Editor's note: This is an excerpt of Planet Money's newsletter. You can sign up here.
In summer of 1967, African Americans protested, marched, and rioted in cities across the country. The unrest convinced President Lyndon Johnson to set up the Kerner Commission, which spent about six months doing research, visiting slums, and holding hearings. In 1968, they published a provocative report that civil rights leader Jesse Jackson recently called "the last attempt to address honestly and seriously the structural inequalities that plague African Americans."
"Segregation and poverty have created in the racial ghetto a destructive environment totally unknown to most white Americans," the Kerner report said. "What white Americans have never fully understood — but what the Negro can never forget — is that white society is deeply implicated in the ghetto. White institutions created it, white institutions maintain it, and white society condones it."
Fifty years later, Americans are taking to the streets again, protesting systemic inequities that haven't gone away. How much has really changed?
In many ways, America has made progress toward racial equality since the late sixties. Black Americans have, for instance, seen huge gains in education, in political and media representation, and in infant mortality rates. But, in many ways, Black Americans haven't made much economic progress, especially in relative terms. Even before the pandemic and economic collapse — which are disproportionately hurting the black community — the national black poverty rate of 22% was more than double the white poverty rate of 9%. While there is a larger black middle class than 50 years ago, the median black household has only a tenth of the wealth of the median white household. And every year, black workers earn, on average, 25% less than white workers.
"Across a number of indicators, racial economic progress has actually slowed or reversed over the last century," says Ellora Derenoncourt, an economist at Princeton University. Her research finds that the earnings gap between black and white workers has remained pretty much the same since the mid-to-late 1970s. "Over the past 70 years, this gap closed significantly only once," she says, citing her recent study with Claire Montialoux. That, they find, is ironically due to actions taken before the Kerner Commission, when the federal government took steps to raise the minimum wage for millions of black workers. As part of the Fair Labor Standards Act of 1966, the federal minimum wage expanded to cover industries where blacks were over-represented, including agriculture, food and hospitality, and nursing homes.
While there have been some gains in income since the Kerner Commission, "in terms of the wealth gap, there's been almost no progress," says UC Berkeley economist Gabriel Zucman, who studies wealth inequality. "The average wealth of African Americans was 15% of the average wealth of whites in 1963 — and it's still around 15% today." A core reason for this stagnation, he says, is continued disparities in homeownership. Much of that is a legacy of racist housing policies, like redlining and exclusionary federal housing assistance. Today, the white homeownership rate is almost 74%, which is much higher than the black homeownership rate of 44% — a rate that is about the same as it was back in 1968.
Segregation And Mobility
According to the research of the Harvard economist Raj Chetty, a leading researcher on social mobility, the racial inequality we see today is inseparable from a problem identified by the Kerner commission fifty years ago: segregation.
"Segregation plays a critical role in driving differences in opportunity by race," Chetty says. "And if anything, it's more important today than it was 50 years ago. American cities are more segregated along certain lines — by income lines, in particular. We still live in an environment — 50 years later — where African Americans are still living in fundamentally different neighborhoods and have access to fundamentally different schools, jobs, and opportunities."
The problem of segregation is especially troublesome when you consider the mountain of evidence Chetty has compiled in study after study, which finds the same thing: "The deep — perhaps the central driver of what determines kids' life outcomes — is the environment in which they're growing up," Chetty says. "Childhood exposure," he says, to healthy environments with low poverty and crime rates, successful role models, good schools, social trust, and two-parent households is a huge boost to the likelihood kids will succeed as adults.
Chetty and his colleagues find the effects of an environment are profound. If kids grow up in a place with lots of innovation in a particular area, like software, they are much more likely to become inventors of new kinds of software. They even find this effect is gender specific. If girls grow up in an area where lots of women are inventing new kinds of pharmaceuticals, they're much more likely to invent new kinds of pharmaceuticals.
The problem for African Americans, Chetty finds, is that — 50 years after the Kerner Commission — they are still, for the most part, growing up in worse neighborhoods, and this has huge effects on their upward mobility. In a recent study, Chetty and his colleagues find that just 2.5% of black kids born in the bottom fifth of the income distribution make it to the top fifth in adulthood, a rate that is four times worse than white kids from a similar class background.
But Chetty sees a glimmer of hope in the data: the racial disparities in mobility are driven almost entirely by black men, not black women. "We're seeing much higher rates of economic mobility for black women — actually somewhat comparable to those for white women." Black women, on average, are still more likely to grow up in poor neighborhoods and be disadvantaged on a number of fronts compared to white women. It's just that when Chetty compares them to white women who grow up in similar class backgrounds, their economic outcomes look similar. The same can't be said for black men.
Black Men In America
Chetty's data shows the problem facing black males is widespread: in 99% of all the neighborhoods in America, black men end up earning less in adulthood than white men even if they grow up in families with similar class backgrounds. This includes rich black adolescents, who are about twice as likely to fall into poverty than rich white adolescents.
This data raises a crucial question for policymakers: what is it specifically about growing up in America as a black male that handicaps them in achieving and maintaining economic success?
Chetty says we're seeing it highlighted in the news now. Black males are discriminated against in our society, by law enforcement, by judges, by employers, by customers, and by strangers walking down the street. It contributes to a cycle where they're less likely to finish high school, go to college, and much more likely to grow up in environments where male role models are absent. "And that's a big issue — partly because of the system of mass incarceration where lots of black men are not present to help raise their kids," Chetty says.
Fifty years ago, the Kerner commission came to the conclusion that America was systematically keeping African Americans down. And, if you look at the institutional racism, the implicit and explicit biases, the stereotypes, and the vicious cycle that continues to rob black males of freedom and opportunity, it seems just as true today.
Did you enjoy this newsletter segment? Well, it looks even better in your inbox! You can sign up here.