Question

How has sstructural discrimination in regards to African Americans in the United States inhibited economic growth

Answer 1

Firstly, let’s understand the concept of Structural Discrimination.

Structural discrimination is one of the forms of institutional discrimination against individuals of a given protected characteristic such as race or gender which has the effect of restricting their opportunities. It may be either intentional or unintentional, and it may involve either public or private institutional policies. Such discrimination occurs when these policies have disproportionately negative effects on the opportunities of certain social groups.

If we talk about the United States, it’s an economy which was built on the exploitation and occupational segregation of people of color. This was a result of not only the government policies and institutional practices but the legacy of slavery and Jim Crow laws also contributed to this structure. Together, these policy decisions concentrated workers of color in chronically undervalued occupations, institutionalized racial disparities in wages and benefits, and perpetuated employment discrimination. As a result, stark and persistent racial disparities exist in jobs, wages, benefits, and almost every other measure of economic well-being.

For centuries, African Americans in U.S. were enslaved and forced to work in brutal conditions as agricultural, domestic, and service workers. By some estimates, slaveholders extracted more than $14 trillion worth of labor, in today’s dollars, from their captives.

In 2018, the median U.S. wage is $18.58 per hour. However, in service occupations with high percentages of Black workers—including baggage porters, bellhops, and concierges; barbers; and taxi drivers—the median wage is just $12.91, $13.44, and $12.49, respectively.

Fifty years after the U.S. civil rights movement, racial economic inequality remains an undeniable force in American life. The family income gap between African Americans (the so called blacks) and whites today remains at almost exactly the level it was in the 1960s—just one of many indicators of the remarkably little progress toward racial convergence in family income. One underappreciated factor that contributes to the racial income gap is the lack of equitable growth in the U.S. economy at large. Since the 1970s, the share of national income going to the richest 1 percent almost doubled, while wages for most Americans remained stagnant. Rising income inequality has disproportionately harmed African Americans, negating substantial improvements in relative terms and preventing what would otherwise have been a meaningful, if incomplete, convergence in incomes between blacks and whites. In short, inequitable growth over the past few decades is a major driver of our nation’s persistent racial income gap.

Let’s first look at the average income for African Americans as a fraction of the average income for whites over time. Whether we choose mean or median, family or household income, the picture is the same: There has been virtually no improvement in the average ratio of black to white income over time. Focusing on median family income, in 1968, just after the civil rights movement, the median African American family income was 57 percent of the median white American family income. In 2016, the ratio was 56 percent. The utter lack of progress is striking. Refer below figure which shows Equitable Growth in US.

Now, lets look at another interesting fact. The effect of rising income inequality on racial disparities also becomes evident by simulating what the income gap would look like if the overall income distribution had stayed constant. If overall inequality hadn’t gone up, the ratio of median black family income to white family income would have climbed from 57 percent to 70 percent, decreasing the racial income gap by 30 percent. That would still be a far cry from racial economic equality, of course. See below image.

Consider the income earned at the 35th percentile, where the median African American stood in 2016. In 1968, a person at the 35th percentile had an income 69 percent of the national mean. But by 2016, income at the 35th percentile had fallen to be just 49 percent of the national mean. Because of rising income inequality, successfully reaching the middle of the income distribution did not provide the same economic reward to blacks as it had to previous groups of Americans.

These findings demonstrate how economic inequality and racial inequality are fundamentally intertwined. Over the past 50 years, a fairly large improvement in the relative position of African Americans was entirely undone by national economic shifts.