The July 2006 Edition of Street Spirit

A publication of the American Friends Service Committee

 
 

National AFSC AFSC Economic Justice BOSS Website

 

 

In this issue:

Corruption at Oakland Housing Authority

Shot Through the Heart in S.F.

Legal Challenge to Cruel Attacks on SF Homeless

GRIP's Shelter in Richmond

HUD Plans to Demolish Public Housing in New Orleans

Fresno Homeless Attacked

Stonewalling by Bush's ICH on Homeless Issues

Are We Not Our Brother's Keeper

Congress Refuses to Raise the Minimum Wage

Beyond Prisons: Challenge to the Prison System

Penal Servitude

The U.S. Racial Wealth Gap

Poor Working Conditions for Immigrants

AFSC Sues Defense Dept. for Surveillance

Surveillance and Orwell's 1984

Enron's Good Fight

Poor Leonard's Almanack: On Self-Realization

July Poetry of the Streets

Child Slavery on African Cocoa Farms

The Worth of Education in the Phillipines


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April 2005

March 2005

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Street Spirit is published by American Friends Service Committee.

All works are copyrighted by the authors.

The views expressed in Street Spirit are those of the individual authors alone, and not necessarily that of the American Friends Service Committee.

The Creation of the U.S. Racial Wealth Gap

by Meizhu Lui, United for a Fair Economy

At a workshop held on June 21 at St. Mary's Center in Oakland, Meizhu Lui (left), demonstrates racial disparities in wealth. Out of 10 available chairs, a rich man got 7 chairs, and 9 people had to crowd into the 3 remaining. Lydia Gans photo

Forty years after Civil Rights legislation was passed prohibiting discrimination and providing affirmative opportunities for education and jobs, the common wisdom is that the race question has been more than solved. If people of color are still doing less well than whites, well then, they must not be willing to work hard enough. It must be their own fault.

It's a fact that people of color are still not equal. An African American still makes only 59 cents to the white person's dollar. But the level of inequality is even more shocking if we look at wealth. If you lined up all white families by the amount of assets they owned minus their debts, and then looked at the family in the middle, that family in 2004 had a net worth of $140,700. The median African American family had only $20,600, or 15 cents to the white family's dollar. Latinos have even less: The median Latino family in 2004 had only $18,600 in assets.

Escalators and treadmills

Why is wealth important? The American dream is not one of subsistence, making enough income to make ends meet. The dream is of economic security so you have enough of a cushion to live through medical emergencies or lay-offs, enough to retire some day, enough to pass along a little head start to your children. As we look at racial economic inequality, wealth is what matters the most.

We can't understand the current economic gaps without looking back into the past, because wealth accumulates over generations. While income is like a snapshot, wealth is like a movie. What we find is that government policies created an escalator of asset boosts for white families, while keeping people of color on a subsistence treadmill. Different methods and rationales were used for the subordination of people of color, but in every case, the underlying assumption has been of European superiority.

Native Americans: In the U.S. Government's 'Trust'

Indian tribal peoples consider land as collective wealth. It is the source of all life, to be treasured, stewarded, and used to perpetuate all forms of life for the next seven generations. Unfortunately, that concept of common use and stewardship would clash mightily with the European capitalist idea that parcels of land should be owned by individuals and used to generate private, short-term profit.

As European immigration increased in the United States after the American Revolution, the settlers increasingly coveted Indian land. In 1830, the Indian Removal Act was signed, and it became official policy to force tribal people further and further west, finally relegating them to areas "reserved" for them - usually the most barren tracts.

The Indians' last large territory, the Great Plains, became a government gift to whites. After financing the Indian wars, the government in the Homestead Act of 1862 gave away millions of acres to homesteaders who received 160 acres of land for nothing.

General William Tecumseh Sherman, wrote: "The more [Indians] we can kill this year, the less will have to be killed the next year, for the more I see of these Indians, the more convinced I am that they all have to be killed or be maintained as a species of paupers."

The legal relationship of the U.S. government to the tribes became defined as one of "trust responsibility" for the Native nations, similar to the relationship of a legal guardian to a child. In exchange for land, the government was to provide for the needs of the Native peoples, and to manage the reservation land in the best interests of the tribes.

The "trust" responsibilities were constantly broken; in fact, the way the wealth of the Indians was managed did indeed provide for them only to the level of a species of paupers. This theft at gunpoint of Native land and natural resource wealth played a foundational role in the creation of the U.S. economy. Not even counting the theft of land, it is estimated that through that mismanagement alone, the tribes were bilked out of 28 billion dollars.

African Americans: Owned in a White Ownership Society

African Americans were involuntary immigrants, and arrived as assets stacked in the holds of ships, to be tallied in the financial records of their new owners. They could be bought and sold. Women created more wealth for their owners in the form of children. They had no rights even over their own bodies, and they worked without receiving any wages. Enslaved people and their labor became the basis for the creation of the wealth of plantation owners, people who owned and operated slave ships, and companies that insured them.

At the end of the Civil War, there was an opportunity to give blacks a running start at financial independence. In the first few years, the Union army actually began to distribute land to newly freed slaves -- "40 acres and a mule."

But after only seven years, in a political sell-out to Southern politicians, the overwhelming majority of land was returned to its former Confederate owners. Unable to gain a foothold as self-employed farmers, African Americans were forced to accept sharecropping arrangements. While sharecroppers kept some part of the fruits of their labor as in-kind income, the system kept them perpetually in debt and unable to accumulate any assets.

In every period after that, blacks were left out of government-sponsored programs that gave economic boosts to whites. After the Depression, African Americans were excluded from the new economic security programs under the New Deal. For example, Social Security guaranteed wages for retired workers. However, domestic work and agricultural work -- the two main occupations of blacks -- were left out of the program.

Following World War II, the GI Bill of Rights was a major investment of tax dollars to build a middle class. GIs received low-interest home mortgages and free college educations, two keys to family wealth-building. But black GIs were turned away from the vast majority of colleges and banks that, at that time, refused to do business with African Americans.

The U.S. government failed to insure that all of the men who sacrificed equally in World War II also received equal post-war benefits.

Freedom without a boost from the government, and without government protection, made it extremely difficult for African Americans to make their own hard work pay. It is estimated that if wages had been paid instead of keeping them in slavery, there would be $1.4 trillion dollars circulating in the black communities today.

Latinos: In the U.S. backyard

Concerns over the place of the U.S. in the global economy have determined the fate of Latinos outside and inside U.S. borders since the beginning of U.S. history. At the time of the American Revolution, Spain was the largest colonial landowner on the American continent. Mexico won its independence from Spain in 1821.

Three years later, the Monroe Doctrine promised the newly independent nations of Latin America "protection" from interference by European powers. In reality, this doctrine allowed the United States to intervene in the affairs of the entire hemisphere to protect its own economic interests. In 1848, the United States went to war against Mexico to gain more territory and continue fulfilling its "manifest destiny" -- its God-given right -- to expand "from sea to shining sea."

Mexico lost the war and was forced to accept the Treaty of Guadalupe Hidalgo, which gave the United States half of Mexico's land. While individual Mexican landowners were at first assured that they would maintain ownership, the United States did not keep that promise. Unlike Mexican practices, racial categories were used to determine who could obtain land, and land wealth passed to Anglo hands.

In the 20th century, government policy continued to reinforce a wealth gap between Mexicans and whites. During World War II, when U.S. farms needed more agricultural workers, the federal government established the Bracero program, under which Mexican workers were brought into the United States to work for sub-minimum wages and few benefits, then kicked out when their labor was no longer needed.

Trade and immigration policies are still being used to maintain U.S. control over the natural and human resources in its "back yard," and at the same time to deny those it is "protecting" from enjoying the benefits to be found in papa's "front yard."

Asian Americans: Perpetual Foreigners

Asians, unlike the other groups, came to the United States mostly as voluntary immigrants like Europeans, trying to better their economic status. But Asians have never been seen as material out of which "real" Americans can be made, because they do not meet the standard of "whiteness."

The Naturalization Act of 1790 limited eligibility for citizenship to "whites." Asians did not know if they were white or not -- but they wanted to be! The rights and benefits of citizenship were obvious. But one by one, the Chinese, Japanese, and people from India filed federal suits to be counted as white, but lost at the Supreme Court. Without citizenship, a series of laws limited the right of Asians to create wealth. Chinese immigrants were drawn into the Gold Rush. The Foreign Miners Tax, however, was designed to push them out of the mining industry, and there was no protection from theft of their land claims. The tax provided 25 percent of California's annual state budget in the 1860s.

The Chinese Exclusion Acts passed in 1882 denied new Chinese immigration and made the Chinese the first nationality to be denied the right to join this immigrant nation; Europeans continued to pour in.

Japanese workers were recruited to fill agricultural jobs, and many were able to strike out on their own. But the Alien Land Act prohibited non-citizens from owning land, or from forming corporations. Japanese Americans found other ways to create wealth, including the cut flower business. In 1941, they had $140 million of business wealth.

World War II would change all that. In 1942, the Roosevelt administration forced Japanese Americans, foreign-born and citizen alike, to relocate to internment camps as potential traitors. They had a week to dispose of their assets. Most had to sell their homes and businesses to whites at fire sale prices. In 1988, a successful suit for reparations gave the survivors of the camps $20,000 each, a mere fraction of the wealth that was lost.

Today, Asians are the group that as a whole has moved closest to economic parity with whites. However, as Wen Ho Lee, the Chinese-American nuclear scientist who was falsely accused of espionage in 2002, found out, Asians are still defined by race and branded as perpetual foreigners, not "real" Americans.

The story of wealth creation in the United States shows that the government created an escalator for white families. The added ingredient to hard work that speeds economic mobility is government assistance; in every period of history, land give-aways and publicly funded subsidies have assisted white families in getting ahead.

Each racialized group has been kept on a treadmill, as the government has barred them from programs open to whites, and made laws that prevented their efforts to use their hard work to build wealth for themselves and their descendants. If hard work alone accounted for economic success, the descendants of enslaved people would be the wealthiest Americans today.

The good news is that, as a nation, we know how to lift people into the middle class. When we use our government to invest in its people at the base, as we did during the New Deal or after World War II, our economy grows. Now, it is time for all of us to work on new asset building policies, to close the racial gap, and to bring the American dream into reach for all whose ancestors have contributed to creating the nation's wealth.

Meizhu Lui, executive director at United for a Fair Economy, co-authored UFE's new book, The Color of Wealth: The Story Behind the US Racial Wealth Divide (New Press).


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