Chapter Ten of "Race and Racisms: A critical approach" - a discussion of wealth and housing inequality.

1. Class 10: October 31, 2015
Readings
• Chapter 10, Race and
Racisms
• Charles, Camille
Zubrinsky. "The
dynamics of racial
residential segregation."
Annual review of
sociology (2003): 167-
207.

2. Class Goals
• Be able to describe the extent of wealth
inequality in the United States.
• Develop an understanding of the historical
reasons for housing and wealth inequalities in the
United States.
• Develop an understanding of how residential
segregation emerged.
• Develop an understanding of the factors that
perpetuate and exacerbate wealth inequality
today.

3. Wealth and hard
work
• The typical white family
has about ten times the
amount of wealth as
the typical non-white
family.
• Most people who are
well-off believe their
success is due to their
hard work.
• Does working hard
ensure you will be
wealthy?

4. “If wealth were the inevitable result of hard
work…, every woman in Africa would be a
millionaire.” George Monbiot.

5. Wealth Inequality in the United States

6. Median net worth, by race
In 2009,
white
families had
20 times the
wealth of
black
families.

7. Class Goals
• Be able to describe the extent of wealth inequality
in the United States.
• Develop an understanding of the historical
reasons for housing and wealth inequalities in the
United States.
• Develop an understanding of how residential
segregation emerged.
• Develop an understanding of the factors that
perpetuate and exacerbate wealth inequality
today.

8. What are some historical reasons for
wealth inequalities?
• Slavery: How is this related?
– What happened when slavery was over?
• Housing: How is this related?
– Between 1933 and 1978, the U.S. government
enabled over 35 million families to increase their
wealth through housing equity through
government subsidies, policy changes, and tax
incentives. Who benefited?

9. Home equity is largest source of wealth

10. Class Goals
• Be able to describe the extent of wealth inequality
in the United States.
• Develop an understanding of the historical
reasons for housing and wealth inequalities in the
United States.
• Develop an understanding of how residential
segregation emerged.
• Develop an understanding of the factors that
perpetuate and exacerbate wealth inequality
today.

11. Residential Segregation
• Residential segregation emerged in the 1930s
due to:
– Collective racial violence. Why?
– The real estate industry: Racially restrictive
covenants and steering. Why?
– Federal housing programs. Why

12. The 1938 Underwriting Manual of the FHA
stated : “if a neighborhood is to retain
stability, it is necessary that properties shall
continue to be occupied by the same social
and racial classes.”
•

13. Black/white segregation is the highest.
• Dissimilarity index: percentage of individuals who
would have to move to achieve integration.
– In 2000, the black/white dissimilarity index was 67. It
was 80 in Detroit and 76 in Chicago.
• Isolation index: difference between
representation in the city and in a neighborhood.
– The typical black person lives in a neighborhood that
is 45 percent black.

14. Why is segregation problematic?
• High levels of segregation mean that black and
Latino families are more likely to live in poor
neighborhoods.
• Middle class black families have fewer
opportunities to build wealth in housing equity.
– 70% of whites own homes, compared to less than half
of blacks and Latinos.
– Median home equity for whites: $80,000. For blacks, it
is $52,882 and for Latinos: $60,000.

15. Class Goals
• Be able to describe the extent of wealth inequality
in the United States.
• Develop an understanding of the historical
reasons for housing and wealth inequalities in the
United States.
• Develop an understanding of how residential
segregation emerged.
• Develop an understanding of the factors that
perpetuate and exacerbate wealth inequality
today.

16. How is wealth inequality perpetuated
today?
• Restrictive covenants and discriminatory
lending are illegal.
• Why does wealth inequality persist? Why has
it increased?
• The wealth gap between whites and blacks
tripled between 1984 and 2009.

17. How do we explain the black/white
wealth gap?

18. 18% of mortgages blacks and Latinos
have are subprime.
• Subprime: High interest
loans with unfavorable
conditions.
• Predatory lenders:
Payday lenders,
pawnshops, check
cashing services. Where
do we see those?

19. Weekly Question
• Explain the extent to which residential
segregation exists and is harmful to black and
Latino families. Discuss one of the studies
examined by Charles (2003) with regard to
whites’ versus blacks’ preferences for
integrated neighborhoods. Evaluate the extent
to which individual prejudice versus structural
racism plays a role in perpetuating residential
segregation.