Family Finances

Building Barriers Won’t Solve Economic Inequality

March 29, 2017  • William (Bill) Bynum

Watching the nation’s body politic grapple with a widening opportunity gap, and all its concomitant problems, generates in me a complex reaction.

In part, I’m feeling like, “Welcome to my world, America.” Here in Mississippi and across the mid-South, we have endured a socio-political environment that fosters deep disparities in income and wealth for more than a century. And though I would never wish this kind of distress on anyone, I sincerely welcome the heightened interest in developing solutions.

Last week, at the Aspen Institute Summit on Inequality & Opportunity in Washington, DC, I was asked a question that crystalized a truth gleaned from my three decades of working for economic justice.

Gillian White, a senior editor at The Atlantic and the moderator for my panel, “Toxic Inequality,” asked what I thought about all the attention in the post-election period being paid to the plight of working-class white men. As the black man on the panel, the leader of a community-development financial institution in the blackest region of the country, I might have been expected to diminish this white distress. Or at least to demur.

But no. As I told the audience in Washington, pain is pain. If you’re oppressed, you’re oppressed. No purpose is served toward the goal of creating broad prosperity by building barriers between oppressed groups.

What makes this moment feel different in the nation as a whole is that the economic pain is worsening. It feels like we’re going from some infected parts of a body to all-out septicemia. Perhaps we are approaching a moment in the nation where our collective pain is at a level that will push our common interests to the forefront.

Pain is pain. If you’re oppressed, you’re oppressed.

As we learned from fellow panelist Tom Shapiro, director of the Institute on Assets and Social Policy at Brandeis University and author of the new book Toxic Inequality, the wealthiest one percent of households now owns an unprecedented 42 percent of the nation’s wealth.

Americans who do not fall into that rarefied cohort at the top are not only finding it more difficult to improve their economic positions, they are working harder just to stay in place. Perhaps more frustrating is the fact that they see no clear path that will ensure a more prosperous future for their children than they now enjoy.

We know through Shapiro’s research that African-American and Hispanic families on average earn less money and own fewer assets than white families. And that the gap is growing. We also know that the average white family living in an economically distressed community in Appalachia or rural Wisconsin faces obstacles to opportunity that are just as immutable. It is by accepting this fact and using it that we have the best chance to galvanize the political will to invest in people and communities in ways that will improve opportunities for all.

In Congress, Speaker of the House Paul Ryan represents a district with plenty of poor white folks. President Trump put together an electoral college victory in part because of his appeal to white voters in Appalachia and the struggling rust belt.

We cannot ignore that toxic inequality is not equally distributed.

Last year, a group of community-development financial institutions that work with rural white Appalachians, Native Americans in the Dakotas, Hispanics along the Texas-Mexico border and in California’s Central Valley, and African-Americans in the Delta — collectively the most persistently impoverished places in the US — demonstrated the power of this kind of coalition.

This cooperative effort secured commitments from USDA, Bank of America, foundations, and others, totaling more than $600 million to finance facilities that provide health care, education, and other essential public services to ensure communities suffering from entrenched poverty have access to the basic tools needed to ensure a good quality of life and economic mobility.

So, that’s the first part of the answer. We work together. But we cannot ignore that toxic inequality is not equally distributed.

In the last 30 years, we might have expected improvements in the relative positions of African-Americans, given hard-fought gains in civil rights. Shapiro’s research shows that the racial wealth gap has gotten worse. Three times worse.

The past is never dead. It’s not even past
— William Faulkner

After Shapiro and his colleagues dug into the financial lives of more than 200 families over a 27-year period, several big reasons for this emerged. One was the huge difference between the money inherited from family members. While half of white families reported receiving money from older family members, only one in 10 African-Americans reported such help. When African American-families did inherit money, it was, on average, $30,000 less than the average white inheritance.

Here in Mississippi, I am often reminded of William Faulkner’s famous quote about the past not being dead. “It’s not even past,” he wrote.

Just last week, more than half a century after the Supreme Court ruled that it is illegal to operate separate public schools for black children and white children, a Delta school finally complied with a federal order to desegregate its middle and high schools.

Recently, not far from this school district, my organization opened four credit union branches in several small towns. In one of those towns, a black woman used money she received as a gift on her 100th birthday to open the first bank account she had ever had.

While this woman had certainly passed on wisdom to her younger family members, it is unconscionable that she had to wait a century to have access to a financial institution that treated her with the dignity and respect her humanity required, and in which she could have built wealth in a savings account, or accumulated equity through a home mortgage, that she could pass on to loved ones.

In the short time that HOPE has operated in the Delta cluster, we have more than tripled the number of accounts opened and loans made in these communities, and serve nearly half the households in these communities.

As the nation becomes more diverse, our collective interest — regardless of our skin color — is served by ensuring that all people have access to the tools needed to build assets, to support their families, and otherwise give them a chance to start climbing the economic ladder, the opportunity ladder. That is the promise of America.

Bill Bynum, an Institute trustee, is chief executive officer of HOPE, a credit union (Hope Credit Union), loan fund (Hope Enterprise Corporation) and policy center (Hope Policy Institute) dedicated to improving lives in one of the nation’s most persistently impoverished regions. Bynum and HOPE won the John P. McNulty Prize in 2013.

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