Racism, Prejudice, and Finances – The Ugly Truth

Today’s post is about a very difficult subject for most of us to discuss: financial racism and prejudice. It’s not the standard “save and earn some money” post and if you aren’t in the mood for a frank, tough read, I’d advise you here to skip to another blog today. But if you are still here, read on.

Financial racism is rampant in the U.S., and it has a profound economic and social effect. Being aware of systemic racism is the first step to stopping it.

Racism and prejudice in America is in our faces every single day whether we choose to recognize it or not. It’s not just politics and it’s not just finances, it’s not just social and it’s not just religious. It’s all of the above.

It sometimes is blatant like when slurs are used or beatings and shootings occur, but more often than not, it is also very, very subtle. Racism is part of just about any and every stitch of fabric woven into our everyday lives whether we admit it or not. It’s fact, not fiction or just history. It’s now and it’s real.

I am white and I am Jewish. I have experienced prejudice in its ugly form myself, but yet I have been shielded from it more often than not in my lifetime. Sometimes though, like recently, I can’t hide my feelings. I know that I experience white privilege and have never had to deal with the struggle of racism. We can’t talk about how to address any kind of prejudice and racism if we’re still fighting the notion that it doesn’t exist and that it doesn’t have dramatic impact including real economic impact on its victims.

The “Official” View About “Financial Racism”

President Trump and many others believe that they know the cure for America’s racial tensions: more jobs. In Trump’s view, everyone will be happy once they are working and “they will be making a lot of money, much more than they ever thought possible”. Unfortunately, it’s not that simple. Jobs are not magic fairy dust that can cure everything and racism is one of those things.

Racism is a deeper problem than just economics. We can see that because even in periods of strong employment and economic growth, the United States and other nations have still experienced ugly flare ups of hate crimes and riots. It has happened over decades and centuries.

If prosperity and wealth were the actual cure, then we wouldn’t be experiencing anything close to what we know happens every day.

Jobs Don’t Stamp Out Racism

Look at what’s happening right now in our country. The economy is in great shape. Unemployment is a mere 3.7%, the lowest level since 1970. Job openings in the United States are near record highs, yet people still walked through the streets of Charlottesville last year carrying Nazi flags and shouting at people of color (POC) and Jews, carrying assault weapons, and even murdering someone senselessly in the streets.

They did this even though working-class whites still have a huge advantage over minorities in getting jobs, earning higher wages, and owning homes. Last week, we saw a mass shooting of Jews while in prayer at their local temple. We saw the murders of two black people in a grocery store in Tennessee as well. We’ve seen so many racially-based church bombings, murders, and crimes that it’s almost impossible to count. Jobs alone are not enough to bridge our very deep racial divide.

Oversimplified?

I think we tend to think that there are only two races of people in our America, “whites” and everyone else, the “us” versus “them” mentality. Truth be told, we have so many races blended here in the U.S. today that you’d be hard pressed to come up with a list that included all of them as it would be just plain impossible to cover them all.

White people have always had more privilege than any others do since the days that the pilgrims first stepped on shore at Plymouth Rock and viewed the Native Americans as inferior to them and called them “savages”. That was in spite of their attempts at friendship and the sharing of their special skills and talents at adapting to life in the new continent. The settlers brought their prejudices with them on their long journey and ironically, prejudices were the reason that they left England in the first place. Does that make any sense?

Money and Its Role in Racism

The major area that we are looking at today is wealth. Race, wealth, and life opportunities are all intertwined in the United States. Today, despite all the laws on the books, white and non-white communities are still very “separate and very unequal” and that gap continues to grow. Whether it’s in housing, employment, or anything else where power plays are made and choices based upon what best suits the “chooser”, prejudices continue to occur.

Whites have twice as much wealth as non-whites. The vast racial gap in wealth is the product of centuries of U.S. public policy both official and unofficial. Disadvantaged groups have found it much harder to make economic progress and more often than not are concentrated in the least desirable jobs. The so called “invaders” coming to the U.S. as I write this are a prime example of that.

The Caravan

Ironically, the “caravan army of invaders” that are mentioned daily heading here to the U.S. are not invaders. In fact, all they want is safety from their life-threatening experiences and work and that isn’t an invasion or stealing any jobs from Americans. In fact, it’s precisely the opposite. It’s going to fill jobs that Americans actually don’t want like farm workers, housecleaners, and landscapers just to name a few of the low paying jobs, with their insecurity and all. They’re willing to start at the very bottom for even the slimmest of chances to gain some safety and a chance at prosperity.

Institutional Racism – A Real American Hypocrisy

But there is more than just the obvious racism, namely, institutional racism in housing, labor, and lending.

The deregulation of the lending market resulted in systemic discrimination against people of color and the poor, who pay more for credit. Those who live paycheck to paycheck borrow just to make ends meet, depending increasingly on things like payday lending, aka “legal loan sharks” and check cashing stores that prey on these poorer communities. Blacks and Latinos were steered into risky, costly, and sketchy subprime mortgages at more than twice the rate of whites with the same income. The foreclosure crises of the Great Recession wiped out what little wealth many of these families had, placing a stranglehold on the ability of minority communities to build their wealth.

It Wasn’t Too Long Ago That a Lot of People Were Talking About a Post-Racial America

In 2008, we elected a black president for the first time, and then went ahead and re-elected him four years later and the country was feeling pretty good about itself because of it. While Barack Obama’s presidency was indeed a profound and meaningful mark of true progress, racism, of course, never really went away. The presence of a black president, baseball star, or movie-franchise superhero being a minority however welcome and exciting it is, cannot reverse centuries of racial injustice. In fact, that racism that is built into every level of our society will actually surprise you.

Racism at Every Level of Society

Racism that infects the very structure of our society is called “systemic racism”, and at first glance, it may be very difficult to detect.

Since the election of Donald Trump, hate crimes have been on the rise. According to published statistics, the increase reported by the ADL, the Anti-Defamation League, is well over 50% in numbers of incidences.

White supremacists have been emboldened. Anti-immigrant rhetoric has intensified. We do condemn these awful examples of prejudice and bias and hate, but systemic racism is something different. It’s less about violence or burning crosses than it is about everyday decisions made by people who may not even think of themselves as racist.

As sociologist Eduardo Bonilla-Silva, an American political sociologist and professor of sociology at Duke University has said,

The main problem nowadays is not the folks with the hoods,
but the folks in suits.

Systemic racism persists in our schools, offices, court system, police departments, and elsewhere. Why? Think about it: when white people occupy most positions of decision-making power, people of color have a difficult time getting a fair shake, let alone getting ahead.

Call It Fear or Call It Stupidity, But Call It Out

We all have to do a better job of calling out systemic racism. Here are some areas where we know that it’s real and has to change.

Wealth – Whites control and hold an imbalance of 90% of the national wealth.

Employment – You can’t build wealth without steady and rewarding jobs but minority unemployment has been consistently twice that of whites over the past 60 years, no matter whether the economy is up or down and that has to change.

Education – From preschool to colleges, consider that minority children are disadvantaged nationwide and their opportunities and choices are more limited.

Criminal Justice – One shocking stat is that 70% of those who are incarcerated are non-white making up an overwhelming percentage of the prison population.

Healthcare – A recent study found that a majority of doctors and medical facilities have “unconscious racial biases” when it comes to their minority patients. Minorities are far more likely than whites to lack access to emergency medical care.

Housing – Redlining, essentially barring minorities from sharing in the American Dream, was officially outlawed in the 1960s, but the practice has really never gone away. In fact, during the Great Recession, banks routinely and purposely guided minority home buyers toward subprime loans. People of color are told about and shown fewer homes and apartments than whites. Minority home ownership is now at an all-time low.

Surveillance – If you’re white, you don’t usually need to worry about being monitored by the police. If you are a person of color, you do.

What You Can Do

Do you think about this subject and see it as frequently as it occurs? What can you do to stop racism?

You can’t do it alone, that’s for sure and it’s not going away soon or easily. But you can make a beginning. Hold yourself to a higher standard and hold others too. Practice behaviors that eliminate prejudices. Vote for progress and against the status quo. Don’t always put your own interests first; recognize that a healthy society means everyone is happier and healthier.

I don’t pretend to have all the answers, but this 10 Simple Ideas to Eliminate Racism and 10 Simple Ways White People Can Step Up to Fight Everyday Racism sound like a good start to me. And if you’re looking to broaden your perspectives on personal finance, the Rockstar Finance directory allows you to filter blogs by different races (as well as gender, age, and more).

What ways can you think of to end racism? How do we help everyone have an equal chance to succeed?

About Gary Weiner @ Super Saving Tips

Over the last 45 years I've worked in retail (department stores and supermarkets) and financial planning. In addition, I am a shopper, born and bred, who enjoys the challenges of finding the best items for the best prices. When I'm not busy saving money or writing here at Super Saving Tips, I enjoy baseball, music, and classic movies. I am retired and live in New Jersey with my wife.
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