Extreme economic inequality is the cause and the consequence of racial problems in the United States.
But how can you possibly begin to try and solve this problem if you can’t see it?
A new study out of Yale University shows just how much white American society overestimates the level of economic equality between racial groups in America more than others. Participants in this new study estimated that things are really pretty fair for economic outcomes in the United States (and getting more fair every decade) and guessed that when talking about accumulated wealth, for every $100 a white household has, a black household has $80. In other words, they acknowledge a little gap … but they feel like it’s closing.
In reality, according to the United States Census Bureau’s Current Population Survey, the difference is $100 to $5.
“For us, maybe the biggest thing, is that Americans, in general, are shockingly optimistic about the progress our country has made towards racial equality in the economic domain, at least,” Michael W. Kraus, assistant professor of organizational behavior at Yale University, tells Madison365. “Americans think that we have made it there in ways that economic data suggest that we have not. There’s a narrative of progress that doesn’t match reality and that narrative of progress is really powerful in shaping people’s beliefs.”
Kraus, along with fellow Yale researchers Jennifer A. Richeson, the Philip R. Allen Professor of Psychology at Yale; and Julian M. Rucker, a doctoral candidate at Yale, recently released the study “Americans misperceive racial economic equality” where they compared beliefs about racial economic equality with the reality estimated by economic population data.
They found that Americans think our society is much, much fairer in terms of how wealth and income are shared across racial groups than what the numbers indicate. These overly optimistic perceptions may help explain why the wealth and income gaps persist.
The gap between estimate and reality was largest for a question about household wealth. The study asked people, for instance: “For every $100 earned by an average white family, how much do you think was earned by an average black family in 2013?” “The actual data for 2013 shows us that for every $100 a white family has in wealth, a black family has $5,” Kraus says. “There’s a huge gap between the estimates and the actuals.”
In other words, study participants were way, way off.
“We took economic data that was available for the federal government and current population survey and we compared that data as sort of a benchmark for what is actually going on in society to a sample of Americans’ estimates of what is going on,” Kraus says. “We give them information on what income is and what wealth is and we say: Try to estimate these gaps … and then we just look at the difference.”
The study looked at white and black Americans and also high-income and low-income Americans. High-income White Americans’ overestimates of current racial economic equality were larger than those generated by low-income white Americans, and by black Americans across the income distribution.
“High-income white Americans, in particular, are the most optimistic about current racial equality. They see much more equality than the other groups – relative to all black Americans and all low-income white Americans,” Kraus says. “We chalked that up to a couple of things that the high-income whites are experiencing that the other groups are not. First, they are towards the top of a hierarchy that benefits them, so it’s hard to think of that hierarchy as benefiting them through luck, through chance, through discriminatory forces that they benefit from. That’s an uncomfortable mental state. So, they are more likely to just push that away.
“The second piece is that they are living in spaces that are non-diverse: economically or demographically,” he adds. “So they have no information about how other people live.”
These misperceptions fit conveniently with the idea of the American dream and the bootstrap mantra — that every individual, regardless of background, can succeed with talent and hard work. They also lead to white Americans – across the political spectrum – thinking that quite a bit of racial progress has been made and not much work has to be done to fix it.
“We’re only motivated to make changes for problems that we know exist,” Kraus says. “And Americans seem to not know that we have this racially patterned inequality. And if you don’t know it, how are you going to even begin to have the policy discussions necessary to change this kind of inequality? Thinking that there is widespread progress towards racial equality leads people to think that racial progress is happening naturally and this problem is going to go away on its own over time.
“And, it’s actually not. It’s going to take effort. It’s going to take policy changes. It’s going to take these topics becoming part of the larger political discussions that our country has,” he adds.
The study expands upon the history of what has caused the huge chasm in wealth stating the following:
An important, often overlooked, facet of economic inequality in the United States is that it is a product of historical and present-day forms of racism—labor, housing and other policies and practices — that have systematically disadvantaged racial/ethnic minorities in their pursuit of economic opportunities. One result of these historical and ongoing forces is a vast and persistent economic disparity between black and white families in the United States, of which Americans seem largely unaware. The present research documented both the pervasiveness and magnitude of this general lack of awareness and relevant socio-structural correlates and began to explore the psychological processes and motives that promote or undermine awareness and/or acknowledgment of societal racial economic inequality.
“I think we think of those bell-weather events from the civil rights movement and of Barack Obama’s presidency as strong indicators of racial progress in society and then we ignore things like redlining that still exists. Like stark segregation. Like tax plans that benefit only wealthy Americans that we have these days,” Kraus says. “All of these things favor people who already have wealth and exacerbates this inequality that we are talking about.”
In the final study, they ask people to actually think about America that might be a little different than the one they thought of originally – where discrimination based upon race still exists. What are your estimates now?
“People’s estimates come back down to closer to reality. They are still inaccurate, but less so,” Kraus says. “We think that this kind of mindset is a path forward in that you can’t think of racial inequality solving itself, you have to think of it as related to conditions of discrimination, policies that discriminate. And if you think of those things as connected and you bravely confront race in our society and how it has existed in the past and how it exists now, then you can begin to see things accurately and begin to realize that it is a problem. That’s the place to start.”
This profound misperception of, and unfounded optimism regarding, societal race-based economic equality … is this a media problem?
“Well, sure … they play a part. But I think scientists need to study these questions and do a better job communicating how much of a problem this is. I think economists need to study the policies that could reduce racial inequalities,” Kraus says. “Then, the people who study these policies need to get those policies into the hands of our political leaders. They need to get them out into the media. We need to have discussions about this with regular people who are doing the voting. Through all these means.
“Thinking like a psychologist, I can see why people don’t want to think about this,” Kraus adds. “But it’s so inconsistent about our beliefs about America. These data are totally inconsistent with what we think America is like and coming back to reality is crucial to actually living in a country that we would want to live in that is consistent with what we believe this country is supposed to be like.”
