INTRO TEXT
“Asset inequality” is a major reason why African-Americans continue to lag behind white Americans in terms of homeownership and education, agreed several speakers at the latest CommonWealth forum, though there was less agreement on the causes and cures of this condition. “With a Little Help From Our Friends (and Families): Assets, Race, and Social Mobility,” was held on May 14 at the Omni Parker House Hotel in Boston. Robert Keough, editor of CommonWealth, moderated the forum. “We think about mobility as a way to get to wealth,” said Keough, but we don’t always appreciate “what an obstacle to mobility a lack of assets can be.”
Thomas Shapiro, author of The Hidden Cost of Being African American: How Wealth Perpetuates Inequality (see “To Have and Have Not,” CW, Spring 2004), opened the discussion by arguing that “Wealth is a major axis along which racial inequality is passed on in the United States.”
He noted that getting financial help at critical stages of life, like buying a home or paying for college, has implications for social advancement. “That is a good part of the notion I call transformative assets,” said Shapiro. The vast difference in inherited wealth between white Americans and African-Americans “needs to be on the civil rights agenda in the 21st century,” Shapiro said.
But Stephan Thernstrom, a history professor at Harvard University and co-author of America in Black and White: One Nation, Indivisible, warned that any attempt to “eliminate any correlation between parental resources and the success of their children” would be extremely unpopular. “The immigrant saga is one of intergenerational social mobility,” he said. “Helping children do better in life is fundamental to the American story.” Thernstrom said that it would be better to address the differences in family stability between the white and African-American communities: “One group is made up predominantly of two-parent, two-paycheck families and one dominated by single parents. You would expect significant disparities [in wealth].”
The importance of homeownership was affirmed by Robert Cooper, senior counsel at OneUnited Bank, the largest interstate bank in the US owned by African-Americans. “[The home] is the single most important investment by a family, especially African-American families. It can be used as collateral to start a business, for education, or retirement.” Cooper noted that “blacks are twice as likely as whites to be rejected for mortgages, even when adjusted for income.”
Kathleen McDermott, executive director of the Montachusett Opportunity Council, talked about the positive effects that only a few thousand dollars in assets can generate. The council, an antipoverty community action agency serving the Fitchburg and Leominster area, uses federal grants and other funds to match low-income families’ contributions to individual development accounts, awarding $4,000 for a family’s savings of $1,333 to buy a home, start a business, or pay for further education. “We see increased self-confidence and self-esteem and more of a feeling of control over their lives,” she said of program participants. “It is the different way of thinking that makes the difference.”
For a transcript of this forum provided by State House News Service, click here.