As part of the “Race, Power & Money” series presented by the Missouri Historical Society, Melvin L. Oliver n dean of social sciences and professor of Sociology at the University of California, Santa Barbara n spoke Saturday afternoon to a crowd of nearly 100 on the topic “Black Wealth/White Wealth: A New Perspective on Racial Inequality.”
He took the title of his talk from a book co-authored by Thomas Shapiro, which revealed some disturbing trends in the differences of asset accumulation and wealth among blacks and whites, which Oliver summarized to his audience.
In the event of job loss, Oliver noted, “8 out of 10 black households would not have enough financial assets to allow them to live on poverty level resources for 3 months or less.”
“We’ve seen for the past forty years the ratio of black to white income go from .58 to .62,” Oliver said. “That means black families earn about 58 cents to 62 cents for every dollar that white families earn.”
“Income is a flow and wealth is a stock,” Dr. Oliver, said explaining the difference between income and wealth.
“You get income once a week or once a month. It flows in your pocket and out of your pocket. Wealth is a stock. You don’t spend it. You save it, and then you plan in a very rational way how you use it.”
To further illustrate the difference, Oliver drew a comparison between himself and his white colleagues at the university where he teaches. Although they have similar incomes, he said, their standards of living are drastically different.
“When it comes to assets and wealth, my family did not accumulate assets and wealth, therefore they did not pass those to me,” Oliver said.
“My colleagues come from a history where their families accumulated assets and wealth, and they passed that to their children. My colleagues and I face a very different set of opportunities as a consequence.”
“Black Wealth/White Wealth” explored the historical and racial reasons why black wealth lags behind that of whites. The racialization of state policy, an economic detour away from entrepreneurship and the sedimentation of racial inequality, according to Oliver, all have worked against the accumulation of black wealth.
“Most of this did not come about because of the natural workings of the market. It came about because of the state-structured ways that advantaged some people to create assets and disadvantaged others,” Oliver explained.
Successful entrepreneurship is a way of accruing financial assets to pass on to the next generation. Historically, however, successful blacks in many areas have been punished or even killed and their businesses destroyed.
Oliver referenced the 1921 Tulsa, Oklahoma race riot that destroyed a string of black-owned businesses on Greenwood Avenue, called “Black Wall Street.” Similar riots destroyed many black-owned businesses across the country, and the resulting fear among many African Americans helps to explain why blacks have the lowest rate of entrepreneurship among ethnic groups in the U.S.
“Within the black population in 2002, about 27 percent of all African Americans owned no financial assets that they could immediately use to cushion themselves against economic downturns,” he said. “This is compared to 6.3 percent of whites.”
As bleak as these figures seem, there has been improvement in some areas.
“There are some African Americans who are doing quite well,” Oliver said, citing a growth in the number of African-American college graduates and increased access to jobs.
“Yes, we still have a lot of blacks at the bottom, but we have a lot more blacks in the middle class,” Oliver said. “This black middle class portends a great future.”
Oliver said being proactive about personal finances and becoming a homeowner are ways blacks can begin to accumulate wealth and secure a better economic future for themselves and their children.
“Housing is probably the key asset. Most research shows that if you want to do one thing, you want to own a house and then you use that as a basis to generate more wealth,” he said.
“As much as I can analyze a situation, the answer will only come from the praxis of people doing it,” Dr. Oliver said.
