# Why do blacks and hispanics have such low net worths compared with whites? **URL:** \ **Category:** Great Debates\ **Created:** [February 12, 2014, 1:05am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108 "2014-02-12T01:05:38Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![monstro](https://avatars.discourse-cdn.com/v4/letter/m/ba9def/32.png) [@monstro](https://boards.straightdope.com/u/monstro)\ **Post date:** [February 12, 2014, 9:09pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/41 "2014-02-12T21:09:20Z")
> [@ITR\_champion](#): > > Okay, let’s with [The Painful Truth About Affirmative Action](http://www.theatlantic.com/national/archive/2012/10/the-painful-truth-about-affirmative-action/263122/). > > The single biggest problem in this system – a problem documented by a vast and growing array of research – is the tendency of large preferences to boomerang and harm their intended beneficiaries. Large preferences often place students in environments where they can neither learn nor compete effectively – even though these same students would thrive had they gone to less competitive but still quite good schools. > > We refer to this problem as “mismatch,” a word that largely explains why, even though blacks are more likely to enter college than are whites with similar backgrounds, they will usually get much lower grades, rank toward the bottom of the class, and far more often drop out. Because of mismatch, racial preference policies often stigmatize minorities, reinforce pernicious stereotypes, and undermine the self-confidence of beneficiaries, rather than creating the diverse racial utopias so often advertised in college campus brochures. > > The mismatch effect happens when a school extends to a student such a large admissions preference – sometimes because of a student’s athletic prowess or legacy connection to the school, but usually because of the student’s race – that the student finds himself in a class where he has weaker academic preparation than nearly all of his classmates. The student who would flourish at, say, Wake Forest or the University of Richmond, instead finds himself at Duke, where the professors are not teaching at a pace designed for him – they are teaching to the “middle” of the class, introducing terms and concepts at a speed that is unnerving even to the best-prepared student. > > The student who is underprepared relative to others in that class falls behind from the start and becomes increasingly lost as the professor and his classmates race ahead. His grades on his first exams or papers put him at the bottom of the class. Worse, the experience may well induce panic and self-doubt, making learning even harder. I appreciate the cite and the information it provides. The message I take away from it isn’t that AA doesn’t work. The message is that it should be more thoughtfully applied. It doesn’t make sense to drop a kid scoring in the 50th percentile in the same math class as a kid scoring in the 99th, and expect both of them to have the same rewarding college experience. But if the gulf between them is less vast (say, 80th versus 99th), then their outcomes will be more alike. Malcolm Gladwell also talks about this in his latest book, except that his treatment of the topic is more general and distilled down to the question of whether it’s better to be a small fish in a big pond versus a big fish in a small pond. For the college students who are full of confidence and natural talent, they will do well in the former situation. But for kids who lack confidence and don’t “shine” in any spectactular way, being a big fish in a small pond is probably a lot better for them. And this applies to anyone, not just black students. But because black students on average carry a [burden](http://en.wikipedia.org/wiki/Stereotype_threat) that most other students do not carry, the benefits of the “big fish” approach are even more poignant. Despite my ambivalence about AA, I think having it is better than telling ourselves that the playing field became level in 1968, so let’s not think about inequality anymore. Maybe if we were talking about something that happened hundreds of years ago, this would make sense. But my parents were tax-paying adults in 1968. Why wouldn’t the legal discrimination they faced back then be reflected in their present-day outcome, as well as that of their children and grandchildren? We can strive for equality of opportunity as much as we possibly can, and I think this is definitely what we should be doing. But considering that this is a very lofty goal that only seems to be getting loftier, AA is decent stop gap. Definitely far from perfect, but still better than nothing. And it seems to me that a lot of anti-AA folks want “nothing”. I’m just not down for that. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [February 12, 2014, 10:35pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/42 "2014-02-12T22:35:26Z")
> [@davida03801](#): > > As I said it is the cynic in me that made that comment, but think of it in another way. > > Medieval lords really did not want the serfs rising up too much, as they were needed to do all the grunt work of the princedom, work the fields, common labor and cannon fodder when needed. The serfs remain poor and down trodden and the lords can stay in the high towers. > > Have things changed all that much ? > > The lords have changed, but in the end they have the same common interest to keep themselves in the high towers. Meet the new boss, same as the old boss. As George Carlin would say, keep people smart enough to run the machines but not smart enough to realize how badly they are being fucked. However I don’t think that is what is going on, I don’t think this is an attempt to keep people poor and desperate. What is surprising about this situation is that incomes for blacks has gone up, but their wealth really has not. Or the fact that hispanic households average about 9k more in annual income but their wealth is barely $2500 total higher. A better contemporary example of what you describe is how we use culture war issues and political wedge issues to distract people from the fact that our country has become a plutocracy. ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [February 12, 2014, 11:19pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/43 "2014-02-12T23:19:34Z")
> [@Human\_Action](#): > > Ok. Why? Will they not vote for the party that helped lift them out of poverty? Will others not vote for the party that slashed crime by attacking poverty? What’s the upside for having poor people here? One argument is that it keeps a hungry desperate workforce which will settle for lower wages and be grateful for it. ---
**Author:** ![Bill\_Door](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@Bill\_Door](https://boards.straightdope.com/u/Bill_Door)\ **Post date:** [February 12, 2014, 11:19pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/44 "2014-02-12T23:19:51Z")
> [@Fuzzy\_Dunlop](#): > > I think that’s pretty clearly what **nevadaexile** is suggesting, but I agree it’s just not how it works. White racists don’t like living _near_ black people. As long as **nevadaexile** is the one moving his home isn’t going to be devalued on account of his blackness. I have been in a bar where the owner threw out a beer glass that a black person drank out of and you’re telling me that a home’s value can’t be devalued because of a black owner? If only 5 or 10 out of a hundred people won’t enter a bid on a home because of a black owner it decreases the value. ---
**Author:** ![you\_with\_the\_face](https://avatars.discourse-cdn.com/v4/letter/y/ecccb3/32.png) [@you\_with\_the\_face](https://boards.straightdope.com/u/you_with_the_face)\ **Post date:** [February 12, 2014, 11:32pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/45 "2014-02-12T23:32:23Z")
> [@monstro](#): > > I’m not saying that any of this happens. I can’t find evidence that it happens. It’s just that what **nevadaexile** says isn’t _that_ unfathomable to me. It’s not unfathomable to me either. I’m under no impression that my risk for being taken advantage by a used car dealer is exactly the same as a man’s. I already know the stereotypes and assumptions that people make about women and their ability to negotiate anything car-related. It’s not even subconscious, these particular biases. Knowing this is why I don’t like going car shopping by myself. So I’m amused that anyone would be incredulous at the idea that housing and race would immune from the same process. If subconsciously you’re thinking a black seller bought his house using a subprime loan and he’s borderline bankrupt, sleeping on the floor because his bed got repossessed, you will not offer him the same amount of money you would a white guy who you subconsciously assume is financially savvy, smart, and not in a desperate hurry to sell because he has cash in the bank to pay for his new penthouse apartment downtown. Of course I’m exaggerating here. But this is how bias works, people. ---
**Author:** ![nevadaexile](https://avatars.discourse-cdn.com/v4/letter/n/eb8c5e/32.png) [@nevadaexile](https://boards.straightdope.com/u/nevadaexile)\ **Post date:** [February 12, 2014, 11:32pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/46 "2014-02-12T23:32:50Z")
> [@aldiboronti](#): > > I’m still not seeing how racism would lower the value of your home. Do you mean that some people would not want a house that was owned by an African-American? I guess maybe with KKK types that may be true but the majority of sane people wouldn’t care at all. I can’t believe they would not buy somewhere they liked because there were a few African objets d’art on the wall. Apparently you live in a different country than i do. Realtors often tell people if they are in areas where homes sales are sluggish to put personal pictures away if the owners are not White. While that may mean that someone needs a new realtor, it may also mean that people may not sell their home or that they may get lower offers. Frankly, at 47, I’m really not interested in people who have no idea how it is to be a minority in the United States (especially an African AMerican) telling me that racism doesn’t exist. It has been less than fifty years since the Civil Rights and Voting Rights were passed (read: for through Congress) and George Zimmerman gets away with killing an unarmed Black youth with whom HE provoked a confrontation. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [February 12, 2014, 11:39pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/47 "2014-02-12T23:39:10Z")
> [@Shalmanese](#): > > While I’ve been well aware of the income gap between whites and minorities, I wasn’t aware that the net worth disparity is even more striking. The one causes the other; it’s kind of a [Vimes’ boots problem](http://www.goodreads.com/quotes/72745-the-reason-that-the-rich-were-so-rich-vimes-reasoned). > [@](#): > > “The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. > > Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. > > But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. > > This was the Captain Samuel Vimes ‘Boots’ theory of socioeconomic unfairness.” Put another way, the lower your income, the nearer you are to living from paycheck to paycheck, sometimes to the point of having to take out payday-advance loans; getting ahead is impossible when you’re constantly struggling just to keep from falling off the treadmill. ---
**Author:** ![monstro](https://avatars.discourse-cdn.com/v4/letter/m/ba9def/32.png) [@monstro](https://boards.straightdope.com/u/monstro)\ **Post date:** [February 13, 2014, 12:55am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/48 "2014-02-13T00:55:00Z")
The GI Bill was [Affirmative Action](http://www.nytimes.com/2005/08/28/books/review/28KOTZL.html?pagewanted=all) for white people: > [@](#): > > Katznelson reserves his harshest criticism for the unfair application of the Servicemen’s Readjustment Act, known as the G.I. Bill of Rights, a series of programs that poured $95 billion into expanding opportunity for soldiers returning from World War II. Over all, the G.I. Bill was a dramatic success, helping 16 million veterans attend college, receive job training, start businesses and purchase their first homes. Half a century later, President Clinton praised the G.I. Bill as ‘‘the best deal ever made by Uncle Sam,’’ and said it ‘‘helped to unleash a prosperity never before known.’’ > > But Katznelson demonstrates that African-American veterans received significantly less help from the G.I. Bill than their white counterparts. ‘‘Written under Southern auspices,’’ he reports, ‘‘the law was deliberately designed to accommodate Jim Crow.’’ He cites one 1940’s study that concluded it was ''as though the G.I. Bill had been earmarked ‘For White Veterans Only.’ ‘’ Southern Congressional leaders made certain that the programs were directed not by Washington but by local white officials, businessmen, bankers and college administrators who would honor past practices. As a result, thousands of black veterans in the South – and the North as well – were denied housing and business loans, as well as admission to whites-only colleges and universities. They were also excluded from job-training programs for careers in promising new fields like radio and electrical work, commercial photography and mechanics. Instead, most African-Americans were channeled toward traditional, low-paying ‘‘black jobs’’ and small black colleges, which were pitifully underfinanced and ill equipped to meet the needs of a surging enrollment of returning soldiers. I’m gonna say it again, just for emphasis: With a history like this, it should be no shock at all that black people do not have the same amount of wealth that white people have. It’s actually crazy that anyone would not know why this is the case since the causes of the disparity happened within living memory. It’s like wondering why the guy you saw hit by a car is still walking with a limp a couple of days later. ---
**Author:** ![wonky](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wonky/32/393_2.png) [@wonky](https://boards.straightdope.com/u/wonky)\ **Post date:** [February 13, 2014, 1:04am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/49 "2014-02-13T01:04:16Z")
> [@monstro](#): > > I’m not saying that any of this happens. I can’t find evidence that it happens. It’s just that what **nevadaexile** says isn’t _that_ unfathomable to me. Same here. I don’t know that it happens exactly that way, but it wouldn’t shock me if it did. And it wouldn’t shock me if all of the biases necessary for that sort of judgment are completely invisible (willfully, in some cases) from those who bear them. ---
**Author:** ![Human\_Action](https://avatars.discourse-cdn.com/v4/letter/h/ac91a4/32.png) [@Human\_Action](https://boards.straightdope.com/u/Human_Action)\ **Post date:** [February 13, 2014, 3:22pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/50 "2014-02-13T15:22:43Z")
> [@gigi](#): > > One argument is that it keeps a hungry desperate workforce which will settle for lower wages and be grateful for it. And how do government benefits keep people hungry and desperate? Sure seems to me that they do the opposite. Yank Section 8 subsidies, for instance, and there’s a lot more people with nowhere to live and willing to work for anything. > [@nevadaexile](#): > > Frankly, at 47, I’m really not interested in people who have no idea how it is to be a minority in the United States (especially an African AMerican) telling me that racism doesn’t exist. It has been less than fifty years since the Civil Rights and Voting Rights were passed (read: for through Congress) and George Zimmerman gets away with killing an unarmed Black youth with whom HE provoked a confrontation. He got away with it because he couldn’t be proven beyond a reasonable doubt to have committed a crime. That’s how the system works. His acquittal is a terrible example of society’s racism, there are much better ones available. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [February 16, 2014, 9:53pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/51 "2014-02-16T21:53:50Z")
> [@verificationist](#): > > But I would still say that culture probably has something to do with it. I have noticed that only quite well off people in my country tend to think about long term investments, whereas people with an Anglo Saxon background do it even if their incomes are on the lower levels. Careful: some of the differences you’re attributing to being “anglo” are more of an “european” thing from the point of view of this Spaniard who used to live in the US. Immigrants often have much more of a saving culture than Americans, but also tend to have bigger families, lower incomes, and part of that family is “back home” and gets money sent. The first 3 years I was in the US I made 12K (an income Americans with degrees similar to mine despised, then complained that the folks with graduate degrees were all foreigners who’d been able to live and even save on that amount) and the trip back home for Christmas would eat about 1K. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [February 16, 2014, 10:35pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/52 "2014-02-16T22:35:15Z")
> [@nevadaexile](#): > > Where do you live where people are able to move and then show their home? Most people have to show their homes while still living there. And please don’t add anything to my answer as “general clutter” is your term and not one which I used, nor would have. You never heard of [staging a home for sale](http://homebuyinginstitute.com/staging/)? ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 17, 2014, 12:47am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/53 "2014-02-17T00:47:25Z")
More of Black wealth is tied up [in the home](http://www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/). Home values have been hit harder and not recovered as well. Some of that is that the home investment bucket gets filled first but some is cultural. As a group Blacks [invest less](https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CDkQFjAB&url=http%3A%2F%2Fwww.arielinvestments.com%2Frepository%2Ffunc%2Cdownload%2Ffilecatid%2C197%2F&ei=lE0BU4qUI6LCyQGSkoGQAQ&usg=AFQjCNEG_P15I4ZELxcqVjFjUmktSU33KA&sig2=OT1hBtro9-1IVSWGnCLteA&bvm=bv.61535280,d.aWc) when matched on other attributes. > [@](#): > > Even when all other significant demographic factors are held constant (age, income, gender, education, and so on), Whites are nearly twice as likely as African-Americans to be investors … ---
**Author:** ![even\_sven](https://avatars.discourse-cdn.com/v4/letter/e/dfb087/32.png) [@even\_sven](https://boards.straightdope.com/u/even_sven)\ **Post date:** [February 17, 2014, 2:50am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/54 "2014-02-17T02:50:52Z")
> [@msmith537](#): > > You never heard of [staging a home for sale](http://homebuyinginstitute.com/staging/)? And this is another one of those “it’s expensive to be poor” moments. Staging your home can bring in a large return, but it involves storing old things, buying new things, and making an upfront investment in paint, etc. It’s a smart thing to do, but it’s not realistically possible for many people. ---
**Author:** ![ThisUsernameIsForbidden](https://avatars.discourse-cdn.com/v4/letter/t/b4bc9f/32.png) [@ThisUsernameIsForbidden](https://boards.straightdope.com/u/ThisUsernameIsForbidden)\ **Post date:** [February 17, 2014, 4:04pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/55 "2014-02-17T16:04:34Z")
net worth is the amount of wealth remaining after debt so, for example, if I own 2 billion worth of property but owe 1 million in mortgages, my net worth is 1 million assuming the study is of US population, I’d say the reason is historical, not based on anything innate about the ethnicities. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [February 17, 2014, 5:29pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/56 "2014-02-17T17:29:01Z")
> [@ThisUsernameIsForbidden](#): > > so, for example, if I own 2 billion worth of property but owe 1 million in mortgages, my net worth is 1 million Not sure I agree 100% with your arithmetic. Regards, Shodan ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [February 17, 2014, 6:23pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/57 "2014-02-17T18:23:07Z")
> [@Shodan](#): > > Not sure I agree 100% with your arithmetic. Well, his math in 99% right and the other ten percent isn’t important. ---
**Author:** ![tapu](https://avatars.discourse-cdn.com/v4/letter/t/49beb7/32.png) [@tapu](https://boards.straightdope.com/u/tapu)\ **Post date:** [February 17, 2014, 6:26pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/58 "2014-02-17T18:26:37Z")
OP– The real reasoning behind Affirmative Action sheds light on this topic. ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [February 17, 2014, 7:57pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/59 "2014-02-17T19:57:46Z")
> [@tapu](#): > > OP– > The real reasoning behind Affirmative Action sheds light on this topic. Yep, it sure does. What was it again? ---
**Author:** ![tapu](https://avatars.discourse-cdn.com/v4/letter/t/49beb7/32.png) [@tapu](https://boards.straightdope.com/u/tapu)\ **Post date:** [February 17, 2014, 8:13pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/60 "2014-02-17T20:13:43Z")
Here you go: [http://dailyprincetonian.com/opinion/2013/12/the-reasoning-behind-affirmative-action/](http://dailyprincetonian.com/opinion/2013/12/the-reasoning-behind-affirmative-action/) That was just the very first hit on google but the source seems plausibly reliable. You will of course want to choose a source you have confidence in. None are terribly long reads but there are points that need some thinking out. At least by those of us who once thought it was all much “simpler.” If you want to find your own sources, go to google, and in the box, type Reasons Behind Affirmative Action. You’ll have plenty to choose from. \>:-) [Previous page](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108.md?page=2) [Next page](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108.md?page=4)