Monday, January 21, 2008

Gary Becker and Richard Posner on stalled economic convergence between blacks and whites in America

Each lists many provocative and strategic observations. Here are just a few excerpts, first from Posner:
Black life expectancy narrowed until about twenty years ago, and then remained constant at about 6 years below that of whites. This means that life expectancy of blacks is comparable to mortality rates in the much poorer countries of Paraguay and Mexico. A large fraction of the racial difference in average length of life is due to differences in the incidence of cardiovascular diseases, life styles, and violent deaths. The economic literature on the statistical value of life shows that a typical white values a life year at over $120,000. A comparable analysis for typical American blacks would suggest that they value an additional life year at less than the figure for whites because black earnings are lower. If the value by blacks is about $100,000, the discounted value of the six-year lower life expectancy for blacks would be worth about $400,000. Since the discounted value over a lifetime of the racial gap in average annual earnings would be worth no more than $300,000, this calculation suggests that the racial gap in life expectancy is as important as the still considerable earnings shortfall of blacks.

Why did the progress of blacks stop well short of achieving full equality with whites, and is the slowdown during the past 20 years in black progress only temporary, or is it an indication of what the racial situation will be during the next few decades? The sharp slowdown is surprising mainly because institutionalized and personal discrimination against African-Americans has continued to fall into this century. Probably the most important offset to the decline in discrimination is the rapid growth since the 1960's in the fraction of black children raised in households with only one or no parents-these households also grew among whites, but at a much slower pace. Moreover, white single parent households mainly arise from a divorce between parents who had their children while married (or while living together), whereas never-married and quite young mothers raise many black children.

In addition, there is social pressure on young blacks growing up in segregated neighborhoods to engage in crime, including selling drugs, and to not "act white", where acting white sometime is taken to mean studying hard and investing in one's human capital. These pressures act more on black boys rather than girls, which help explain why the achievements of black women are much closer to those of white women than is the gap between black and white men.

On the whole, I am optimistic that some of these changes will be made, and hence that the convergence between blacks and whites will resume after the hiatus during the past 20 years, although it will probably be many decades before blacks achieve anything close to full parity with whites.
Becker adds:
Quite apart from the black "stars" whom Becker mentions, there is a large and thriving black middle- and upper-middle class. The income gap, and the related gaps in longevity, law-abidingness, education, and family stability, are due to the disproportionate incidence of social disorder among blacks, creating a large black "underclass" that drags black average-income statistics down.
It is also possible that the sexual revolution of the 1960s promoted the break-up of the black family--of the white too, but the whites were in a better position to adapt. To the extent that the "Great Society" programs of the 1960s and the social disorder of the same period are correlated phenomena, together constituting a lurch to the Left, the net effect on black progress may have been negative.

Probably the focus of reform should not be on the black-white income gap as such but on the social pathologies that are responsible (at least in part) for it. The best approach might simply be to remove obstacles to labor mobility and to competition more generally; Becker mentions school vouchers and charter schools. In addition, reducing or eliminating the minimum wage would expand employment opportunities for blacks. Measures can also be taken to reduce the out-of-wedlock birth rate of blacks; in this regard the Administration's effort to stress abstinence, rather than contraception, as a means of limiting teenage pregnancy is misguided.

But there seems to be little political pressure for such reforms. The costs of the social disorders that afflict poor blacks are incurred mainly by poor blacks themselves, and poor blacks do not vote very much. Moreover, blacks support the Democratic Party so overwhelmingly that Democrat politicians have little incentive to expend their necessarily limited political capital on policies that might benefit blacks at the expense of groups that are in play between the two parties, such as public school teachers.
While the policies of black victimization have shifted from the involuntary
(slave trade and labor coercion) to the voluntary (coercive entitlements such as affirmative action), in the end, these policies continue to manufacture victims.

I'm still waiting for entitlement proponents (Al, Jesse, Louis, ... Bill, even?) to call for height and ethnic diversity in the NBA. Let's see how bringing in Asians under six feet into the starting lineups improves the product, brand and monetization of basketball entertainment.

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