Today you are here to discuss a racial disparity few people talk about. What is it?
We have covered a number of different forms of economic and financial racial disparities on Money Monday, but unfortunately we have not discussed them all, as a new study makes clear. A new report from the Equality of Opportunity Project (EOP) reveals another barrier to wealth placed in front of the Black community, this one specific to young Black men growing up in financially stable families. The study found wealthy black boys are unlikely to grow into wealthy black men, despite the advantages of their families.
What specifically did the study find?
Basically, this report pokes holes in a couple of long-held beliefs. One is that financial stability tends to be passed on by parents, and then built upon by children in the next generation. After all, according to the Brookings Institute, about two-thirds of Americans maintain the same level or surpass their parents in terms of economic standing.
Yet, these findings do not hold when you break the data down by racial group. This new report found that white boys raised in wealthy families are likely to stay wealthy, while Black boys raised in affluent households are more likely to become poor than to stay wealthy.
In light of this, we also have to reexamine the widely believed belief which holds that factors like growing up in poorer neighborhoods with high crime rates are the reason Black men back have not seen the same levels of economic prosperity as their peers. Yet if a white boy and a Black boy are raised in identical circumstances and Black men fall still lag behind, we have to start looking at factors beyond community circumstances.
Does the report touch on factors that could explain this disparity?
It does. The report notes that racism has a direct impact on the financial futures of young Black men. Measuring implicit and explicit bias among whites across the country, the study found Black boys who grow up in neighborhoods surrounded by less racially biased white people fare much better. That trend holds across all regions of the country.
The study also found that the presence of fathers around Black boys had an impact. It’s important to note that this does not mean the presence of fathers in households, but rather consistent presence of fathers around our boys. The presence of grown Black men in their community – measured by the presence of fathers in given Census blocks – had an impact. Black boys who grow up in wealthier neighborhoods end up richer than those who don’t, but only 4 percent of Black children grow up in areas with a poverty rate below 10 percent and more than half of Black fathers present.
Wow, the fact that racism and role models can have such impacts is amazing. Do these findings hold for girls?
They do not. The report is clear that this disparity is specific to men, and no such racial gap exists between Black and white girls. The New York Times points out that “other studies show that boys, across races, are more sensitive than girls to disadvantages like growing up in poverty or facing discrimination.” This tells us that it is imperative to focus extra efforts on young Black men and push for policy changes across the board – in addressing racism, wealth accumulation, policing and incarceration, everything – in order to ensure our boys are not left behind.
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Mellody Hobson is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News.