Class 10: October 31, 2015

Readings• Chapter 10, Race and

Racisms• Charles, Camille

Zubrinsky. "The dynamics of racial residential segregation." Annual review of sociology (2003): 167-207.

Class Goals

• Be able to describe the extent of wealth inequality in the United States.

• Develop an understanding of the historical reasons for housing and wealth inequalities in the United States.

• Develop an understanding of how residential segregation emerged.

• Develop an understanding of the factors that perpetuate and exacerbate wealth inequality today.

Wealth and hard work• The typical white family

has about ten times the amount of wealth as the typical non-white family.

• Most people who are well-off believe their success is due to their hard work.

• Does working hard ensure you will be wealthy?

“If wealth were the inevitable result of hard work…, every woman in Africa would be a millionaire.” George Monbiot.

Wealth Inequality in the United States

Median net worth, by race

In 2009, white families had 20 times the wealth of black families.

Class Goals

• Be able to describe the extent of wealth inequality in the United States.

• Develop an understanding of the historical reasons for housing and wealth inequalities in the United States.

• Develop an understanding of how residential segregation emerged.

• Develop an understanding of the factors that perpetuate and exacerbate wealth inequality today.

What are some historical reasons for wealth inequalities?

• Slavery: How is this related?– What happened when slavery was over?

• Housing: How is this related?– Between 1933 and 1978, the U.S. government

enabled over 35 million families to increase their wealth through housing equity through government subsidies, policy changes, and tax incentives. Who benefited?

Home equity is largest source of wealth

Class Goals

• Be able to describe the extent of wealth inequality in the United States.

• Develop an understanding of the historical reasons for housing and wealth inequalities in the United States.

• Develop an understanding of how residential segregation emerged.

• Develop an understanding of the factors that perpetuate and exacerbate wealth inequality today.

Residential Segregation

• Residential segregation emerged in the 1930s due to:– Collective racial violence. Why?– The real estate industry: Racially restrictive

covenants and steering. Why?– Federal housing programs. Why

The 1938 Underwriting Manual of the FHA stated : “if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes.”

•

Black/white segregation is the highest.

• Dissimilarity index: percentage of individuals who would have to move to achieve integration. – In 2000, the black/white dissimilarity index was 67.

It was 80 in Detroit and 76 in Chicago.• Isolation index: difference between

representation in the city and in a neighborhood.– The typical black person lives in a neighborhood that

is 45 percent black.

Why is segregation problematic?

• High levels of segregation mean that black and Latino families are more likely to live in poor neighborhoods.

• Middle class black families have fewer opportunities to build wealth in housing equity.

– 70% of whites own homes, compared to less than half of blacks and Latinos.

– Median home equity for whites: $80,000. For blacks, it is $52,882 and for Latinos: $60,000.

Class Goals

• Be able to describe the extent of wealth inequality in the United States.

• Develop an understanding of the historical reasons for housing and wealth inequalities in the United States.

• Develop an understanding of how residential segregation emerged.

• Develop an understanding of the factors that perpetuate and exacerbate wealth inequality today.

How is wealth inequality perpetuated today?

• Restrictive covenants and discriminatory lending are illegal.

• Why does wealth inequality persist? Why has it increased?

• The wealth gap between whites and blacks tripled between 1984 and 2009.

How do we explain the black/white wealth gap?

18% of mortgages blacks and Latinos have are subprime.

• Subprime: High interest loans with unfavorable conditions.

• Predatory lenders: Payday lenders, pawnshops, check cashing services. Where do we see those?

Weekly Question

• Explain the extent to which residential segregation exists and is harmful to black and Latino families. Discuss one of the studies examined by Charles (2003) with regard to whites’ versus blacks’ preferences for integrated neighborhoods. Evaluate the extent to which individual prejudice versus structural racism plays a role in perpetuating residential segregation.