La La Land on economic equality

Yale University researchers recently revealed a striking mismatch between perceptions of inequality and actual inequality.  Asked to estimate progress toward black-white economic equality, participants in several studies consistently overestimated racial equality for annual income, wealth, employee benefits, and hourly wages.  “The headline finding,” according to City Observatory, “is that the average respondent thinks that black wealth is about 80 percent that of whites; whereas Census data suggest that black wealth is about 5 percent that of whites.”

As reported by The New York Times, the study’s authors attribute these overestimates of racial economic equality to several factors:  continued economic and racial segregation, unconscious denial of a reality that doesn’t fit our idealized version of a fair democracy, and overgeneralization from other signs of progress toward racial equality (such as passage of civil rights laws and election of a black president). Blacks and whites alike overestimated economic equality, but estimates made by wealthy whites were furthest from the mark.

Although the Yale researchers didn’t collect data on geographic differences in perceptions of racial inequality, we can compare racial economic inequality in King County to national figures.  While the national black/white income gap is substantial ($22,794 in 2016, according to the American Community Survey), it pales in comparison to King County’s whopping 2016 disparity of $45,733.

And the disparity in King County has gotten worse.  Nationally, from 2006 to 2016 median household income grew by about 19% for blacks and for whites, preserving a consistent (and large) racial gap: at both times blacks earned $63 for every $100 earned by whites.  Over the same period in King County, black median income grew by 20%, lagging considerably behind the 36% growth of white median income.  While in 2006 King County blacks earned $56 for every $100 earned by whites, by 2016 the gap had widened, with King County blacks earning only $50 for every $100 earned by whites.

Many King County residents support the goal of achieving economic security for all.  Before we can do that, however, we first need to acknowledge our increasing racial disparities in the face of explosive economic growth.  Only then will we be able to rationally make policy choices that will move our region toward greater equity.

Communities Count has just updated King County data on income by race/ethnicity, and also presents recent national wealth trends by race/ethnicity and national black/white wealth trends for the cohort born between 1943 and 1951 (in their 30s, the mean wealth of whites in this cohort exceeded the wealth of blacks by less than $150,000; by the time they reached their 60s, the difference had grown to more than $1 million).  Other data on economic inequality can be found in a data spotlight, The rising fortunes of the top 1%, and charts on wealth trends by income tier.

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