequality. In his view, people act (rationally) based on limited information and condensed assumptions about the behavior of individuals. He suggests that these hardened stereotypes induce the behavior depicted by the stereotype and lead to stigmatization—he names it a “spoiled collective identity”—which persists even though outright expressions of prejudice are currently rare.⁴

Second, it assumes that discrimination is not a powerful determinant of Black economic success in competitive labor markets because rational employers will effectively sort out productivity differences among workers. Purportedly, discrimination has a short life-span because employers would have to pay White workers higher wages if they acted on their prejudices and discriminated against Black workers. In other words, victims of discrimination would always have access to jobs since some employers would refuse to act on their prejudices and hire Black workers at a lower wage. Moreover, since presumably employers efficiently sort out the competent from the incompetent, investments in human capital are rewarded. Thus, studies of labor market discrimination assume that differences in income or occupational status reflect real differences in individual human capital. Once differences in education and job skills are removed, they argue, any remaining differences in wages or occupational status are the result of “discrimination,” suggesting that Black economic advancement over time is due largely to educational gains.

Finally, the emerging orthodoxy assumes that, once legal barriers have come down and racial prejudice disappears, any remaining racial gaps in income, poverty, or occupation that remain stem from African Americans' or Latinos' individual choices about work, leisure, residence, marriage, and law-abiding behavior. But this does not necessarily mean that racial inequality will disappear simply because Jim Crow laws are abolished, anti-discrimination laws are enforced, and prejudiced attitudes decline. Instead, the assumption is that people will climb or fall off the ladder of economic success depending on their individual effort, qualifications, and self-discipline. Economic mobility is obviously tied to individual motivation and choices: the fate of individuals rests squarely on their own shoulders. Focusing on the individual, while ignoring the historical economic and social context, enables proponents of the new orthodoxy to dismiss statistics ordinarily interpreted as evidence of racial inequality, explaining them instead as a reflection of an individual's choice to stay in school or not, to work hard or not, to get married rather than give birth to a child out of wedlock, or to use drugs or not. The assumption is that these choices reflect deeply ingrained cultural values that will change slowly over time as Blacks overcome a “development gap.” Tamar Jacoby (1998, pp. 9, 539–540) refers to this as “acculturation.” In the post-civil rights era, the notion that Blacks are the “cultural architects of their own disadvantage,” as Lawrence Bobo and Ryan A. Smith (1998, p. 212) pungently put it, is “free market racism.”

Empirical studies of labor markets provide the strongest evidence for the idea that racial inequality—continued racial gaps in income, wages, and occupational status—is produced by a relationship between declining discrimination and Black failure. Many analysts think that labor market discrimination is a matter of history, and thus civil rights laws are an anachronism. Labor market discrimination disappears, in this view, because of the sharp decline in prejudiced attitudes over the last fifty years and strong enforcement of civil rights laws, notably the employment discrimination provisions of the 1964 Civil Rights Act. Because intentional discrimination has more or less disappeared, or at least greatly diminished, any contemporary gaps in employment, wages, or occupation, according to this view, are the result of African Americans' failure to acquire the necessary cognitive skills and work habits to compete in labor markets. What appears to be racial inequality, according to adherents to the new understanding of race, really reflects entrepreneurs hiring and rewarding skilled workers. James Heckman sums up the conclusion of many proponents when he says that “the goal of achieving black economic progress is better served by policies that promote skill formation, like improving family environments, schools and neighborhoods [rather than] strengthening the content and enforcement of civil rights laws—the solution to the problem of an earlier era” (Heckman 1998, pp. 101–102). The solution, in other words, lies in restoring human capital. Lyndon Johnson could not have said it any better.

Similarly, some writers insist that the persistence of residential segregation in major metropolitan centers results from African Americans' decisions to live with other African Americans. Thus, ethnic group loyalty, not White racism, is the main cause of segregated neighborhoods (Thernstrom and Thernstrom, 1997, pp. 219–230). In fact, the Thernstroms argue that residential segregation has diminished greatly in major city centers largely because Whites have changed their attitudes and are now willing to live in proximity to Black families.⁵

THE FALLACIES OF AN INDIVIDUAL-LEVEL EXPLANATION

The new conventional wisdom regards racism as a remnant from the past, for most individual Whites, with rare exceptions, no longer express openly bigoted attitudes or racial hatred in opinion polls. The evidence invoked for this understanding of race indicates that its proponents are using a historically specific concept of racism, which assumes that it is intentional, crude, explicitly supremacist, and typically expressed as individual bias (Wellman 1993). Even though this narrow concept of racism has been discredited, it remains salient to a broad cross section of White Americans and deflects attention from the underlying causes of White advantage and Black disadvantage in the post-civil rights era (Bobo 2000, p. 159). But the most pernicious, intractable cases of racial inequality cannot be explained by Whites' biased attitudes or by Blacks' dysfunctional behavior. Focusing exclusively upon the specific intentions and choices of individuals regarding racial discrimination cannot account for the emergence and persistence of racial inequalities in the United States. There are three reasons for this.

First, there are significant racial disparities that cannot be reduced to White racial bias or so-called Black irresponsibility. A dramatic example is the well-documented disparity between Blacks and Whites in access to health care and in the treatment of serious diseases. The National Cancer Institute (NCI) recently reported that cancer death rates are increasing much faster for Blacks than for Whites, sometimes by as much as 20 to 100 times. Even though the incidence of breast cancer is lower among Black women, they are more likely to die of the disease than White women. Moreover, according to the NCI Director, “Black men have a cancer-death rate about 44 percent higher than that for white men” (Gornick et al., 2001; McBarnette 1996, pp. 51–52). These discrepancies result from differential access to screening, prevention, and treatment. One of the chief reasons Black women are more likely to die of breast cancer is that they are not diagnosed until the disease has reached an advanced and more lethal stage (Yood et al., 1999).⁶

There are also significant differences in access to sophisticated diagnostic and treatment procedures for coronary heart disease, strokes, and related ailments after controlling for age and other medical conditions (Oddone et al., 1999, pp. 1350, 1353–1354). Ironically, amputation of a lower limb is the one advanced procedure that Blacks receive more often than Whites. African Americans are more likely to have such “last resort” procedures because of inadequate treatment of hypertension and diabetes—illnesses that reflect inadequate care and treatment (Gornick et al., 1996; Gornick et al., 2001, p. 138). These disparities persist even when access to treatment is identical, as it is for Medicare recipients, or when income is controlled. In other words, race is the major explanation for these differences in treatment, but not racial prejudice pure and simple or intentional discrimination.

Professional and collegiate sports provide another example of why individual-based explanations for racial inequality are inadequate. Executives in modern professional sports rarely express blatant and crude expressions of individual prejudice. Moreover, it is unlikely that anyone would accuse Black or Latino athletes of failing to realize their full potential. In fact, a study of lifetime pitching and batting averages by sports sociologists at Northeastern University shows that Black players have to out-hit and out-pitch their White counterparts by substantial margins in order to win and keep their jobs. Mere journeymen can have long and profitable careers as long as they are White, but, among African Americans, only exceptional players will succeed (Staples 1998). Sports are the one arena where one can find unambiguous measures of merit—a baseball player can both hit and catch, or he cannot. Nonetheless, one finds a deep and persistent discrepancy in the proportion of Black and White coaches in the athletic industry, despite an abundance of talented Black athletes and assistant coaches.

It may be somewhat difficult to find Black medieval historians; it is not difficult to find Black coaches. There is a large pool of potential Black coaches for professional football and baseball franchises, which includes many former star players and highly experienced assistant coaches (Brown et al., 2003, pp. 49–50). Yet in 2001, 66% of head coaches in the National Basketball Association were White in a league where almost 80% of the players were Black. Similarly, in the National Football League, where 66% of the players were Black, 90% of the head coaches were White. The situation was not much different in college sports, where about 80% of head basketball coaches of Division I-A teams were White and 93% of head football coaches were White, despite the fact that African American men make up well over half of all college basketball and football players (Lapchick and Matthews, 2001). There may be other explanations for some of these discrepancies, but it is hard to maintain that race has nothing to do with them. This case, like that of health care, is worth pondering precisely because it is difficult either to blame Blacks or to discern blatant racism in them.

Individual-level explanations of racial inequality are inadequate for a second reason. Studies of labor market discrimination usually assume that an individual's educational qualifications and skills are not related to discrimination. But as any survey of education reveals, the allocation of educational resources in the United States is by no means race neutral. One indication of this comes from a recent study of students' performance on the California High School Exit Examination. Schools from which less than 70% of students in the class of 2006 passed the English Language Arts and Math tests were significantly more likely to be overcrowded, to lack fully credentialed teachers, particularly in math classes, and to be classified as substandard schools eligible for state relief under California law. 60% of these “low pass rate schools” were segregated—more than 90% of the students were non-White—compared to 2% of “high pass rate schools.” It is estimated that about 30% of Black and Latino students have not passed the test and therefore will not be allowed to graduate (Rogers et al., 2005). As this example indicates, a credible explanation of durable racial inequality must therefore abandon the artificial distinction between discrimination within markets and a pre-market realm in which discrimination, if it exists, is irrelevant to a person's capacities and experiences.

Third, one cannot ignore the legacy of past discrimination and oppression—how the dead hand of the racist past chokes those living in the present. Racial inequalities accumulate over generations, exploding any distinction between the effects of past and present racism. The best illustration of cumulative racial inequalities is found in recent work on racial imbalance in the distribution of wealth. Melvin Oliver and Thomas Shapiro (1997) argue that the large differences between Black and White wealth represent the “sedimentation” of racial inequality: the residue of Jim Crow, labor market discrimination, and federal housing policies.

There is no reason to assume that individuals are the only appropriate unit of analysis. This approach, as Ruth Milkman and Eleanor Townsley (1994, p. 611) explain, “fails to capture the depth with which gender [or racial] discrimination and the norms associated with it are embedded in the economic order—in fact, they are embedded so deeply that a willful act of discrimination is not really necessary to maintain gender [or racial] inequality.” A more fruitful perspective sees race as a relationship between groups, with durable racial inequality as a system of power and exclusion in which Whites accumulate advantages at the expense of Blacks and Latinos. In this view, individual choice in the form of intentional racism has little to do with the persistence of racial inequality.

THE THEORY OF RACIAL ACCUMULATION AND DISACCUMULATION

A SHORT HISTORY OF RACIAL LABOR MARKET COMPETITION

Black and White workers alike gained from the robust economic growth between 1940 and 1970; both also experienced stagnant or declining wages after that point. But neither the gains nor the pain of economic change have been randomly distributed. Despite the ups and downs of the economy over the last sixty years, Black wages have lagged behind White wages, and all Black men, regardless of their education, social class, or job skills, have experienced more unemployment than White men. Even when Black workers made substantial economic gains, Whites did better. Between 1947 and 1959, the absolute median income gap between Black and White workers grew from about $7,000 to about $11,500. It remained there until the economic boom of the 1990s.

How Black economic progress can coexist with widening racial inequality is explained not by prejudice or character flaws, but by changes in the structure of labor market competition. African Americans made enormous economic gains at two crucial moments in recent history, when they shifted from one sector of the economy to another. In both cases, these shifts were aided by tight labor markets and government intervention, which diminished the power of racial labor market competition. But White control of labor markets limited Black gains, and each transition was followed by intensified competition that undercut the efforts of Black workers to move up the economic ladder.

The first shift occurred in the 1940s, when southern Black sharecroppers left the fields for northern industry. World War II's tight labor markets and pressure by New Dealers, fueled by a threatened protest march, cracked open blue-collar jobs that had been closed to Black workers. As they moved into unskilled jobs in factories, Black workers scored wage gains but confronted job ceilings and segregated seniority lists. Few Blacks made it into the ranks of skilled workers, particularly in the South, where 48% of all Blacks working in manufacturing were employed. They made up just 3% of all skilled craftsmen in the auto industry; there were only twelve Black craftsmen in southern auto plants (Northrup 1970, pp. 93, 404–405, 448). Black educational gains, the cornerstone of labor market discrimination theory, did not always translate into wage or occupational gains, an indication of rigid job ceilings and competition with White workers. Educated Blacks experienced higher rates of unemployment compared to similarly educated White workers. By comparison, poorly educated Black workers' unemployment rates were almost equal to lower-skilled White workers. Although Black workers made some inroads into White-collar occupations at the time, White workers garnered more of these jobs and, as a result, the occupational gap widened (Brown et al., 2003, pp. 70–73).

African Americans broke open the door to professional, managerial, and skilled blue-collar jobs in the 1960s, the second key change in the structure of labor market competition. Again, tight labor markets and government policies drove this change. Fundamental to this second change in labor markets was the entry of Blacks into the growing number of public sector jobs, mainly in state and local educational institutions and social welfare agencies. Over one-half of Black male college graduates and three-fifths of Black female college graduates worked in the public sector by 1970 (Carnoy 1994, pp. 162–165). Federal affirmative action policies were the driving force behind wage and occupational gains in the private sector. These policies were responsible for desegregating workplaces and equalizing wages in the South (Heckman 1990, pp. 242–246). And they contributed to Black employment gains in the private sector. Jonathan Leonard (1984, p. 151) has concluded that Black employment grew faster than White employment in firms with federal contracts during the 1970s. He estimates that about 7% of Black employment gains in manufacturing and one-third of occupational gains were due to federal affirmative action policies. It is clear that antidiscrimination policies altered the terrain of racial labor market competition. Whites did not lose out, however. Rather, federal policies shifted the demand for Black workers, relative to Whites, and consequently growth in White employment lagged slightly behind that of Blacks (Leonard 1990, pp. 50–51). Both educated middle-class and unskilled low-income Black workers, it should be noted, shared these employment and occupational gains.

Beginning in the 1980s, the structure of labor market competition reversed as manufacturers eliminated skilled blue-collar jobs and moved factories overseas while the Reagan administration rolled back affirmative action policies. In the intensified labor market competition of the decade, Black workers lost ground while White workers gained. Black unemployment increased relative to Whites' and the wage gains of the 1970s were eroded. This was especially true of college-educated Black workers, whose median wages dropped from 80% of White wages to 72%, and who were three times as likely to be unemployed as college-educated White workers. Many low-income Black workers lost the blue-collar jobs they acquired in the 1970s and moved into low-paying service-sector jobs. Low-income White workers were similarly affected, but they were more likely to land in better-paying White-collar jobs. Martin Carnoy's (1994, pp. 95–99) meticulous study of 1980s labor markets found that the proportion of Black and Latino workers in low-paying jobs increased dramatically, while their proportion in high-paying jobs dropped. And after the Reagan administration put the brakes on federal affirmative action policies, the gains made by Black workers in the 1970s evaporated in firms with federal contracts; it no longer made a difference whether Black workers were employed by contractors or non-contractors.

This short history of racial labor market competition belies any notion that labor market discrimination is simply a matter of prejudiced employers treating equally qualified workers differently. Neither the gains nor the losses experienced by Black workers can be explained by their success or failure in getting educated or acquiring necessary job skills. Indeed, at key points—the 1950s and the 1980s—educated Black workers lost out to Whites. A better explanation for these changes is opportunity hoarding. Whites gained relative to Blacks because they were able to rig labor markets in advance and control access by segregating seniority lists, defining required credentials, and otherwise limiting the access of Black workers.

Opportunity hoarding in labor markets has had cumulative effects, embedding racial inequality into the economy. The Black workers who were victimized by segregated seniority lists in pre-civil rights manufacturing firms became chronically unemployed by the 1970s. In the South, Herbert Northrup pointed out, Black workers lost their jobs when the “jobs in which Negroes were concentrated were eliminated and the displaced Negroes were not permitted to bid into or to exercise their seniority in all-white departments” (Northrup 1970, p. 418). The automation of northern industries had similar consequences for Black workers (Sugrue 1996, p. 144).

THE COLOR LINE IN THE WELFARE STATE

White control of labor markets is only one part of the story of how racial inequality became embedded in the economy. The cumulative effects of opportunity hoarding were reinforced by public policy decisions beginning with the New Deal; these policies augmented Whites' labor market advantages and compounded Blacks' disadvantages. Although it is true that African Americans and other racial minorities benefited from the New Deal and the Great Society, federal social policy also did as much to reinforce racial hierarchies as it did to promote racial equality. One should not assume that federal policies benefited only Blacks and Latinos or were color-blind. White Americans received more from the New Deal than a measure of economic security; federal social policies laid the foundation for the creation of the post-World War II middle class. And many of these same policies excluded Blacks or severely restricted their future opportunities.

When the Depression ended, most Whites were living in poverty; almost two-thirds of them lived below the poverty line. In contrast, 93% of Black families lived in poverty. During the American postwar economic boom, poverty rates dropped precipitously for both groups. But the poverty gap between Blacks and Whites actually widened, growing from 1.44 in 1939 to 4.07 in 1973 when the boom was over. By the late twentieth century, Blacks were still three times as likely to be in poverty as non-Hispanic Whites, even though they made enormous income gains as a result of the civil rights movement. The median Black family income more than doubled between 1960 and 2001, narrowing the relative income gap between Black and White families. Over the same period, however, the absolute median income gap grew by 55%, and Whites' net worth increased dramatically while Blacks' net worth stagnated.⁸

In this regard, veterans' and housing policies were decisive. The G.I. Bill was a powerful vehicle of upward mobility for White working-class men. The postwar readjustment allowances enabled them to move from working-class jobs to skilled blue-collar jobs, managerial positions, and into the professions. Almost one-third of those veterans who received a readjustment allowance landed a professional or managerial position. Indeed, by the 1950s, veterans had higher incomes, better housing, and more wealth than non-veterans. Black veterans, however, got the short end of the stick in the G.I. Bill sweepstakes. Rampant labor market discrimination meant that Black veterans' educational benefits rarely translated into good jobs. This was most apparent in the South, where almost two-thirds of African Americans lived. Southerners received a disproportionate share of veterans' benefits, but returning Black soldiers, who made up one-third of all southern veterans, got little out of these programs. Blacks were shunted into low-wage, low-skill jobs regardless of their education or skills, while southern White veterans walked away with professional jobs. As a consequence, Black veterans' incomes lagged substantially behind those of White veterans (Brown et al., 2003, pp. 75–77).

Housing subsidies and benefits added to these occupational advantages, as Whites, it is well known, were the main recipients of subsidized veterans' mortgages and federally guaranteed home loans. Together the Federal Housing Administration (FHA) and the Veterans Administration (VA) funded over one-third of all mortgages between 1945 and 1960, fueling White families' exodus to the suburbs. Blacks received just 3% of FHA and VA loans, which made up 30% of all Black mortgages. Whites depended far more on federally subsidized and guaranteed loans: the FHA or the VA underwrote 42% of Whites' mortgages. This disparity was produced by FHA rules that redlined Black neighborhoods and allocated federal mortgage money to White suburbs. Moreover, those Black families fortunate enough to receive an FHA or VA loan, could only use it to buy segregated housing. Things did not change much even when federal housing policy was aimed at Blacks in the 1960s. Blacks got more FHA loans, but mainly to purchase or rehabilitate homes located in rigidly segregated neighborhoods. Many of the new housing policies enacted by Congress during the 1960s preserved ghetto walls instead of dismantling them (Brown 1999, p. 286; Quadagno 1994, pp. 104–115).

Federal housing policy was only one tool among many that propped up segregation. Southerners, in particular, used federal funds to build segregated hospitals, schools, and other facilities. Until 1964, many federal grant programs explicitly allowed distribution of federal funds to “separate but equal” facilities. By the time these stipulations were declared unconstitutional, southerners had managed to build eighty-nine segregated medical complexes that provided southern Whites with the best medical facilities the federal government could buy. Meanwhile, African Americans did without. In the North, businessmen teamed up with state and local politicians to build their own version of racial apartheid in big cities. Local politicians latched on to public housing as a way to move Black residents from prime downtown properties slated for “renewal.” Because Whites violently resisted integration, most public housing was built in Black neighborhoods, often on abandoned industrial sites. Segregation deepened in northern cities as a result and the consequences were predictable (Brown et al., 2003, pp. 78–79, 92–93; Hirsch 1983).

These policies produced cumulative results, which augmented White incomes while simultaneously disinvesting in inner-city communities. This is a prime example of how disaccumulation reversed Black economic progress and sustained racial inequality. Veterans programs and federal housing policies insured that Whites would accumulate wealth or substantial housing equity, if nothing else. A government survey investigating fraud in veterans' pensions discovered that the net worth of one-fifth of the men receiving a non-service-connected pension exceeded $10,000, no minor sum in the 1950s (Brown 1999, pp. 182–183). At the same time, income and wealth was sucked out of Black neighborhoods in big cities. Private investors followed the lead of the FHA and withdrew mortgage money from federally redlined neighborhoods. Douglas Massey and Nancy Denton comment that “the lack of loan capital flowing into minority areas made it impossible for owners to sell their homes, leading to steep declines in property values and a pattern of disrepair, deterioration, vacancy, and abandonment” (Massey and Denton, 1993, p. 55). Employers moved jobs out of these neighborhoods, and doctors and hospitals, important inner-city employers, followed Whites to the suburbs during the 1960s and 1970s. Hospital closings and relocations were concentrated mainly in Black neighborhoods (Smith 1999, p. 176).

White workers and their families are also better protected than Blacks or Latinos by the safety net of unemployment assistance and social transfers when the economy turns sour or when people fall on hard times. Even though Black workers of all ages and educational levels are two to three times more likely to be unemployed than White workers, they are less likely to receive unemployment insurance. In 1996, for example, only 23% of the Black unemployed received unemployment benefits, compared to 38% of unemployed White workers. Moreover, federal income transfers do more to lift Whites out of poverty than to help Blacks, which is another reason why the racial poverty gap has gone more or less unchanged. These transfers reduce Black poverty by about one-third while reducing it for Whites by one-half (Brown et al., 2003, pp. 98–100). Black and Latino workers are also far more likely to not have health insurance—between 2001 and 2003, an average 20% of Blacks and 33% of Latinos did not have health insurance coverage of any kind for the full year. In contrast, only 11% of non-Hispanic Whites were without health insurance during the same period (U.S. Census Bureau 2004, p. 18, Table 6).

These disparities in benefits reflect the extent to which racial stratification is embedded in the U.S. welfare state. They represent a pattern in which people of color disproportionately receive limited means-tested benefits or are excluded altogether. Whites, on the other hand, are more likely to receive inclusive, better-paying social insurance benefits. This racially skewed distribution of social welfare benefits originated in two key provisions of the 1935 Social Security Act. First, most Black workers were initially excluded from the New Deal's social insurance programs when Congress excluded agricultural and domestic workers. This provision became less important when African American workers shifted from agriculture to manufacturing employment during the war, although Black women, most of whom worked as domestics, were statutorily excluded from unemployment compensation until the late 1960s. Consequently, welfare was typically their only alternative to severe poverty.

More detrimental to Black workers, however, are the wage-related eligibility requirements of social insurance, an apparently race-neutral provision. The architects of New Deal social insurance programs installed wage-related eligibility to reward long-term stable employment and exclude intermittently employed workers, whom they regarded as “malingerers.” What they really did, however, was penalize the victims of labor market discrimination. Because Black workers receive lower wages relative to White workers and experience more frequent and longer spells of unemployment, Black workers are not only disproportionately excluded from social insurance, but they also receive lower benefit payments. For example, social security payments to Black workers are just 68% of payments to White workers, partly, we think, because of wage discrimination. In short, the wage-related eligibility provisions of social insurance reproduce the results of labor market discrimination in the welfare state (Brown et al., 2003, p. 99; Lieberman 1998, chapter 5).

As this historical narrative suggests, federal social policies have combined with White control of labor markets to promote White accumulation of economic advantages while contributing to Black disaccumulation through segregation and disinvestment. One can see the net effects of these social and political processes by comparing White wealth to Black poverty. Wealth, not just income, is vital. Dalton Conley (1999) has shown that wealth translates into educational and labor market advantages, and allows people to ride out troubled economic times. Differences in college graduation rates between Black and White students, for example, can be traced directly to differences in home equity. Wealth is also crucial for parents' ability to pass on occupational status (Conley 1999, pp. 72–73; Oliver and Shapiro, 1997, pp. 162–163).

White families have amassed substantially more wealth than African Americans, mainly because of their access to high-wage, high-status jobs, and to governmental policies that aided home ownership. White median net worth is ten times that of Blacks. Whites from all income quintiles, even those at the bottom of the income distribution, have a higher net worth than African Americans. In 2000, for example, the median net worth of White families in the bottom income quintile was $24,000; the median net worth of African American families in that income bracket was $57. On balance, African Americans possess fewer financial assets than Whites, and those assets are, on average, one-third the value of White financial assets. The major asset owned by Blacks is their home, which accounts for 61% of their net worth. For Whites, however, home equity is just 31% of their net worth (U.S. Census Bureau 2003, pp. 14–15, Tables H and I). But here is the rub: the median value of Whites' home equity is more than one and one-half times that of Blacks' home equity. The wages of discrimination and the legacy of two generations of federal housing policy are readily apparent in these figures. Even though Blacks made gains in home ownership in the 1990s, they gained very little wealth. Between 1995 and 2000 Whites' net worth rose by 62%, but Blacks' net worth increased by just 6% (U.S. Census Bureau 2001a, p. 3, Tables G, H, and I; Oliver and Shapiro, 1997, p. 106).

Because Whites get a greater share of their income from salaries, and can rely on accumulated wealth, they have a wider array of economic opportunities. Even poor Whites have options that elude poor Blacks. In this respect, African Americans, including middle-class Blacks, face a very different set of economic choices. The same policies that contributed to the accumulation of White wealth also facilitated segregation and encouraged public and private disinvestment in Black communities, both of which destroyed jobs and businesses and curtailed public services. As a result, public investment in inner cities has been stagnant or decreasing for most of the last thirty years, leaving many poor African Americans with few real economic opportunities other than low-wage jobs and, until recently, cash transfers. Given the long-run effects of accumulation and disaccumulation, it is not surprising that fewer Blacks are upwardly mobile than Whites. Tom Hertz's (2005) meticulous statistical analysis reveals a substantial mobility gap between Blacks and Whites. He reports that 17% of all Whites born into families in the bottom 10% of the income distribution failed to move up the economic ladder. Among Blacks, however, 42% of those at the bottom remained there (Hertz 2005, p. 164). The theory of accumulation and disaccumulation likely explains the origin of this mobility gap.

While Whites can rely on accumulated wealth to ride out economic trouble, Blacks must turn to federal transfer payments. Federal means-tested cash transfers like welfare and food stamps may do less than social insurance to lift people out of poverty, but for the Black poor they are a life preserver. Although these transfers do little to offset the enormous racial imbalance in salary income and wealth, they do raise the median income of African American households from 68% to 72% of Whites' median income (U.S. Census Bureau 2001b, p. 15, Table H).⁹

THE FAILURE OF EQUALITY OF OPPORTUNITY

African Americans look at the last forty years of American history with a profound sense of disillusionment. A large majority believes that racial equality is a pipe dream that will not be attained in their lifetime. Many White Americans, on the other hand, think that Blacks have already achieved a large measure of equality, and if they have not, it is their own fault. Most Whites do not see racial inequality; they see “welfare mothers” or “affirmative action babies”—a generation of African Americans who “with the connivance of government … take what they have not earned” (Kinder and Mendelberg, 2000, p. 61). As our analysis indicates, however, it is not possible to account for durable racial inequality in terms of individual behavior, whether it be raw bigotry or Black irresponsibility. Focusing exclusively on individuals obscures the real causes of durable racial inequality and makes it possible for White Americans to sincerely believe that their economic successes have nothing to do with their race; that whatever they achieved, they earned by dint of individual effort. The focus on individuals, which lies at the heart of the new racial orthodoxy, hides one of America's most profound historical secrets: the advantages that Whites gained through control of labor markets and federal social policies that favored Whites were possible because they never competed on a level playing field. Durable racial inequality for Blacks and Latinos is the price paid for the accumulated economic advantages of White America.

Our analysis raises questions about the viability of the extant conception of equality of opportunity. After the civil rights revolution, most White Americans assumed that equality of opportunity policies would single-handedly undo the legacy of slavery and Jim Crow. But Lyndon Johnson's Great Society linked anti-discrimination laws with individual rehabilitation—the acquisition of job and educational skills—to remedy Black oppression. Thus this notion of equality of opportunity does not engage the harsh realities of durable racial inequality. Greater investments in K–12 schooling or other forms of human capital do not deal with the historically accumulated causes of racial subordination and inequality. The problem is not whether the victims of discrimination can be made fit for labor markets. Rather, it is whether the “comprehensive nature of discrimination … portends exclusion of an entire racial/ethnic group from this nation's future” (Darity 1996, p. 113).

The Great Society's conception of equality of opportunity, which derives from the New Deal, is flawed. When New Dealers first advanced the idea of equality of opportunity to justify public policies in the 1930s, they initially assumed that equality of opportunity depended on changing the balance of power between the weak and the strong, and providing individuals with a measure of social justice. This justification changed, however, with the creation of the rural relief policies of the Resettlement Administration and the Farm Security Administration. These policies were calculated to take “the landless, homeless, cashless farmer,” as Aubrey Williams, a prominent New Dealer, described the policy, and “set him up with the nucleus of a self-perpetuating subsistence” (Williams 1934). This justification for New Deal rural relief policies replaced “antiprivilege egalitarianism” with the notion of “rehabilitation.” When Roosevelt yoked equality of opportunity to rural rehabilitation, the policy no longer justified an assault on privilege. Instead, the focus was on uplifting poor Black and White sharecroppers.

A similar ideological transformation occurred in the 1960s. The civil rights movement instigated and led the assault on Whites' Jim Crow privileges, inspiring demands for inclusion and equality of opportunity among many citizens—for not only African Americans, but also Latinos, women, gays, and the disabled. Yet the Great Society proposed to address the legacy of slavery and Jim Crow by turning Black migrants into self-sufficient workers with educational and job training programs. Although conventional wisdom is that Lyndon Johnson's Howard University speech defined the distinction between equality of opportunity and equality of results, he said nothing more than that equality of opportunity depended on policies that would rehabilitate the victims of Jim Crow. Instead of severing any link between equality of opportunity and rehabilitation, Johnson integrated the two ideas into a policy agenda.

We do not doubt that policies designed to increase education and job skills are needed today, just as they were needed in the 1960s. But, standing alone, rehabilitation is not equality of opportunity. Disconnected from antiprivilege egalitarianism, rehabilitation ignores the structural-historical obstacles to equality of opportunity policy.¹⁰

There is another problem. The idea of rehabilitation assumes that African Americans and Latinos are in a subordinated position because of individual inadequacies rather than systemic racial subordination and exclusion. This understanding of equality of opportunity equates race with deficiency. Thus, the failure of the Great Society is attributed to the failure of individual African Americans, Latinos, or poor women, not to political or policy failures. The idea that “each [person] should have equal rights and opportunities to develop his own talents and virtues” judges those who do not succeed harshly, especially when those opportunities derive from public generosity (Schaar 1981, p. 193). The seductiveness of the idea that persistent racial inequality is located primarily in the individual failure of African Americans is due in large part, we think, to Whites' belief that Africans Americans have failed to take advantage of the equality of opportunity provided by civil rights legislation. As a result, the core American value of individualism has become racialized—Whites' antipathy to Blacks or to color-conscious policies is now justified through the language of individualism.¹¹

The rehabilitation framework does not successfully engage or challenge durable racial inequality. Thus, if equality of opportunity policies are to have a significant impact on reducing racial inequality in the twenty-first century, the idea of rehabilitation must be dropped and the original attack on privilege reasserted.