I didn’t make any claims one way or another about the creation of the racial wealth gap because we’re discussing the persistence of the wealth gap as a function of alleged current systemic racism, not how it started historically. If you need me to break it down for you, you can ask. There’s no reason for you to double and triple down on embarrassing false accusations that suggest you don’t understand the difference between the study’s acknowledgment of the creation of the current wealth gap (initial factors) versus its inquiry into the the causal factors in the gap’s continued existence (current factors).
From the study:
The current racial wealth gap is the consequence of many decades of racial inequality that imposed barriers to wealth accumulation either through explicit prohibition during slavery or unequal treatment after emancipation. Examples of postemancipation barriers include legally mandated segregation in schools and housing, discrimination in the labor market, and redlining, which reduced access to capital in black neighborhoods.
And while the existence of a racial wealth gap may not be altogether surprising, it may be surprising how little the racial wealth gap has changed over the past half century, even after the passage of civil rights legislation. In fact, the 2016 wealth gap is roughly the same as it was in 1962, two years before the passage of the Civil Rights Act of 1964, according to data from the Survey of Consumer Finances (SCF)
Notwithstanding your accusations, nothing about the above commentary on historical factors in the wealth gap contradicts anything I’ve said or supports your argument that the persistence of the wealth gap is caused by housing discrimination, especially since the historical factors mentioned are illegal and have been for decades, as I said. That’s the whole point of the study: to examine the persistence of the racial wealth gap despite the absence of these historical barriers.
The wealth gap might simply be the result of a historical wealth gap that was so large it hasn’t yet had time to close. As we have seen from the 1962 data, black households were much poorer than white households at that time. Even if all racial discrimination had ended in the 1960s, these wealth differences would not have disappeared instantly. Wealth takes time to accumulate. However, it is possible that other factors have kept the wealth levels of blacks and whites from converging, and researchers have investigated the influence of several of these. Specifically, the possible obstacles to wealth equalization that have been studied are savings rates, inheritances, rates of return on investments, and income. If blacks and whites differ on any of these dimensions, it could explain the persistence of the wealth gap.
In the absence of historical barriers like redlining, is it still causing the current wealth gap to persist as you claim?
While portfolio differences are real and impactful, these data suggest that portfolio differences are not the most significant factor contributing to the racial wealth gap. Gittleman and Wolff estimate that over 1984–1994 the wealth gap would have closed by only an additional 4 percentage points if black households had held the same portfolios as white households.
You initially tried to dismiss this as “quibbling over percentages” which is a curious thing to say about a study you simultaneously claim supports your argument and contradicts mine. But it isn’t quibbling nor does it say that housing discrimination is causing the wealth gap to persist. On the contrary, it specifically says here even as late as the 90s, if black households had the same portfolios as white households - including real estate - almost the entire wealth gap would still exist.
Originally Posted by
Legio_Italica
Thus, as I said, If you want to argue against the study’s conclusions and insist homeownership is the primary driver of the current racial wealth gap (estimated to account for around 5%), you’d still have to do more than misconstrue sources to evidence that. Afterwards, you can work on demonstrating the causal role of current systemic racism in some significant portion of the other 95%.
From the study:
What do we mean when we say that the labor income gap can account for the racial wealth gap? First, our model predicts that income and wealth will have a relationship in the future like the one we observe today. Our model predicts that, starting from 1962, it would take 259 years for the ratio of black and white mean wealth to reach 0.90.
Second, changing the labor income gap in the model changes the wealth gap dramatically. For example, when we remove the labor income gap in our model, meaning black and white households immediately earn the same income from their labor from 1962 onward, the black-to-white wealth ratio reaches 90 percent by 2007.
Third, other factors we might have suspected as playing major roles in maintaining the racial wealth gap pale in comparison to the role of the labor income gap. For example, when our model makes predictions under a gap in returns to investment as large as the gap in labor income, we find little change. The same is true for equalizing the inheritance process.
https://www.clevelandfed.org/newsroo...ealth-gap.aspx
So, controlling for differences in asset portfolios, which would include the causal variable you chose, redlining, the wealth gap closes by around 5%, like I said before. Controlling for labor income, parsed separately here from real estate holdings, the wealth gap closes by 90%. This means, not only have I not contradicted the study, but for your claims about redlining and the wealth gap to be accurate, you would need to either refute this study’s findings, or find an alternative explanation of your own to substantiate your argument.