06 Nov Answer the following question from the pdf. Prior to reading this section, had you considered the effects of slavery and subsequent continued discrimination on the ability of (a) Blacks a
Answer the following question from the pdf.
- Prior to reading this section, had you considered the effects of slavery and subsequent continued discrimination on the ability of (a) Blacks and (b) Whites to inherit and earn wealth, savings, and property?
- What factors may affect the higher rejection rates of equally creditworthy Blacks for business and home loans?
- Why might realtors steer Blacks to certain neighborhoods?
- What organizational steps can banks, mortgage companies, and realtors take to ensure they do not perpetrate credit and housing discrimination?
Differences in Black/White Accumulation of Wealth: Effects of Slavery and Generations of Discrimination Many researchers in various disciplines (e.g., sociology, economics, and finance) have investi-gated differences between Blacks and Whites inaccumulation of wealth. Some suggest that these differences are primarily due to differences in inheritance, rather than differences in saving or spending habits.14For the first 250 years of their existence in what is now the United States, Blacks were property rather than owning prop-erty. For decades after the end of slavery, Blacks were still legally denied the right to own property by various laws across the United States. Whereas Whites had property and assets to pass on to heirs, Blacks generally did not.15Systematic and legal discrimination in employ-ment and earnings exacerbated these disparities for one hundred more years, until passage of the Civil Rights Act in 1964, which prohibited race-based discrimination in employment and helped narrow the White/Black earnings gap to some extent. “Put simply, long after legalized discrimination and segregation ceased, their intergenerational impacts persist.”16Not only was there little or no inheritance to pass on due to slavery and its aftermath, Blacks’ wages still suffer effects of discrimination, which limits their ability to acquire and, thus, pass on wealth. Black/White differences in wealth have also been partially attributed to discrimination in access to credit, which results in Blacks beingless likely to be homeowners or to start their own businesses, both of which contribute strongly to accumulation of wealth.17In an analysis of access to business loans, Ando found that Blacks were significantly less likely to obtain credit than were Whites, Asians, and Latinos. After controlling for differences that might have explained Blacks’ lower acceptance rates, Ando still found significant differences.18Similardisparities in mortgage loan approvals and rates for comparably creditworthy Blacks and Whites also exist.19As with employment dis-crimination, it appears that Blacks with marginal. qualifications are rejected or charged higher interest rates, while Whites with marginal quali-fications are given the benefit of the doubt.20About 72% of non-Hispanic Whites and 42%of Blacks owned their own homes in 2014.21Inthe period of 1940 to 1960, while White (male)veterans capitalized on education, employment, and housing benefits after their service, Black veterans were systematically and purposefully denied such benefits even though they had earned them.22The Federal Housing Authority believed in racial segregation of neighborhoods, publicly promoted segregation, and often denied loans to Blacks. Renting instead of owning also contributed to Blacks having less property to leave to subsequent generations; obviously, renters do not have homes to leave heirs. For Blacks who were able to purchase homes, residential segregation and steering by realtors contributed to continued stratification.23Evi-dence of residential segregation and steering continues to be documented.24Homes in pre-dominantly Black neighborhoods are worthless and appreciate more slowly than homes in neighborhoods that are not predominantly Black. In addition, school systems tend to be worse, opportunities for employment are less, and services are lower in such neighborhoods, which also contributes to persistent, enduring gaps in income and opportunities for wealth.
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