Lately, critics of the racialized maldistribution of wealth have seized on the notion of a “racial wealth gap” as a defining feature of the American political economy—and insisted that this gap has been a key factor in the radically disparate economic impact of the present Covid-19 recession across our racial divide. Yet the racial wealth gap is not the single-bullet explanation of uneven economic development in black and white America that adherents of the thesis imagine it to be. This becomes clear when we shift the focus of discussion from wealth—the real and investment property that has always been a profound drag on black economic achievement—to income, where progress, while far from robust, has nonetheless been striking. What’s more, the lags in income distribution between black and white American families are key precursors to the cross-generational disparities in racial property-holding tracked under the rubric of the wealth gap. (A similar point can be made about the racial disparities in housing, which I’ll discuss in a future column.)
It’s vital to note, first of all, that longer-term trends in income inequality underscore how important social wage policies that reduce overall inequality have been in addressing racial inequality. Between 1968 and 2016, African Americans, largely as a result of the victories of the civil rights movement and anti-discrimination enforcement, made significant advances into occupations and job categories that had previously kept black workers at the margins of mainstream success—when they admitted them at all. However, the reason that African Americans’ income remains all but unchanged as a percentage of whites’ income since 1968—57 percent in 1968, 56 percent in 2016—is that the gains that African Americans have made in employment and wages have been offset by intensifying income inequality in the country as a whole.
A 2018 study found that during this same 48-year span, African American median family income realized relative gains in the overall national income distribution. In 1968, black median family income ranked in the 25th centile of the national income distribution; this meant that the income of black families fell within this bottom quadrant of American families. In 2016, median black family income had moved up to the 35th centile, meaning that black median income fell slightly ahead of the bottom third of the national income distribution. A substantial gap in racial income rank remained, but it had closed significantly; the African American rank in the national income distribution had increased by 40 percent since 1968. Meanwhile, white median family income moved only from the 54th centile in 1968 to the 57th centile in 2016. Therefore, the rank gap in median family income between blacks and whites closed by 28 percent. Nevertheless, median African American income remained virtually unchanged as a percentage of median white income overall.