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Racial Discrimination Can't Be Solved by Fighting Poverty

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Two recent studies looking into the bankruptcy system have brought attention to the stark racial disparities between the types of bankruptcy options that are offered to blacks as compared to all other races.

One study used data from actual bankruptcy cases to show that when a multitude of financial, demographic and legal factors are controlled for, blacks are twice as likely to file for Chapter 13. Unlike Chapter 7, that essentially eliminates all debt through a less intensive process, Chapter 13 requires greater repayment of debt, costs more in legal fees, and takes longer.
The second study, by the same researchers, was a test to discover why African Americans are disproportionately being offered a less favorable option. The researchers, who suspected that debtors were being "steered" into Chapter 13 or Chapter 7 based on their race, created hypothetical debtors -- a couple named "Reggie & Latisha," who attended an African Methodist Episcopal Church, and a couple named "Todd & Allison," who attended a United Methodist Church -- and performed a national random sample of bankruptcy attorneys to see if legal advice for the couples would differ. "We find that attorneys are more likely to recommend Chapter 13 to an African-American couple than to a white couple or a couple whose race was not indicated," the study concluded.

Many people would agree that disparate treatment based on race is wrong, but how can we try to remedy the situation when so few people are willing to create policies and practices that explicitly address such forms of structural racism? In today's society, where issues of racism and poverty are interconnected, it has become more acceptable to address racial disparities indirectly by tackling economic inequities. Take the recent rash of attacks on affirmative action as an example. Since the late 1990s, many colleges have shied away from using affirmative action and have replaced it with a strong effort to recruit students who represent the first generation in their family to attend college. While this is a step forward that undoubtedly is worth utilizing, we cannot ignore the disparate experiences that people continue to have in our country based solely on the color of their skin. We need to have policies and practices that address structural racism in addition to policies that address barriers for poor and low income people of all races.

The bankruptcy study is just one example of racial discrimination that has been proven by scientific research reports and tests for racial bias. Others include: racial steering (page 45) in housing, in which real estate agents take black home seekers to majority-minority neighborhoods with high concentrations of poverty, even if they can afford houses in communities that are majority white with little or no poverty; discriminatory mortgage lending, which disproportionately offers more subprime loans to black borrowers as compared to white borrowers with similar income levels; harsher punishments for students of color than white students who commit the same offenses; and harsher sentences for blacks in the criminal justice system for committing the same crimes as whites.

Various studies have also confirmed that job applicants with black-sounding names receive half the number of callbacks as those with white-sounding names, even when the quality of the resume and qualifications are the same. "The rate of discrimination is worse for jobs that are really worth having. You don't get a lot of discrimination for hamburger-flipping jobs at McDonalds," says economist Marc Bendick Jr. who conducted a study on racial bias in the hiring of waiters.

These examples of racial discrimination cannot be solved with an antipoverty agenda. Unless we fully take into account the historical and ongoing ways in which racial dynamics produce inequities between whites and people of color, we will continue to perpetuate and reinforce racial barriers.

When asked, "What do you think is the most important problem facing this country today?", a majority of respondents in a recent Gallup Poll provided answers related to economic problems, such as unemployment and the federal budget deficit. Only a third of respondents chose a non-economic issue, with government dissatisfaction as the most popular complaint. And just 1% of respondents chose "race relations/racism" as the most important problem facing the country today.

It is clear that we are challenged by a political and economic structure that negatively affects Americans of all races and ethnic backgrounds. When a majority of the nation's power and wealth is isolated in the hands of a few, everyone should be alarmed and outraged. But working on ending economic inequality alone will not change the reality of racism and discrimination that people of color continue to face on a daily basis. Let's not forget that if a fair and just society is the goal, racial equity needs to be a priority.

Editor's Note: This post has been updated since its original publication.