The Black-White Wealth Gap: Blame Cousin Joe

Family obligations are a big part of the gap in white-black wealth, claims study

The black-white wealth gap has been explained as a history of discrimination that's led to black families accumulating less wealth, on average, than their white counterparts. But a new argument put forth by a Princeton graduate student claims it's also due to family ties.

The Boston Globe reports on sociologist Rourke O'Brien's study showing that upper-income blacks give more of their money to friends and family than upper-income whites, who are far less likely to have a poor sibling or parents living in poverty. This makes it difficult to save and accumulate wealth, claims O'Brien.

"Obligations of group membership can have stratifying consequences for individuals," O'Brien writes, who documents the greater amount of "informal financial assistance" he sees among black families relative to white ones.

"These transfers of money can have a big impact on wealth accumulation," writes the Globe. "Money that's donated to poor friends and family usually goes to meet immediate material needs, rather than accumulating interest, earning dividends, or riding the stock market."

Via the Boston Globe.

What does the study suggest about the differences in black-white family obligations and financial decisions?

[Hireman]

What this article leaves out is the word "part" that the study uses to describe the difference. As in "part of the reason". Way to seize on a partial fact to make "news".

[DerivePI]

Its sorta like saying the bullet hole ridden dead man died from too much lead in his system. There are many reasons that can be looked at for the difference (we are looking at people groups and not individuals):- prevalence of single mother families, culture of victim-hood, intelligence gap (measureable and not subjective), crime and history.

Actually, I totally disagree with the conclusion. A strong, healthy sense of family, as a group, should encourage not hinder the prosperity of the family. But, unlike Uncle Sam, family handouts should be coupled with love and responsibility to the group.

[Kellso]

I want to know just how much of MY MONEY was spent doing this useless study? What is next to waste badly needed money on??? If people would get off their sad butts and get a JOB they will not be so likely to be where they are now. Oh but wait! That would mean they would actually have to work and wouldnt be able to draw 'muh check' and lay around and smoke dope and make babies for the rest of us to support!

[Dan_Tien]

Since the author of the study is a Princeton graduate student, it may be his Master’s thesis. It may not have spent any of your money.

[harold_lloyd]

You seem to be very angry, but without a specific target for you anger.

[Kellso]

@harold_lloyd Its easy to see who I'm angry with. OUR GOVEARNMENT! For wasting so much money on friviolous 'studies' and experiments. Spend my money towards the debt that our suppoedly smart elected officials have blown on this crap and lets try to make this a nation for the people and not for the government clicque.

[Kellso]

@Dan_Tien Now how foolish are you???? A study done FREE??? Yeah, it was a free study to go to Mars too wasnt it?

[harold_lloyd]

@Kellso Before you go absolutely postal, a lot of govt funded studies are valuable research, if only you find out what they are doing and get past the headline on fox.

Do you really think that there are a lot of people who "lay around and smoke dope and make babies for the rest of us to support"?

I suspect if they could actually be found, FoxPropaganda would be camped on their doorstep, filming their every transgression. Why don't they do that?

[texas_cutie75]

Its common sense, if you give your money to family members who are struggling, you aren't going to be able to save as much. I wonder how much money was spent on this "study".

[marine1]

It seems to me that most studies have an underlying agenda to strenghten the negative results there in, in stead of reasoning a solution to resolve those negative findings.

[methinks]

One item that was not included is the family structure in the black community. Most family units, 2/3rds of them, don't have a father present just multiple baby daddies.

How much money was this idiot given to do this useless study?

[texas_cutie75]

I didn't even poat about family structure ...good point.

[stepped_in_it]

Having "money" (or not having money) is a learning experience passed down from generations. Children learn from their parents/grandparents mistakes about "lending" to relatives/friends. This is often seen when someone wins a lotto. Your "family" and "friends" come out of the every crack (pun) and crevice. Lotto winners want to be a good family member or friend and usually get burned for it. Many sports stars have the same problem....as they've hit that lotto with the big sign on bonus. They want to bring their "friends/family" along with them to the promised land.
Bottom line....never "lend" money to family/friends unless to don't expect it to be repaid, as it most likely will not.

[TheJimmy]

Professional athletes are the poster children for this stupidity.

[Cheenoguy]

So you view selfishness as intelligence? What a wonderful morality. Bet you claim to be a Christian as well.

[TheJimmy]

@Cheenoguy Just giving money away to random family members who didn't earn it is an absurd notion. Maybe if they cut my grass or shoveled my snow I'd throw them a few bucks. but I wouldn't just hand over money to be a nice guy. And no, I don't claim to be a Christain so churches don't get freebies from me either.

[PoliticalSpice]

This makes sense to me, I have a very good friend who is black, she is constantly giving her brother things like jackets, buying him food, giving him groceries, etc. Thing is she barely has enough for herself much of the time...

[texas_cutie75]

Breaks your heart, huh?

[PoliticalSpice]

@texas_cutie75 she's a very sweet person, very kind and generous to others, even people that are not family members. Result is she has very little for herself, lives in small studio apt, something most people are out of in their mid twenties. No investments, a cash savings that gets depleted any time she has medical problems or sees a dentist, something she didn't even start doing till her thirties. It's very tough, and then I read comments from idiots on here, usually ifoits who vote republican, my little cutie, calling people like her lazy, takers, people who don't want to work etc. doesn't break my heart as much as get me angry we live in a soceity that is so messed up.

[texas_cutie75]

@PoliticalSpice

That is just heartwrenching! What is going to happen to her if tragedy hits, how does one not worry about illness and old age when you struggle so? These are the people that need assistance.

[PoliticalSpice]

@texas_cutie75 Well she refuses to apply for assistance, though she certianly qualifies for food stamps. When disaster hits, as when she needed surgery awhile back I picked up the tab, obamacare will help her some because medical care not presently covered by insurance is a big part of her cost, indeed, despite all she does for family, she'd be comfortable at this point of her life if it hadn't been for medical expenses...

[Polusalo]

@PoliticalSpice
I, also, would have qualified for food stamps a few years back and didn't apply for them. It really is rough trying to make it on your own, not wanting government help but barely scraping by.

Kudos to you for helping pick up the tab, I know that couldn't have been easy.

[Penn1699]

BS. Wealth and/or the lack of it is color blind. They need an update. With the degradation of the core family in all populations no one group is left out.

[Emerald1]

Too many baby's mamas and no responsible baby's daddies.

[Vox_Nova]

Too many irresponsible fathers, i agree. Kids that come from a single mother home; have double the chance of incarceration. Agreed.

[hankf68]

same can be said for any race

[AnnieO]

@hankf68 True, but the number of babies born to unwed black mothers is significantly higher.
http://www.childtrendsdatabank.org/pdf/75_PDF...

[HooverNiebold]

In other words crime doesn't pay. And apparently all the biased grants, tuition and hiring practices that favor coloreds are of no use. Maybe it's time to remove them and base these things on merit.

[GrobHahn]

An update to the article seems to generate more questions.

"*UPDATE 1/29/13- After writing this post I went looking for statistics to verify that differences in income do not explain differences in wealth between blacks and whites. Take a look at page 41 of this article by Dalton Conley at NYU, which breaks down net wealth by income and race. As you'll see, the median net wealth of white families earning $50,000-$75,000 a year is $140,000; black families in that same income range have a median net wealth of $54,000."

Let's face it folks, the gap in education between whites and blacks can't possibly create equality in wealth. Stay in school, or stay poor. That's the down side of the American dream!
Grobbbbbbbbb

[S-N-A-F-U]

The accumulation of wealth is not dependent on government to pick up where the recipient is not willing to make sacrifices in his or her life to take care of themselves through education, hard work and discipline. There will always be poor people, not necessarily of their own making that depend on others for a hand-up, not a hand out, unless of course one is in-firmed, elderly and sick.

Incidentally, the current unemployment under this administration is (in real figures) 14.4% and 18% for African Americans....

"The Boston Globe reports on sociologist Rourke O'Brien's study showing that upper-income blacks give more of their money to friends and family than upper-income whites, who are far less likely to have a poor sibling or parents living in poverty. This makes it difficult to save and accumulate wealth, claims O'Brien."

Really?? Maybe Mr. Obama should learn that lesson from his brethren, where his brother and sister live in abject poverty in Kenya....Guess who paid for his brothers surgery in Kenya recently? Mr. Dinesh D'Souza, Conservative, author and former college president....

[scotta]

This is America, with hard work correct managing of moneys and savings you can also be wealrhy

[Thunderchicken]

And it's easier to do that here than in most other countries.

[scotta]

@Thunderchicken that is why people of other countries want to come here. We take for granted all our freedoms until the government tries to take them away. But like I said before this is the place to make your fortune.

[Your_Name_Here]

Tiger Woods made more money than I did, who should I blame? Hint: It begins with the letter "Me."

[tomincali]

why does this make news? everything is just excuses.

[Grubby]

Or...you could invest a little money, let it grow, and THEN help out the folks. All this shows is the old adage that if you don't have money, and you know you don't have money, and you see yourself as not having any money, then you will never have money. If you see yourself as wealthy, even if you lose everything, you will find a way to again be wealthy, because that is the way it needs to be. We control our own destiny, and get what we believe we will get.

[Tralee]

As far as studies go, I would like to see a bit more hard data that proves this assertion. It seems a bit disingenuous to me. It makes some pretty broad assumptions, at least in the bit in the article, that are just that, assumptions. I don't see the connection between being well off and giving to relations or charity and not being able to invest or save money. Anyone who is well off knows that to grow that money one must invest, it's a choice they make. If one family would rather support other family members rather than invest to make more money to help MORE family members, they've made a poor economic choice.

[Yank]

I am sure that is it and not that African-Americans have the some of lowest rate of high school graduation of any group in the US? There can't be a correlation between education and pay, can there?

[RobertJHarsh]

A couple of years ago, I worked with a guy whose brother was a doctor. Of course he made real money but you wouldn't know that since he let his family leech off of him. His wife and kids suffered because of it and his kids actually had to out loans for college. I promise you, if I scored serious money or hit a lottery, all kinds of loser family members would be popping up out of the wood work. That just the way it is.

[Arumizy]

That this articles main goal is to try to sneakily bring in white guilt to make us feel guilty for being successful and have more material wealth then other people is the entire intent of this article.