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What Systemic Racism Systematically Downplays National Affairs

Peter Schuck National Affairs
Date Posted:
March 23, 2022
Is Database:
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Dysfunction in black family life has increased as racism has diminished suggesting limited salience of “systemic racism”.

Dysfunction in black family life has increased as racism has diminished suggesting limited salience of “systemic racism”.
Despite diminishing racism and rising economic gains, troubling trends in black family life, such as low marriage rates and high divorce rates, have worsened, suggesting systemic racism is not the primary cause. Black immigrants, whose marriage rates are over 70% higher than native-born blacks, remain relatively unaffected by these trends, further indicating that other factors are at play. Additionally, the fact that similar patterns are affecting impoverished white families suggests that systemic racism is not the main driver. These trends highlight the need to focus on family stability and socioeconomic factors rather than solely attributing disparities to systemic racism.

“… That family and custodial chaos, low marriage rates, and high divorce rates and other troubling trends in black family life have worsened at a time of diminishing racism, rising economic gains, and escalating political power among black Americans strongly suggests that systemic racism, whatever the term might mean, cannot persuasively explain them. Indeed, the fact that many of these same trends are also corroding impoverished white families while leaving black immigrants (whose marriage rates are over 70% higher than those of native-born blacks) relatively untouched indicates that racism, systemic or otherwise, is not the primary driving force behind the patterns described…. People whose only offense is drug use almost never go to prison today, and if they do, they rarely spend much time there. Moreover, recidivism rates in the United States are extraordinarily high: Two-thirds of those released from prison are arrested for a new crime within three years, while half end up re-incarcerated…”

Peter Schuck, “What Systemic Racism Systematically Downplays,”National Affairs, Spring 2022https://www.nationalaffairs.com/publications/detail/what-systemic-racism-systematically-downplays

What Systemic Racism Systematically Downplays

For several years now, systemic racism has been among the most frequently mentioned concepts in American discourse. The term and its equivalents — including “structural” and “institutional” racism — appeared in the New York Times and the Washington Post roughly 10 times more often in 2019 than they did in 2013, and have greatly proliferated since then. The topic is now the subject of countless college courses, classroom discussions, books, articles, media programming, political speeches, and formal and informal conversations. It is safe to say that today, systemic racism has reached the status of a cultural meme.

Progressive advocacy groups use claims of systemic racism to shape a distinctive political agenda and rhetoric, emphasizing certain themes and downplaying others. Though their commitments are understandable, their preoccupation with the concept tends to understate progress among the black middle class while distracting from, and even undermining, a far more compelling priority: the repair of so many broken black communities in low-income areas.

The language of systemic racism does not seek to mobilize such repair, nor does it equip younger black Americans with the tools to pursue the many genuinely equal opportunities that now exist. So while it is important to take the systemic-racism thesis seriously, it is also crucial to consider what it leaves out, as well as what it obscures.

CLARIFYING THE CONCEPTS

Before discussing the imperative of individual and community repair, I shall briefly clarify the notion of systemic racism itself, which plays a central, though largely unexamined and analytically undisciplined role in our national debate.

The term “racism” is serviceably clear in its meaning, if not its application: It is the belief that one race — a human grouping distinguishable according to its inherited physical characteristics, particularly skin color — is inferior to another race, justifying stigma, separation, or mistreatment of various kinds. This concept differs from what I shall call “racialism,” which refers to a heightened consciousness of the race of another person or group.

Racism is invidious, hostile, and demeaning. It denies the inherent equality of all human beings and represents the corrosive attitude that those who denounce systemic racism have in mind. Racialism, by contrast, is morally neutral, arguably rational, and — in a society with our history of race-based slavery, discrimination, and continued social differences between whites and blacks — probably inevitable. Ongoing racial disparities mean that people are often conscious of and call attention to another’s race for reasons that lack the animus of racism, and indeed are often benign. Regardless of whether observers are animated by perceptions of blacks’ continued disadvantages in our society, the racially stratified nature of so many of our institutions, or guilt over America’s history of race-based enslavement and subjugation, they would have to be obtuse or willfully blind not to be racialist — not to mention callous to fail to sympathize with the plight of many black Americans.

Ordinarily, one cannot easily detect another person’s feelings about black disadvantage in America, much less know whether those feelings are animated by racism or racialism. Since they are both states of mind, distinguishing between them empirically is especially difficult. Some advocates may not care much about detecting this attitudinal distinction, so long as blacks’ disadvantage persists and whites fail to do what they should to eliminate it. But if whites’ attitudes are the very essence of systemic racism, then the distinction between racism and racialism matters greatly.

So what makes racism — a conviction held by an individual — “systemic”? Definitions of the term vary, but they tend to hinge on the claim that racism is not simply an attitude held by some individuals; instead, it is a form of discrimination inherent to policies, practices, social institutions, cultural mores, and environmental characteristics that place minority racial groups at a disadvantage relative to the racial majority. “Systemic” means that such bias is not only widespread, but practically inescapable.

In America, systemic racism is said to manifest in a socially pervasive bias against blacks that is threaded through all of our major institutions. Most, if not all, accounts of systemic racism build on both an observation of a population-level disparity — such as the differences between blacks’ and whites’ income or achievement levels in school — and a causal account of that divergence. Each of these variables raises thorny analytical questions that require solid data to answer. In order to compare how blacks and whites are treated by police or teachers, for example, one needs to know the behavioral base rates of the two groups; comparing blacks’ and whites’ arrest rates or differences in school-disciplinary actions is meaningless unless we know and can compare how the two groups actually behaved on the street or in the classroom. Yet such data are often hard to come by. Simplifying the task by presuming the base rates are the same begs the question at issue, as does assuming that the base rates differ due to racism and its continuing effects on the black population — a central premise of the systemic-racism thesis.

Adherents of the thesis identify its manifestations in numerous, if not all, domains of American life. One popular video series focuses on eight indicia of the phenomenon: the wealth gap, employment disparities, housing discrimination, and differences in rates of government surveillance, incarceration, drug arrests, immigration arrests, and infant mortality. The Fair Fight Initiative lists a similar array of social conditions in which blacks are said to be systematically and chronically disadvantaged due to five widespread forms of racism: internalized, interpersonal, individual, institutional, and structural.

Those who denounce systemic racism see the cumulative subordination of blacks throughout history as forming a racist substructure that underlies, and thus permeates, our society, producing the disparities outlined above. Such racism is said to be so deeply embedded in our most powerful institutions and cultural mores that it will persist even without new infusions of racism at the individual level. This claim is pivotal, and appears in its pure form in the December 2020 issue of Academic Medicine: “f we are White,” the article states, “we are a big part of the problem. We are part of the reason that structural racism imprisons and oppresses people of color every day, everywhere they go, and no matter what they do.” Equal treatment now and in the future may soften the effects of systemic racism, but such treatment can never fully eliminate the harm.

Systemic racism is said to pose continuing barriers to blacks’ ability to improve their socioeconomic lot — impediments that they have limited capacity to overcome thanks to the structurally racist milieu in which they operate. By the same token, it’s not clear from this account what whites can do to rid themselves of their own inherent racism or purge the system of its bias. Systemic racism’s underlying premises, then, imply little agency on either side of the racial divide.

SYSTEMIC RACISM VERSUS INEQUALITY

The notion of systemic racism resonates with many Americans today, largely because racism was indeed systemic in the United States in the not-so-distant past. Slavery, which had been a feature of human civilization for millennia, took on a decidedly racial bent as millions of Africans were shipped to the New World as slaves. The United States eventually outlawed the trans-Atlantic slave trade in 1808, but race-based slavery continued to proliferate domestically for decades, most notably (albeit not exclusively) in the South. The ratification of the 13th Amendment on the heels of a bloody civil war brought an end to slavery as a matter of law in 1865. It would take another century, however, before black Americans were fully recognized as citizens entitled to equal civil rights under the law.

The long history of de jure slavery, segregation, and categorical subordination of blacks in America may have formally ended with the civil-rights revolution of the 1960s, but even then, some of the movement’s fundamentally liberal reforms — particularly racial integration of schools, voting, public services, and accommodations — generated massive resistance, followed by slow, grudging, formalistic compliance in the South. Even in the North, efforts to integrate schools, housing, and other social domains spawned considerable public resistance. Almost three generations, decades of affirmative action, and trillions of anti-poverty dollars later, many Americans of all races remain painfully aware of continuing racial injustice and embedded inequality. This surely explains why 84% of Americans polled by the Pew Research Center in 2021 felt that more needed to be done to ensure racial equality.

But present inequality between blacks and whites, particularly in a historically stratified society like the United States, is not necessarily due to ongoing systemic racism. Black and white Americans remain unequal on a host of social indicators, to be sure. But whether each of these inequalities violates particular principles of justice poses other, more difficult analytical and normative issues that systemic-racism claimants seldom squarely address.

An important and deeply challenging feature of racism is that it is easy, and often tempting, to accuse another of harboring racist beliefs, but difficult — perhaps even impossible — for the accused to disprove the allegation. Charges of systemic racism are especially tricky to refute, as activists claim that race-based discrimination can be so subtle, so covert, and so entrenched in a culture or an institution’s fundamental structure that those who operate under it may not even recognize their complicity in the subjugation of racial minorities. Again, given our society’s long history of de jure racism and the complexities of causality over time, this claim of complicity is practically irrefutable, making such accusations easy to make and abuse.

The best that the skeptic of this account can do is identify good reasons to doubt that racism in America today is truly systemic. As it turns out, there are four such reasons, the first of which is that rates of racist beliefs among individual Americans have declined over time. Public polling about white-black intermarriage, residential proximity, and other interactions shows dramatic increases in tolerant attitudes among whites since the 1960s. Although white-supremacist hate groups often loudly avow their racist beliefs, they remain a tiny, isolated fraction of the population, and are almost universally reviled by the political left and center as well as many on the right eager to distance themselves from fringe elements.

Of course, people harboring bigoted views often hide them in public, especially in social environments where racism is highly stigmatized. Answers in a survey are not proof that people do not hold racist views, although they do show that people are at least ashamed to admit them. That said, rates of behaviors related to or motivated by racism have fallen as well. In 2020, the FBI found that although the largest category of hate crimes (61.8%) were based on race/ethnicity/ancestry bias, the number of these incidents was under 6,000 nationwide. In a population of over 330 million, this surely does not qualify as systemic.

Second, the cohort of the U.S. population that has been most likely to hold racist views is slowly but inexorably dying out, to be gradually replaced by generations who tend to be far more accepting of racial differences. Though this theory is subject to some dispute, it is undeniable that members of younger generations seem to harbor less overtly racist beliefs than those of older generations. As these young Americans assume leadership roles in our nation’s core institutions, their views will affect those institutions’ structures, policies, and actions, as well as the people they influence. That virtually every major American institution in recent years has explicitly committed to combatting systemic racism suggests that we are already witnessing this trend taking shape.

A third reason to doubt the systemic-racism thesis is that anti-racist protests and highly publicized punishments of racist incidents have made racism much more newsworthy than it was in decades past. As a result, public discussion of the subject occurs much more often in our communities and traditional media today than it once did — and the tenor of this discourse is almost invariably opposed to racism. To the extent that systemic racism is inherently implicit or invisible, there is less room for it to hide now than there was in the past.

Additional public developments have likely heightened awareness of, as well as shame over, racism’s role in our history. These include the 1619 Project (the book derived from which is on the best-seller list at the time of this writing), officially sanctioned removals of statues and other historical symbols linked to racism, highly publicized convictions of police officers and civilians for hateful crimes against blacks like George Floyd and Ahmaud Arbery, and numerous “cancel culture” incidents in prominent institutions ranging from local governments, schools, and museums to professional groups, athletic leagues, religious communities, and others. As I have written elsewhere, this practice of “canceling” individuals is often shameful and reprehensible. But it does demonstrate how deeply stigmatized racism is in American society.

It is possible, of course, that these developments have simply driven much hitherto overt racism further underground. But if so, such furtive racism — the sort of racism that dare not speak its name — would be the very antithesis of systemic.

Indeed, these incidents and others have made many white Americans desperate to avoid being associated with criticisms of blacks. The Democratic Party in particular has embraced a tactical silence on the matter, and for perfectly straightforward reasons: Given Latino defections during the 2020 elections, blacks are now the party’s only reliable racial or ethnic constituency. Under these conditions, the party’s white activists are less willing than ever to risk offending black leaders and voters. Meanwhile, Republican-controlled state legislatures and governors — realizing that blacks overwhelmingly vote Democratic — gerrymander legislative seats to minimize black constituents’ political potency. If they believed black votes were truly up for grabs, they would surely compete for them — a logical circularity that Republicans may yet break, as they have done with Latinos.

Even if one were to ignore these facts and insist that systemic racism remains widespread in today’s America, there are good reasons to doubt that it represents the primary driver of continuing black disadvantage. For starters, the impressive upward mobility of other non-white groups — including immigrants of color — continues to confound the systemic-racism thesis. The most economically successful of these groups are Asians, particularly Chinese, Japanese, and Koreans — many of whom began life in America without American blacks’ English-language advantage. In a recent study, researchers led by Raj Chetty — a leading analyst of economic mobility among different racial and ethnic groups — found that Hispanic and Asian Americans are closing much of the income gap with white Americans, while the upward mobility of lower-class black Americans has not kept pace.

Perhaps most discrediting of the ongoing systemic-racism account is the fact that black immigrants’ economic mobility is much greater than that of blacks born in the United States. The median household income of the rapidly growing cohort of black immigrants is about 30% higher than that of American-born blacks. If systemic racism were the primary driver of blacks’ disadvantages in America, we would expect it to hold back this population as well. Yet it seems not to have done so. Causal factors other than systemic racism, then, must be contributing significantly to black disadvantage in areas where it persists.

SEEKING REMEDIES IN THE WRONG PLACES

Downplaying systemic racism as a major cause of continuing black disadvantages still leaves those disadvantages in place, of course. And for all too many of the most important social indicators, American blacks are significantly worse off on average than whites. This is true in terms of their lower income and net worth, as well as their higher rates of poverty, homelessness, criminal arrest, incarceration, marital instability, mortality, morbidity, and many other measures of social health.

Addressing these conditions should be among the highest priorities of public policy and civic and community action. Reformers frequently propose strategies to do just that. Some proposals are contained in pending legislation, and wisely target poverty across the board. A refundable child tax credit is perhaps the most compelling example, although it must be carefully crafted to minimize perverse incentives that tend to encourage the fractured-family complications discussed below. Refining and simplifying the Earned Income Tax Credit would also go a long way toward making the credit more accessible to more low-income workers. Efforts to reinforce the “success sequence” of high-school completion and delayed marriage and childbearing (discussed below) should be redoubled, as should those aimed at expanding school choice through vouchers, charter schools, and other innovative alternatives. Meanwhile racism, systemic or otherwise, must be fought wherever it is detected or suspected, both legally and socially.

My focus here, however, is not to evaluate these and other specific policy remedies, as I have done in other publications. Instead, I would like to call attention to some of the problems and opportunities that the current preoccupation with systemic racism obscures, and may even aggravate. The following discussion has two purposes, the first of which is to detail some of the facts that impede blacks struggling to escape poverty’s depredations. The second is to discredit the idea, which seems ubiquitous among reformers and activists on the left, that systemic racism continues to be a, if not the, principal cause of these enormous problems. As I emphasize above, systemic racism was indeed a most shameful, tragic feature of American history, and there is no doubt that some elements of its terrible legacy remain. But to say that ongoing systemic racism is the primary driver of current disparities between black and white Americans today is to distract attention from what may actually be causing or worsening the problem. It also likely contributes to a sense of despair that hobbles efforts to pursue meaningful change.

The first social factor contributing to socioeconomic disparities between blacks and whites in America is the fragility of the black family. Families represent the core of any healthy society, and the steady decline of two-parent households among Americans of all races is probably the most important, and most troubling, social trend that has materialized since World War II. For black families in particular, the development has been devastating.

In terms of family formation, black men today are far less likely than white men to get married. And unlike higher-income white men, who are more likely to marry than low-income white men, educated, economically prosperous black men are no more likely to marry than their poorer black counterparts. In fact, these men are less likely than poor blacks to have ever married at all.

For those who do marry, the statistics remain grim. Black men experience greater rates of divorce and separation than white men, and when their marriages dissolve, they are far less likely to remarry. Meanwhile, black women typically spend only 22% of their lives married — half the percentage of white women. And while unmarried women often cohabit with men, prominent marriage scholar Andrew Cherlin has found that these relationships tend to be relatively short-lived.

The breakup of marriages among black couples, combined with their failure to form in the first place, has had a predictably tragic impact on black children. Even as racism — both institutional and individual — in America has declined over the past century, the incidence of out-of-wedlock births within the black community has soared. According to the most recent National Vital Statistics data, 70% of black children were born to an unmarried mother in 2020 — triple the rate Daniel Patrick Moynihan cited when he first sounded the alarm over the deteriorating state of the black family in 1965. For whites in 2020, the rate was just over 28%. (Moynihan’s report placed it at 3% in 1963.)

The best predictor of low prospects for children, regardless of race, is growing up in a single-parent household. Over half of all poor children come from female-headed households, while a child raised without a father at home is four to five times more likely to be poor than a child of married parents. As family expert Kay Hymowitz has shown, these broken families often consist of “a revolving cast of stepparents, half-siblings, stepsiblings…and short-term romantic partners.” Such instability, she observes, “can be every bit as damaging to children as poverty itself.”

All of these elements — family and custodial chaos, low marriage rates, and high divorce rates — contribute to the persistence of disproportionate levels of poverty among black children. That these and other troubling trends in black family life have worsened at a time of diminishing racism, rising economic gains, and escalating political power among black Americans strongly suggests that systemic racism, whatever the term might mean, cannot persuasively explain them. Indeed, the fact that many of these same trends are also corroding impoverished white families while leaving black immigrants (whose marriage rates are over 70% higher than those of native-born blacks) relatively untouched indicates that racism, systemic or otherwise, is not the primary driving force behind the patterns described.

A second factor contributing to socioeconomic disparities between black and white Americans is isolation. Poor blacks are isolated in several ways that tend to keep them impoverished. The digital divide, for example, deprives them of information and social connections. But a related, and perhaps even more limiting, form of isolation is geographic — some of which reflects systemic racism of the past. As researchers like Harvard’s William Julius Wilson have observed, blacks tend to live in areas of low economic growth, modest wage levels, and high unemployment, which limits their access to institutions and resources that contribute to upward mobility. Extensive research by Chetty and others suggests that these geographic elements are predictive of future economic prospects.

Blacks’ isolation is not limited to geography, however; they tend to be socially isolated as well. Upward mobility depends heavily on people’s social capital — their embeddedness in social networks and institutions — which helps them gain the kind of experience, reputation, and relationships that they can use to their advantage. Orlando Patterson’s work on social networks provides dismaying insight into how social isolation perpetuates poverty among black Americans, even as a large black middle class has emerged against great odds. According to his research, blacks’ networks are smaller, denser, and include remarkably few kinsmen compared to those of other races; indeed, almost half of black individuals surveyed had no kinsmen in their networks at all. In a finding he characterized as “truly startling,” Patterson observed no relationship whatsoever between network density and education levels among this population. In other words, greater levels of education — which, as sociologist Robert Putnam has found, tend to correlate with larger social networks in the general population — did not extend blacks’ ties by much. Again, ongoing systemic racism is not the likely culprit here.

A third factor contributing to continuing black-white disparities in America is schooling. Years of education and skills training are strongly correlated with wealth and income, and in recent decades, blacks have made significant gains in their rates of high-school graduation (which hovered around 25% in 1965 and are now at 88%) and college enrollment (38% in 2018, compared with roughly 15% in 1968). This progress is laudable, but graduation statistics conceal large skill gaps that remain.

At the same time, blacks’ college-graduation rates continue to lag behind those of whites. One significant factor behind this continued disparity is black students’ greater likelihood of dropping out of post-secondary school, which frequently saddles them with substantial student-loan debt but no credentials. Those who do graduate often leave with credentials that are too meager to sustain a promising occupational future.

At the primary- and secondary-school levels, black students are disproportionately cited for misconduct, which leads to higher drop-out rates and what some advocates decry as a “school-to-prison pipeline.” Civil-rights officials in Barack Obama’s Department of Education (many of whom have been restored during President Joe Biden’s term) blame these discrepancies on racial bias among school administrators and teachers — accusations these groups stridently deny. John Ogbu and other educational researchers, by contrast, have pointed to an “oppositional culture” among many black students that manifests itself in less time spent on homework, high rates of truancy, elevated drop-out rates, and greater indiscipline. The latter in particular harms classroom learning for other students and has increased teacher attrition rates in many urban schools, which further undermines educational progress in black neighborhoods. The remedies for these conditions are elusive, but they surely lie to a large extent within the black community and black families.

A fourth factor contributing to social and economic disparities between blacks and whites is crime. Heightened levels of criminal activity continue to plague impoverished urban neighborhoods, where blacks not only disproportionately represent the perpetrators, but also the victims. Those who decry systemic racism often point to higher rates of incarceration as the main driving force behind disproportionate rates of black poverty. And indeed, this factor clearly contributes to racial socioeconomic disparities. Imprisonment, especially for long periods of time, ruptures a person’s ties with his family and community — both of which offer legitimate sources of upward mobility. It also harms his future employment prospects, as many employers screen for applicants with criminal records. And as systemic-racism theorists almost invariably point out, blacks in America are imprisoned at much higher rates than whites.

Activists insist that these disparities call for large-scale de-incarceration, but releasing or diverting those convicted of minor offenses would have little real impact on incarceration rates. People whose only offense is drug use almost never go to prison today, and if they do, they rarely spend much time there. Moreover, recidivism rates in the United States are extraordinarily high: Two-thirds of those released from prison are arrested for a new crime within three years, while half end up re-incarcerated. Given that the victims of these crimes tend to be overwhelmingly black themselves, the costs of de-incarceration would fall most heavily on the black community. The same is true of “defund the police” measures, which many activists called for during mass protests against highly publicized police shootings of unarmed black individuals in 2020 and 2021. Wiser public officials — many of whom are black themselves — have opposed these demands.

Historically speaking, much of the damage to black families and communities had occurred long before black incarceration rates began their rapid rise several decades ago, suggesting that these elevated rates were at least in part a result, rather than a cause, of those communities’ socioeconomic decline. To be sure, the two trends have likely precipitated a vicious cycle, whereby increased poverty begets increased incarceration and vice versa. Yet the order of the trends indicates that poverty — abetted by familial breakdown — was the leading impetus.

Fifth, many people — black and otherwise — find themselves in an impoverished state for a reason they may admit to themselves and others: They have made poor choices in the past that continue to harm them in the present. Observers who make this point are often accused of lacking compassion, “blaming the victim,” and ignoring the structural causes of behavior. Such causes obviously matter, but any analysis that fails to consider the role of self-harming choices misses an important clue to what causes and sustains some poverty in black communities — and also what might reduce it.

By “poor choices,” I am referring to decisions that squander or shut out opportunities to better one’s prospects in the future. Some of these behaviors, like excessive gambling or the abuse of alcohol or tobacco, are merely self-destructive. Others, such as the abuse of illicit drugs, are also punishable by law. If detected, they will foreclose many paths out of poverty.

Most poor choices, however, are simply shortsighted; they sacrifice the real possibility of future, durable gains for more immediate, transitory ones. Common examples include chronic truancy; mingling with anti-social people; ignoring schoolwork in favor of television, the internet, or video games; engaging in habitual indiscipline; dropping out of school; excessive borrowing and spending; parenting children whom one cannot afford or care for; and quitting jobs or training programs from which one could acquire useful skills, experience, or certifications. Here, too, systemic racism’s causal role is obscure. Though external remedies may help at the margins, solutions to these largely self-inflicted conditions must also include a change in individuals’ behavior.

Indeed, studies have long shown that simple prudence and self-discipline — of which almost anyone is capable — can nearly eliminate the prospect of poverty for black and white teenagers alike. The so-called “success sequence” analyzed by Brookings Institution scholars — finishing high school, marrying after the age of 20, and doing both before having a child — reduces the risk of falling into poverty to 2%; failure to follow this path raises it to 75%.

To reiterate, racism was indeed a systemic phenomenon for most of America’s history. And where racism persists, it remains a pernicious force in American life. But the insistence that racism continues to be both systemic and endemic, and that it alone or primarily accounts for ongoing disadvantages in black communities, is unpersuasive. The claim neither accords with crucial social realities nor points toward constructive solutions to the serious problems afflicting black Americans. As long as would-be reformers and their audiences take systemic racism as their principal target, real progress toward genuine and necessary policy and cultural solutions will be even more elusive.

AGENTS OF CHANGE

The challenge we confront today is to identify and overcome those obstacles to black Americans’ progress that were placed there not only by racist systems of the past and programmatic failures of the present, but also by behaviors over which they and their communities have some control today. All three of these elements are crucial.

The vast array of federal and state policies that have been established and expanded for decades to address the challenges black Americans face have not sufficiently accomplished their missions. For better and for worse, the community’s main challenges and opportunities today lie closer to home — in families, schools, workplaces, health practices, local mobilization, and well-targeted self-interest. This is one battleground where the future struggle must be waged and won.

Peter H. Schuck is the Baldwin Professor of Law, Emeritus, at Yale Law School and a Distinguished Scholar in Residence at New York University Law School. He is the author most recently of One Nation Undecided: Clear Thinking about Five Hard Issues That Divide Us (Princeton University Press).

  • Inequality
  • Workforce
    • Family/Marriage
    • Poverty/Crime
    • Unemployment/Participation
    • Wages/Income
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US Corporate Profits Surge To Record As Worker Payouts Wilt

AI Summary. U.S. corporate pre-tax profits reached an annualized $4.8tn, or 18% of national income—the highest share since the post-WWII era—while workers' wages and benefits fell to 60% of national income, the lowest since the 1950s.

Myles McCormick Financial Times
Date Posted:
August 28, 2026
Is Database:
Database

Corporate profits have risen to 18% of national income, their highest share since 1947, while labor’s share has fallen to 60%, a low not seen since the 1950s. The decline in labor’s share has accelerated over the past year.

Are record corporate profits coming at workers' expense?

Pre-tax earnings hit an annualised $4.8tn in the second quarter, or 18% of national income, according to Bureau of Economic Analysis data, the highest share since the aftermath of the second world war. Employees’ share from wages and benefits fell to 60%, the lowest level since the 1950s. “Regardless of what measure you look at, workers, in terms of employee compensation, have been receiving an increasingly small share of national income over time,” said Abiel Reinhart, an economist at JPMorgan. The decline in labour’s share of income has gained pace in the past five years and especially over the past 12 months.

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  • Are US Corporate Profit Margins Too High? — In Q1 2026, US after-tax non-financial margins were estimated at 7.6%, just short of the post-1949 high of 8.2% in Q2 of 2021. Tan Kai Xian argues US corporate…
  • Why the Labor Share Keeps Falling: Taxes! — Tax code changes account for roughly one-third of the decline in the worker share of U.S. business income since 1978, as firms shift from corporate to pass-through structures to reclassify wages as profits and reduce tax burdens.
  • Inequality
  • GDP
    • Financial Markets
  • Politics
  • Workforce

The Rise Of The Deserving Rich

AI Summary. Billionaire wealth from self-made entrepreneurs in competitive sectors has reached an all-time high, with fairly earned wealth now accounting for half of total billionaire wealth globally, while wealth from politically connected industries has declined since 2021.

Economist Staff The Economist
Date Posted:
July 24, 2026
Is Database:
Database
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Important

An Economist analysis of the wealth of 7,000 billionaires finds that over the past decade, the share of billionaire wealth “derived from self-made entrepreneurs in competitive sectors has surged to an all-time high.”

Does self-made wealth now dominate billionaire fortunes globally?

Core argument: For the first time in the 25-year dataset, half of global billionaire wealth derives from self-made entrepreneurs in competitive sectors, marking a structural shift away from politically connected and inherited fortunes.

Drawing on data from Forbes, a magazine, Hurun, a research firm, and Gapminder, a Swedish foundation, we have assembled a list of about 7,000 billionaires from the past 25 years. We call a billionaire’s wealth “uncompetitive” when it mainly comes from industries such as gambling, construction, defence, and raw materials. These sectors often depend on political access. We count inheritors in the “uncompetitive” category. From 2001, when our data begin, to 2014, the uncompetitive share of billionaire wealth rose slightly. Yet over the past decade, the share derived from self-made entrepreneurs in competitive sectors has surged to an all-time high. For the first time, half the wealth of the world’s billionaires is reasonably fairly earned. And since 2021, the total wealth derived from uncompetitive sectors has declined.

Takeaways by Macro Roundup® AI

  1. For the first time in the 25-year dataset, half of global billionaire wealth derives from self-made entrepreneurs in competitive sectors, marking a structural shift away from politically connected and inherited fortunes.
  2. The uncompetitive share of billionaire wealth—spanning gambling, construction, defence, raw materials, and inheritance—rose modestly from 2001 to 2014 but has declined in absolute terms since 2021.
  3. Inherited wealth, though typically lawfully held, represents a policy failure in wealth distribution, as heirs’ fortunes reflect birth advantage rather than competitive value creation.

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  • America’s Support for Capitalism Has Declined Over Last Decade — American confidence in capitalism has fallen from 60% to under 50% over the last decade, while only 12% believe democracy is working well and just 35% believe the economy offers a fair path to prosperity.
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Another Reason the Labor Share Keeps Falling: Taxes!

AI Summary. A shift of ~$200bn in worker pay into corporate profits as stock-based compensation could explain roughly one-third of the long-run decline in labor's share of income, as stock ownership allows high earners to receive tax-preferred pay recorded as profits rather than wages.

Owen Zidar and Eric Zwick The Everywhere Millionaire
Date Posted:
July 1, 2026
Is Database:
Database
Is Important:
Important

Zidar & Zwick suggest about one‑third of the post‑1970s drop in labor’s share is due to stock‑based pay to workers, in addition to the one‑third they already attribute to pass‑through income. That leaves only around one‑third for genuine shifts in technology, power, etc.

Does tax-preferred stock compensation explain the labor share decline?

Core argument: $200bn in missing labor compensation since the late 1970s drives roughly one-third of the labor share decline, reflecting tax-advantaged stock.

In our data for 2017, after adjustments for the rise of pass-throughs, we report employee compensation of $7.2 trillion and corporate value added of $12.2 trillion. The unadjusted corporate profits number (which excludes partnership profits) is $1.7 trillion. If we could find around $200 billion of “missing” labor compensation, that would account for about a third of the fall in the labor share since the late 1970s. Thus, if workers owned a bit above 10% of those corporate profits via stock compensation, then that would cover the difference. Distributing this amount across the top 10% of public company employees, of which there are 4.2 million, this ownership would imply an additional $40,000 or so in pay. The aggregate numbers are thus quite plausible in terms of how much pay might have shifted to corporate profits serving as tax-preferred payments to high earners.

Takeaways by Macro Roundup® AI

  1. $200bn in missing labor compensation since the late 1970s drives roughly one-third of the labor share decline, reflecting tax-advantaged stock.
  2. Top 10% of public company employees ($40k additional implicit pay via equity ownership) concentrate gains that would equal $200bn aggregate.
  3. $12.2tn corporate value added vs. $7.2tn employee compensation reveals labor’s shrinking claim on output, as tax-preferred equity arrangements redirect worker.

Related Articles:

  • Why the Labor Share Keeps Falling: Taxes! — Tax code changes account for roughly one-third of the decline in the worker share of U.S. business income since 1978, as firms shift from corporate to pass-through structures to reclassify wages as profits and reduce tax burdens.
  • Human Capitalists — Equity Based Compensation ~45% Of Total Comp Of High-Skilled Labor, Including It In Labor Share Cuts Decline of Labor Share Since The 1980’s By 60%.
  • Capitalists in the Twenty-First Century — Most income at the top of the US income distribution is non-wage income, primarily derived from private business profits, according to @MatthewSmith…
  • Inequality
  • Fiscal Policy
    • Taxation
  • Workforce
    • Wages/Income

Do Past Wealth Gaps Explain Modern Inequality? Evidence From Immigration To The United States

AI Summary. European immigrants who arrived with nearly no wealth converged to similar wealth levels as earlier European settlers within a few generations, while Black, Cuban, Mexican, and Puerto Rican households remained substantially behind, indicating that initial wealth gaps do not uniformly predict long-run inequality across all groups.

Brian Marein Wake Forest University
Date Posted:
June 30, 2026
Is Database:
Database
Is Important:
Important

Except possibly at the very top of the distribution which SIPP cannot measure, the wealth of “new” Southern and Eastern European immigrants to the US has fully caught up with “old” immigrants. Wealth converges quickly once earnings inequality vanishes.

Does initial wealth explain persistent inequality across immigrant groups?

Core argument: By 1920, 50% of white adults were foreign-born or had foreign-born parents, yet Southern and Eastern European descendants achieved wealth.

Inferring the determinants of long-run inequality from group-level data is complicated by the arrival of 30 million Europeans during the Age of Mass Migration (roughly 1850 to 1924), who are by construction included in average white wealth despite having no direct claim to the wealth accumulated by earlier Americans. By1920, nearly half of white adults were either foreign-born or had foreign-born parents. Using the United States Immigration Commission Reports (commonly known as the Dillingham Commission Reports), I document that immigrants at the turn of the twentieth century arrived with almost no wealth. [Thus] a large share of the white population started from a substantial wealth disadvantage. Northwestern Europeans comprised the overwhelming majority of earlier immigrants, dating back to the initial European settlement of North America, while Southern and Eastern Europeans predominated at the turn of the twentieth century. If initial wealth disadvantages persisted across generations, one would expect households of Southern or Eastern European ancestry to possess less wealth than those of Northwestern European ancestry, since their families arrived later and started with substantially fewer resources. In fact, they do not. On average, they are wealthier.

Takeaways by Macro Roundup® AI

  1. By 1920, 50% of white adults were foreign-born or had foreign-born parents, yet Southern and Eastern European descendants achieved wealth.
  2. European immigrants arrived at the turn of the twentieth century with nearly zero wealth, yet their descendants’ wealth distributions converged.
  3. White ancestry groups exhibit nearly identical wealth distributions by 1980–1990 despite staggered arrival times spanning 270+ years, while Black, Cuban.

Related Articles:

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  • 00 to 2022 — Gregory Clark @PNASNews finds that social status in England was strongly correlated across generations between 1600 and 2022, consistent with a theory of…
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The Great $110 Trillion Wealth Transfer Won’t Happen Any Time Soon

AI Summary. Bequeathable wealth in the U.S. rose from 256% to 424% of GDP between 1997 and 2021, with 97% of that increase concentrated in households headed by someone 55 or older. The wealthiest 10% of that age group drove 75% of the total gain, meaning inherited wealth is becoming increasingly concentrated

Rachel Louise Ensign and James Benedict Wall Street Journal
Date Posted:
May 5, 2026
Is Database:
Database

The age at which Americans are inheriting money has risen. According to Federal Reserve surveys, btw 1998 and 2010, Americans in their late 50s were most likely to report receiving an inheritance; by 2013–2022, that age had ticked up to the mid 60’s.

Will the concentration of inherited wealth impact economic equality?

Core argument: Bequeathable wealth surged to 424% of GDP in 2021 from 256% in 1997, with 97% of gains concentrated in households.

Fed data [indicates] that what is known as the bequeathable wealth rose from 256% of gross domestic product in 1997 to 424% in 2021, the last year of available data. A staggering 97% of that increase was due to wealth gains in households where the head of household was 55 or older. Older Americans may keep accumulating wealth, especially if the stock market keeps rising. But some will spend it on living costs and expensive long-term care, leaving less for heirs. When they die, many will leave their money to their spouses, who are often in their same generation. This year, around $1.3 trillion is expected to be passed onto spouses, compared with about $2 trillion to heirs in Gen X and younger generations, according to projections from research firm Cerulli Associates.

Takeaways by Macro Roundup® AI

  1. Bequeathable wealth surged to 424% of GDP in 2021 from 256% in 1997, with 97% of gains concentrated in households.
  2. The wealthiest 10% of households age 55+ captured 75% of total bequeathable wealth gains since 1997, resulting in widening inequality.
  3. Boomers accumulated $1tn+ in wealth during Q4 alone, outpacing all other generational groups, as stock and business valuations drive outsized.

Related Articles:

  • A Preliminary Report on Taxing the Great Wealth Transfer: Revenue and Distributional Effects of Taxes on Estates, Inheritances, and Unrealized Capital Gains at Death — Bequeathable wealth/GDP has risen from 256% to 424% over 1997- 2021, but the current estate tax law yields ~$0 revenue. @BrookingsInst researchers propose an…
  • Is Inherited Wealth Bad? — Existing data show ~80% of private wealth in early 20th-century Europe was inherited. In France and Sweden that fell to ~40% by 1975, but has since risen. In…
  • How To Get Rich in 2025 — As baby boomers die, inheritances as a share of US output are over 10% which is just off a post-WW II high. For every $100 paid in wages, the dead leave behind…
  • Inequality
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Has Generational Progress Stalled? Income Growth Over Five Generations of Americans

AI Summary. Generational income growth in the United States has slowed across five successive generations, with each cohort earning less relative to the previous one by their late 30s.

Kevin Corinth and Jeff Larrimore Demography
Date Posted:
April 23, 2026
Is Database:
Database
Is Important:
Important

As measured by the 36–40 cohort across generations, Americans’ real market income has continued to rise but at a slower pace. Accounting for taxes and transfers partially offsets the slowdown in the growth of market income.

Core argument: Income growth for Americans in their late 30s declined 50% from the Silent Generation (born 1928–1945) to Millennials (born 1981–1996).

We zoom in on a focal age range in peo­ple’s late 30s—an age at which we observe the five gen­er­a­tions from the Greatest Generation (born 1901–1927) through the Millennial Generation (born 1981–1996)—and assess both whether gen­er­a­tional prog­ress is positive and the extent to which the rate of growth is speeding up or slowing down. Focusing first on median market income, there are two notable takeaways that apply for both the individual/couple and the household sharing units.The first is that generational progress has clearly slowed since the Baby Boom Generation, although it remains positive. Second, despite the perception that slowing generational progress is a recent phenomenon, the substantial slowdown did not start with Millennials but began a generation earlier with Generation X. Looking at the patterns formed in household market income by generation, the income of Baby Boomers in their late 30s was 31% above that for similarly aged adults in the Silent Generation. Progress slowed substantially for Generation X—their incomes increased by 10% relative to Baby Boomers—and then ticked up for Millennials, whose incomes rose by 15% relative to Generation X. Although market income is an important indicator of progress, it does not reflect the full set of resources that individuals have available for consumption. The slowdown in generational progress is softened when accounting for taxes and transfers.

Takeaways by Macro Roundup® AI

  1. Income growth for Americans in their late 30s declined 50% from the Silent Generation (born 1928–1945) to Millennials (born 1981–1996).
  2. Wage growth deceleration across five generations results in widening inequality, with top earners capturing disproportionate income gains while median earners.
  3. Workforce participation shifts and wage stagnation for Millennials vs. prior generations lead to delayed wealth accumulation and reduced intergenerational economic.

Related Articles:

  • The American Dream Is Not a Coin Flip, and Wages Have Not Stagnated — .@swinshi argues that 72% of 40-year-olds exceed their parents’ family income excluding government benefits, using his preferred inflation measure and…
  • Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility — Raj Chetty @OppInsights finds that a white child born into the bottom household income quintile in 1992 had a 29.7% chance of remaining there, up from 24.9% in…
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