unequal measures of inequality

My most recent blog entry related to how the manner in which knowledge is produced within the university system is subject to a set of assumptions and methodologies. This became quite evident in this example drawn from my first class in Professor Lamas’ Community Economic Development.*

In looking at these statistics relating to income, taken from the U.S. Census Bureau, what would you conclude about equality in America?

Income of Households 2002

Race/Ethnicity	Income
White alone or in combination	$45,350
White alone	$45,390
White alone, not Hispanic	$47,194
Black alone or in combination	$30,032
Black alone	$29,982

Now take a look at these statistics concerning wealth in America, now what would you conclude?
Median Value of Assets for Households 2000

Race	Net Worth
White	$58,716
White Not of Hispanic Origin	$67,000
Black	$6,166

Percent Distribution of Household Net Worth 2000

Race	Net Worth
	Zero or Negative	$500,000 and Over
White	12.7%	9.3%
White Not of Hispanic Origin	11.3%	10.0%
Black	29.1%	0.6%

In the first case, inequality America is significant but is not of an outrageous proportion. However, looking at wealth, this picture is dramatically different. The median wealth of a white American household is over 10 times that of a black household. Furthermore, three times as many blacks than whites have zero or negative net worth.

The poverty debate both in America and around the world has been framed around the question of income (what one earns) rather than wealth (what one owns less what one owes). Two professors can both earn the same amount each year, but their lives may look very different depending on the inheritance they may or may not have received from their parents.

Because the poverty problem is framed in terms of income, the policy solutions suggested are also directed towards raising income. Our grand solutions to poverty in America seemed centered around raising minimum wages and providing better education (so that people can receive higher paying jobs). But if we were to think of the problem differently, how would our solutions change?

Interestingly enough, the major wealth-based solution to poverty has not been particularly successful. Home ownership has often been promoted as a way of increasing wealth and gaining economic success. However, this has played out into the context of income segregated neighbourhoods, disparate quality of education in public schools, and foreclosures. Home ownership has not created additional wealth especially in cases of stagnant or declining real estate prices or growing costs of maintaining a home.

I'm sure there will be more to follow on this subject.


*In fact, this entire entry is drawn from the discussion in today’s class. I guess you know it’s a good class if I come home and immediately write a blog entry.