The Wealth Gap
So many gaps. The Times' Michael Powell, basically a beat reporter, has been given an opportunity to write an Economix blog post on the "wealth gap" between whites, blacks, and Hispanics. The post summarizes a "study" by the Institute on Assets and Social Policy at Brandeis Universtity. Yes, it's ridiculous - but read it - if for no other reason than to see what gets to be called a "study" in the Times.
At any rate, in the middle of his posting Powell nonchalantly mentions almost in passing "Black families — who save at the same rate as white families..." as if this were the most commonplace fact in the world and apparently not even worth backing up with a source as it's so self-evidently true. So I decided to spend just a few minutes looking and found that information on saving rates by race/ethnicity is not so readily available.
I did find this article in USA Today: For many minorities, saving isn't so easy. It then goes on to describe the very low rates of participation in and contributions to - and high rates of withdrawal from - 401K plans among minorities compared to whites (and you'll be shocked to learn that Asians have even higher savings/lower withdrawal rates than whites!). It's hard to reconcile the facts in this article with Mr. Powell's baseless assertion.
And then there is "Conspicuous Consumption and Race" The authors conclude: Consistent with popular perception, we find that minorities spend more on conspicuous items than Whites, controlling for differences in income. A variety of estimates show that these visible expenditure differences are relatively large and are associated with substantial diversion of resources from other uses, including savings and expenditures on things like health care and education.
So does Powell make this claim because he has some readily available, unimpeachable source to back it up, or because the alternative would be just too devastating to the overall thesis of his article?
At any rate, in the middle of his posting Powell nonchalantly mentions almost in passing "Black families — who save at the same rate as white families..." as if this were the most commonplace fact in the world and apparently not even worth backing up with a source as it's so self-evidently true. So I decided to spend just a few minutes looking and found that information on saving rates by race/ethnicity is not so readily available.
I did find this article in USA Today: For many minorities, saving isn't so easy. It then goes on to describe the very low rates of participation in and contributions to - and high rates of withdrawal from - 401K plans among minorities compared to whites (and you'll be shocked to learn that Asians have even higher savings/lower withdrawal rates than whites!). It's hard to reconcile the facts in this article with Mr. Powell's baseless assertion.
And then there is "Conspicuous Consumption and Race" The authors conclude: Consistent with popular perception, we find that minorities spend more on conspicuous items than Whites, controlling for differences in income. A variety of estimates show that these visible expenditure differences are relatively large and are associated with substantial diversion of resources from other uses, including savings and expenditures on things like health care and education.
So does Powell make this claim because he has some readily available, unimpeachable source to back it up, or because the alternative would be just too devastating to the overall thesis of his article?
posted by ziel | 5/17/2010 10:08:00 PM
2 Comments:
Interesting enough, USA Today had an article on this "study" in today's edition. One, oh-so-obvious reason they cited for the gap is that "Persistent discrimination in housing, credit and labor markets likely played a role". The article provides no substantiation of this conclusion but like you said, I guess by now it's so obviously true that it doesn't need to actually be backed up with facts.
I remember in the old days we just had "people who saved and people who didn't save". The former were considered to be industrious and frugal while the latter were simply careless and/or lazy. Fortunately, now we have the advantage of brilliant liberal insight determining that the wealth gap is the fault of white people. Ah but then there's those pesky Asians, failing once again to follow the script.
Milton Friedman wrote about this. Blacks save less than whites.
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