INCREASING PUBLIC POWER TO INCREASE COMPETITION: A FOUNDATION FOR AN INCLUSIVE ECONOMY

May 2, 2019 by OUR COMMON GROUND

INCREASING PUBLIC POWER TO INCREASE COMPETITION: A FOUNDATION FOR AN INCLUSIVE ECONOMY

ISSUE BRIEF BY WILLIAM DARITY JR., DARRICK HAMILTON, AND RAKEEN MABUD
MAY 2019

Executive Summary

The United States needs an economy grounded in justice and morality, where everyone, free of undue resource constraints, can prosper. To achieve this, citizens ought to have universal access to undeniable economic rights, such as the right to employment, medical and health care, high quality education, sound banking and financial services, or a meaningful endowment at birth (Paul, Darity, Hamilton 2018). Currently, our system provides these rights primarily through the “free market” by private providers, but these private companies often fail to meet the following criteria:

• Quantity: Are goods adequately supplied?
• Quality: Are the goods high quality?
• Access: Do people have adequate access to these goods?

Because of the failure of America’s markets-first approach to policy, the federal government should intervene by introducing public options that provide these essential goods and services in direct competition with private firms. Doing so will set “floors” on wages and quality and “ceilings” on price for private actors who are intent on providing important economic rights at a cost. In employment, this might mean providing a federal jobs guarantee (FJG); in financial services, this could mean access to bank accounts and safe, nonpredatory loans. Throughout this issue brief, we explore what public options might look like in employment, health, housing, education, and financial services. We argue that in these sectors, public options are necessary to combat high-cost, low-quality provision by private actors and ensure universal and better quality access to all Americans.

Full Report here. https://rooseveltinstitute.org/wp-content/uploads/2019/04/RI_Increasing-Public-Power-to-Increase-Competition-brief-201905.pdf

The report features the work of OUR COMMON GROUND Voices, Drs. William “Sandy” Darity and Darrick Hamilton

The inheritance of black poverty: It’s all about the men

July 9, 2018 by OUR COMMON GROUND

REPORT

The inheritance of black poverty: It’s all about the men

Scott Winship, Richard V. Reeves, and Katherine GuyotThursday, March 22, 2018

Black Americans born poor are much less likely to move up the income ladder than those in other racial groups, especially whites. Why? Many factors are at work, including educational inequalities, neighborhood effects, workplace discrimination, parenting, access to credit, rates of incarceration, and so on.

Black men, stuck in poverty: Chetty’s latest

But gender is a big part of the story too, as detailed in a new paper from the Equality of Opportunity Project, “Race and Economic Opportunity in the United States: An Intergenerational Perspective” by Raj Chetty, Nathaniel Hendren, Maggie Jones, and Sonya Porter. As always, there is a huge amount of data and analysis in the new paper. But the big finding is that race gaps in intergenerational mobility largely reflect the poor outcomes for black men. The report is another contribution to the growing literature showing that race gaps in the intergenerational persistence of poverty are in large part the result of poor outcomes for black men.

“We conclude based on the preceding analysis that the black-white intergenerational gap in individual income is substantial for men, but quite small for women. It is important to note, however, that this finding does not imply that the black-white gap in women’s individual incomes will vanish with time. This is because black women continue to have substantially lower levels of household income than white women, both because they are less likely to be married and because black men earn less than white men.” (p. 23)

In an attempt to estimate the impact of different marriage rates, Chetty et al. calculate the intergenerational mobility rates of black and white men raised in both single parent and married families, and find little difference. As they conclude, “parental marital status has little impact on intergenerational gaps” (p. 25).

In a new paper published today, we examine the same question in a different way. (See our longer Technical Paper here, and full Results here). We confirm the stark differences in upward earnings mobility for black men compared to both black women and whites. We also confirm that black women, despite their solid earnings mobility, have very low family income mobility. We then estimate the impact of racial differences in marriage rates by simulating higher marriage rates among black women: like Chetty, we find no significant effects.

Specifically, Chetty et al. show that black men born to low-income parents are much more likely to end up with a low individual income than black women, white women, and—especially—white men. As they write:

Black and white Americans, on different starting blocks

Black and white children are born into very different economic circumstances. Almost half of black boys and girls are in households in the bottom fifth of the income distribution, compared to just over one in ten white children:

There are, then, huge race gaps in the chances of being born to or raised in a poor family—gaps that were scarcely lower among children born in the early 1980s than they were among those born in the years around 1960. But what about the chances of escaping poverty as an adult?

See Chart here

Gender and race gaps in upward mobility

Using data on 4,200 black and white Americans from the NLSY97, we find that over half (54 percent) of black men born into households in the poorest fifth of the family income distribution end up, as individuals, in the poorest fifth of the earnings distribution for their respective gender, between the ages of 28 and 35, compared to the minority of white men (22 percent), white women (29 percent), and black women (34 percent).

In terms of their individual earnings, black women have similar odds of escaping poverty as white women, though both these groups lag behind the upward mobility of white men. These analyses don’t consider the income of other family members, however. What happens when we look instead at adult family income, as opposed to individual earnings? A very different picture emerges for black Americans:

Black women face a very high risk of being stuck in poverty (62 percent), surpassing even the 50 percent risk faced by black men. For whites, the odds of remaining stuck in poverty remain relatively low, for both men (28 percent) and women (33 percent), when we use a family income measure.

The headline finding here is that, among those who grew up poor, black women are the only group showing a marked difference between the risk of being in the bottom quintile of the individual earnings distribution (for each gender), and the risk of being in the bottom quintile of the family incomedistribution (for the whole age cohort). Whites do well on both counts; black men do poorly on both counts. Black women do reasonably well on the first and very poorly on the second. This result is probably driven by the fact that black women tend to create families with black men who do poorly on both counts and thus bring down the family income results for black women.

Lower marriage rates aren’t hurting black mobility

Why? Various explanations could be given. The most obvious is that, assuming marriages or cohabitation mostly occur within racial groups, black women’s family position is damaged directly or indirectly by the poor outcomes for black men. If white women end up with white men, who in terms of their earnings are more than twice as likely to escape poverty as black men, their family income will be higher. Equally, if black women are more likely than white women to end up as single, they will also record a lower family income.

We set out to model the impact of household formation by artificially equalizing the marriage rates of black women and white women. The results will of course depend not just on whether they marry, but also on whom they marry. In our simulation, we assume that the additional women who are married have a husband with the same economic characteristics as their brother (see the Technical Paper for our detailed methods). The intuition here is that most people are likely to marry someone with a broadly similar background as themselves, and siblings, by definition, have an almost identical one. The results of this equal-marriage-rate simulation are as follows:

Help black men to help black families

Our results strongly echo those of the Chetty team. So what conclusions can be drawn? Chetty’s team are blunt, writing that “the key to closing income disparities for both black and white women is to close intergenerational gaps in income between black and white men.”

This is certainly one of the most important implications of both their study and our own. Breaking the cycle of intergenerational poverty for black Americans requires a transformation in the economic outcomes for black men, particularly in terms of earnings. One important point here: the relationship between earnings and marriage runs in both directions. Married men tend, other things equal, to earn more: one study of identical twins suggests that being married raises earnings by one-fourth. Married men may feel more responsibility to provide economically for their families, and especially their children. Low marriage rates may therefore have some impact on earnings.

It is also clear that the vast inequalities by race cannot be alleviated by upward mobility alone. Black girls are, relatively speaking, more likely to move out of poverty in terms of their own earnings. However, we should keep in mind the sheer number of black children being raised in low-income households in the first place. Closing the race gaps in upward mobility will require wholesale shifts in economic outcomes, perhaps above all for men’s earnings.

Scott Winship is a former Brookings Institution fellow, now at the Joint Economic Committee. His contributions to this report ended before he took his current position. The authors did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. Winship is an honorary advisor for the Foundation for Research on Equal Opportunity and the Archbridge Institute. Other than the aforementioned, the authors are currently not an officer, director, or board member of any organization with an interest in this article.

FOR THE FULL ARTICLE

Dr. William “Sandy” Darity on Ta-Nehisi Coates’ “The Case for Reparations” φ from Demos

May 24, 2014 by OUR COMMON GROUND

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Dr. William Darity, a professor at Duke University and Stanford University has studied reparations in black America for over twenty years is interviewed for this piece. Dr. Darity is an OUR COMMON GROUND Voice.

His new book along with co-author Kristen Mullen, From Here to Equality is coming out this Fall and directly addresses how Coates’ prose can become a Congressional reality.

Reniqua Allen of Demos talked with him, as an advocate for reparations to discuss Ta-Nehisi Coates’, “The Case for Reparations“, an article published on May 21, 2014 in The Atlantic

An Expert Responds to Ta-Nehisi Coates on Reparations

Posted by Reniqua Allen on May 23, 2014

No matter how any conversations we have about America’s past, there’s always some sort of obligatory outrage whenever America’s dark history is synthesized, criticized and laid out before mainstream audiences without any filters. For some of us, the stories of America’s past are nothing new, but for others that history 101 failed (or maybe black history 101?), articles like Ta-Nehisi’s must-read cover story The Case for Reparations is a total eye opener. Coates eloquent essay into America’s past makes the important connection of how the wealth, privilege and white supremacy of the past connect directly to wealth and privilege today. Coates doesn’t directly call for a monetary sum or specific governmental policy to enact reparations, but rather wants to start a national conversation on the topic and it seems, at the very least recognition of the ills that America has wrought far far beyond slavery.

Reparations—by which I mean the full acceptance of our collective biography and its consequences—is the price we must pay to see ourselves squarely. The recovering alcoholic may well have to live with his illness for the rest of his life. But at least he is not living a drunken lie. Reparations beckons us to reject the intoxication of hubris and see America as it is—the work of fallible humans.

Won’t reparations divide us? Not any more than we are already divided. The wealth gap merely puts a number on something we feel but cannot say—that American prosperity was ill-gotten and selective in its distribution. What is needed is an airing of family secrets, a settling with old ghosts. What is needed is a healing of the American psyche and the banishment of white guilt.

What I’m talking about is more than recompense for past injustices—more than a handout, a payoff, hush money, or a reluctant bribe. What I’m talking about is a national reckoning that would lead to spiritual renewal. Reparations would mean the end of scarfing hot dogs on the Fourth of July while denying the facts of our heritage. Reparations would mean the end of yelling “patriotism” while waving a Confederate flag. Reparations would mean a revolution of the American consciousness, a reconciling of our self-image as the great democratizer with the facts of our history.

Coates piece, as he hoped, is sparking a debate about whether African Americans are entitled to reparations and how we can turn his idea into a reality. William Darity, a professor at Duke University has studied reparations in black America for over twenty years (If you’re looking for a primer on the subject check his previous work here). His new book along with co-author Kristen Mullen, From Here to Equality, coming out this fall directly addresses how Coates’ prose can become a Congressional reality. I spoke with the professor, who is an advocate for reparations a day after Coates’ article was published.

What was your initial reaction to Coates’ essay?

I think it’s terrific that Ta-Nehisi was able to use his platform as a prominent journalist to bring the conversation back to this issue because we have ignored it or silenced it for so many years. The last time there was any significant attention drawn to this issue was the beginning of the 2000s, prior to 9-1-1 when there was this set of advertisements that were circulating in colleges attacking reparations. I think this is the first time we got a significant wave of attention that’s being drawn back to reparations. That’s crucial. The other thing I like about the article is its emphasis on the injustices that are associated with the period after slavery, from what I like to call “the deconstruction of Reconstruction” to the Jim Crow period to ongoing discrimination.

Why has the idea of reparations been so anathema to the American public?

That’s a great question particularly since people are not particularly opposed to reparations for injustices that have been perpetrated against other folks aside from black Americans. We ultimately did have a reparations program for the Japanese Americans that were incarcerated during World War II. We could argue over whether or not the amounts of the compensation were adequate, but there was at least a piece of legislation that was passed and signed by the President at the time.

It is interesting that the question of compensation for African Americans tends to draw so much more heat than the compensation for other groups. We can even think about this on an international scale and other instances of injustices. The only answer that I can come up with is that it’s deeply routed in the American psyche about black inferiority and that in some sense blacks must be responsible for their own problems.

There have been a lot of positive responses to this piece. Does that mean we’re ready to have this conversation that Coates wants?

We’re just recovering from the effects of deluding ourselves into thinking this society has become post-racial as the consequence of a black president. In some respects I think that that has contributed to maintaining a veil over the issues surrounding racial injustice and racial depravation. Now we finally have the political security to talk about these issues, despite the fact that we have a black president, and so maybe partly there’s relatively propitious timing for the article. We’re coming to the end of the Obama presidency. Now is the time to look beyond the Obama era and try to address what needs to be done.

What are the next steps?

I would hope that as Ta-Nehisi proposes in his article that Conyers or a Conyers type of bill for the formation of a congressional commission to explore the history of racial injustice in the United States [would be created]. I would think that would be the critical next step. The prelude to Japanese reparations was the formation of a commission that studied the history of the unjust incarceration that took place in World War II.

Who is the one to make this a legitimate conversation? Who is the onus on? Is it the civil rights community? Journalists? Congress? Public intellectuals?

I’m not sure I can answer that. There’s part of me that says all of the above. I’m not sure that any particular group has a monopoly or any obligation to make this a legitimate topic of conversation. But, I think that it is important that people don’t dismiss this as fantasy or as something absurd.

Kirsten Mullen and I are doing a book From Here to Equality it’s about reparations case for black Americans. One of the things we hope to do in the book is to describe in a reasonably detailed way, ways in which you might execute a reparations program and this includes making some judgment about what the magnitude of payments should be, or the magnitude of the total bill, it need not all take the form of payments per say.

Without giving away all the solutions in your new book, can you tell me what you think the path is to reparations?

I’ve said in my own work that I thought that the legislative path is the correct one. The judicial path hasn’t been particularly fruitful thus far. Even if the judicial path results in a system that supports reparations, a court system has no way of implementing it, so you have to go the legislative route ultimately. The positive thing about the legislative route is it would require a sufficient change in public sentiment, so that there would be adequate support for reparations and people who make the charge that reparations would injure race relations would be wrong, because you wouldn’t have reparations unless there was a sufficient amount of support for it from the white community.

Is there any evidence that there is support for this?

The absence of support may be lack of information and lack of understanding of how race plays out in our society. Having a congressional commission, that may open up a clear conversation about these issues that might have a very positive effect on peoples attitudes in the rightness of doing this. I think to the extent that Ta-Nehisi Coates’ article reawakens, let me call it “wise conversations,” then that’s the greatest accomplishment that this article could affect.

Do you think that support for reparations will be different in the black community than the American public at large?

Yes on average, but I’m also aware that there’s a significant portion of the black community that rejects reparations, including the President. It’s about 70 percent of African Americans that are in favor, about 30 percent are opposed.

There seemed to be some tension in academic circles that Coates’ article didn’t address or uncover anything new. Why?

As academics we place a tremendous premium on who was first to say something and we expect others to indicate who said something earlier. So, I think there may be some frustration on the part of some folks who have done a lot of work on the subject that there’s no mention of their ideas or work in Coates’ article. To be frank, there’s no mention of my work, but I’m so pleased he’s rejuvenated this conversation that I don’t want to invest a lot of time in sour grapes.

Final thoughts?

The article is heavily invested in the experience of Mr. Ross and the North Lawndale community of Chicago. I think that it’s vital to provide a story that people can join with rather than a series of statistics, but I think Mr. Ross’ experience is so deeply rooted in the experiences of thousands of black Americans that you would need to multiply his story many times over to get a full sense of the scope of the injustices.

Thanks to Demos for seeking expert review of this most controversial piece and critical issue.

Special thanks to Dr. Darity for his persistence and scholastic excellence on the issue.

You might be interested in these additional articles regarding Reparations

William A. (“Sandy”) Darity Jr. is Arts & Sciences Professor of Public Policy Studies and Economics, Chair of African and African American Studies and director of 087411_darity_william042 the Research Network on Racial and Ethnic Inequality at Duke University. He earned the Ph.D. in economics from the Massachusetts Institute of Technology in 1978. He chairs the prestigious National Association of Economist.   

He is the Samuel DuBois Cook Professor of Public Policy, African and African American Studies, and Economics at Stanford University, and served as chair of the Department of African and African American Studies and is the founding director of the Research Network on Racial and Ethnic Inequality at Duke. He served as co-director of the Institute of African American Research, director of the Moore Undergraduate Research Apprenticeship Program, director of the Undergraduate Honors Program in economics, and director of Graduate Studies at the University of North Carolina.

Darity’s research focuses on inequality by race, class and ethnicity, stratification economics, schooling and the racial achievement gap, North-South theories of trade and development, skin shade and labor market outcomes, the economics of reparations, the Atlantic slave trade and the Industrial Revolution, the history of economics, and the social psychological effects of exposure to unemployment.

Previously he served as director of the Institute of African American Research, director of the Moore Undergraduate Research Apprenticeship Program, director of the Undergraduate Honors Program in economics, and director of Graduate Studies at the University of North Carolina at Chapel Hill.

  Darity’s research focuses on stratification economics, inequality by race, class and ethnicity, schooling and the racial achievement gap, North-South theories of trade and development, skin shade and labor market outcomes, the economics of reparations, the Atlantic slave trade and the Industrial Revolution, doctrinal history and the social psychological effects of unemployment exposure.  