A Discussion of Systemic or Institutional Racism

Let’s begin with a definition: Systemic or Institutional racism is where race causes a different level of access to the goods, services, and opportunities of society. Note that this doesn’t imply any level of conscious racism by individuals, or individuals feeling that members of a particular race are inferior. In the United States, “systemic racism” means that blacks and other people of color, are systematically discriminated against.

Income.  For example, let’s look at the fundamental issue of “income.” The chart below presents the basic data. In 2017, the average black family had an income level only 59% of that of whites.  While it’s true that between 1965 and 2017 (52 years) real household income of whites increased by 0.52% per year while that of blacks increased by 0.67%, it would take centuries for black household income to equal white household incomes at those rates of growth.

How do we explain these systematic and systemic income disparities?  Many ideas come to mind. Let’s begin with education, which we know is a determinant of income.

Education.  Let’s examine the educational attainments of the American population by race (see chart below).

The second and third columns compare whites to blacks. About 35% of whites have no college education, while for blacks, the number is 46% (which is higher than the percentage for Hispanics).  Let’s try to disentangle the impacts of education and race (see chart below).

Each vertical line represents a given ethnic group divided by gender. Thus, the line to the extreme left represents male whites. To the immediate right of that line is the line that represents male blacks.  At each point on the two lines, the median income of whites is greater than that of blacks for every level of education, and the disparities increase at higher levels of education. The disparities between white and black females are not as pronounced, but for every ethnic group, males earn more, often considerably more, than females at the same level of education.

While this data is from 2008, there has been little improvement. Moreover, differences in income only tell part of the story. The table below calculates life-time earnings, including retirement income such as social security, which are based on earnings while working.  The table shows that college educated black men have life-time incomes which are 24.6% less than they would have been had there been no discrimination. College educated black women had discrimination losses of 17.4% compared to college educated white women.

Systemic racism merges in other areas as well.

Unemployment Rates.  The figure below shows historic unemployment rates by race from 1973 to 2019. Over the entire period, African American unemployment rates are more than twice that of whites (see chart below).

Health.  Whites have a life expectancy of 79.12 years, while for blacks life expectancy is 75.54 years. Perhaps 80% of the difference in life expectancy is explained by socioeconomic factors.

Criminal Justice.  The chart below shows the demographics of the US prison population in 2010.  While African Americans make up 13% of the population of the U.S., they made up 40% 0f the prison population in 2010.  Moreover, their incarceration rate (2,306 per 100,000 population) was five times the incarceration rate of the white population (450 per 100,000). Things have gotten much better in the last decade. 

According to the Pew Research, “The nation’s imprisonment rate is at its lowest level in more than two decades. The greatest decline has come among black Americans, whose imprisonment rate has decreased 34% since 2006.”  Nevertheless, black incarceration rates remain five times those of white rates.

One of the reasons for these high rates is systemic racism. According to the NAACP:

• 5% of illicit drug users are African American, yet African Americans represent 29% of those arrested and 33% of those incarcerated for drug offenses.
• In the 2015 National Survey on Drug Use and Health, about 17 million white people and 4 million African Americans reported having used an illicit drug within the last month.
• African Americans and whites use drugs at similar rates, but the imprisonment rate of African Americans for drug charges is almost 6 times that of whites.
• As of October 2016, there have been 1900 exonerations of the wrongfully accused, 47% of the exonerated were African American.
• African American defendants are 22% more likely to have convictions involving police misconduct that eventually result in exoneration.

Deaths from firearms.  According to the Kaiser Family Foundation, the 2019 age-adjusted death rate from firearms for whites was 11.9 per 100,000 population, while it was almost double that for blacks (23.6).

Victims of homicide.  The chart below, from the CDC, shows the rate of black homicide victims as 5.5 times that of whites.

Housing.  As shown in chart below, African Americans have had lower rates of home ownership (around half) than whites for the entire period since 1940.  This is vital for wealth creation, as most American families have depended on the investments in their homes for wealth accumulation.

Wealth.  As a result, the median net worth of blacks ($11,000) is only one-twelfth that of whites ($134,200).  See chart below.

Conclusions.  By every measure African Americans have lower income than whites, much lower net worth, are more likely to be unemployed, have less education than whites, worse health incomes, are more likely to be in prison and are more likely to be victims of crimes, including homicide. All of these outcomes are interrelated, and we are left with two possible explanations. Either the fact that blacks have much worse outcomes than whites is due to their inherent inferiority (either in abilities or behavior) or is the result of systemic racism in American society which goes back to slavery.

In the fateful year of 1968, The National Advisory Commission on Civil Disorders (better known as the Kerner Commission) concluded that the civil disorders and riots in black communities in that year were caused by “white racism,” leading to “pervasive discrimination in employment, education and housing”—as the culprit, and the report’s authors called for a commitment to “the realization of common opportunities for all within a single [racially undivided] society.”

Fifty years later, the Economic Policy Institute, found that “while African Americans are in many ways better off in absolute terms than they were in 1968, they are still disadvantaged in important ways relative to whites. In several important respects, African Americans have actually lost ground relative to whites, and, in a few cases, even relative to African Americans in 1968.”

Following are some of the key findings:

• “African Americans today are much better educated than they were in 1968 but still lag behind whites in overall educational attainment. More than 90 percent of younger African Americans (ages 25 to 29) have graduated from high school, compared with just over half in 1968—which means they’ve nearly closed the gap with white high school graduation rates. They are also more than twice as likely to have a college degree as in 1968 but are still half as likely as young whites to have a college degree.
• “The substantial progress in educational attainment of African Americans has been accompanied by significant absolute improvements in wages, incomes, wealth, and health since 1968. But black workers still make only 82.5 cents on every dollar earned by white workers, African Americans are 2.5 times as likely to be in poverty as whites, and the median white family has almost 10 times as much wealth as the median black family.
• With respect to homeownership, unemployment, and incarceration, America has failed to deliver any progress for African Americans over the last five decades. In these areas, their situation has either failed to improve relative to whites or has worsened. In 2017 the black unemployment rate was 7.5 percent, up from 6.7 percent in 1968, and is still roughly twice the white unemployment rate. In 2015, the black homeownership rate was just over 40 percent, virtually unchanged since 1968, and trailing a full 30 points behind the white homeownership rate, which saw modest gains over the same period. And the share of African Americans in prison or jail almost tripled between 1968 and 2016 and is currently more than six times the white incarceration rate.”

The only explanation for the continuing inequity in America is systemic racism.