A fact of life in America is that different races often live in vastly different realities. That’s seen in key measures such as economic prosperity, academic achievement, neighborhood quality, and arrest and crime victimization rates.

These disparities highlight perpetual disadvantage for the same racial groups – largely Blacks and Hispanics – and they have barely budged for decades. The question is, “Why?”

Answers are tough to find. The issue is highly politicized, and it’s highly emotional. Boston Fed researchers say a clear-eyed emphasis on data and research is essential to inform the policy needed to close these damaging gaps.

JAY LINDSAY:

In the early 1980s, and not long from the end of his life, the Black writer and activist James Baldwin asked a question that still doesn't have an answer, 40 years later.

Baldwin was an eloquent and uncompromising voice during the Civil Rights era. But the movement hadn't resulted in the gains in the nation's civic and economic life many Black Americans were expecting. And Baldwin had lost patience with calls for patience.

He told an interviewer, (quote) "I was born here almost 60 years ago. I'm not going to live another 60 years. You always told me it takes time. It has taken my father's time, my mother's time, my uncle's time, my brothers' and my sisters' time, my nieces' and my nephews' time. How much time do you want for your 'progress'?"

A fact of life in America is that different races often live in vastly different realities. That's seen in comparative measures such as economic prosperity, academic achievement, neighborhood quality, and arrest and crime victimization rates.

These disparities highlight perpetual disadvantage for the same racial groups – largely Blacks and Hispanics – and they have barely budged for decades. The progress James Baldwin was looking for remains hard to find.

The question is, "Why?"

Boston Fed economist Jeff Thompson is among those looking for answers. But he sees problems with how people approach the question.

JEFF THOMPSON:

There are some people who approach the topic of racial disparities, and they're just exhausted by it. We passed the Civil Rights Act 50, 60 years ago. We've had affirmative action for how many decades? Some people are just, they're over the problem, and they don't want to even entertain that it's still an issue that's relevant.

There are other people who approach the issue and they're leading with their ideology. They've already determined what the answer is before they've even really heard the question. So, every disparity that exists, by definition, we're going to tautologically define it as the same thing as racism.

JAY LINDSAY:

That disconnect is one reason the Federal Reserve Bank of Boston focused on racial disparities at its 64th Economic Conference, which Thompson organized.

The issue is highly politicized, and it's highly emotional. Thompson said the conference took pains to be neither. And it did that by emphasizing data and research.

JEFF THOMPSON:

We think that the weight of the research, the weight of the historical evidence, clearly shows racism has played a role, continues to play a role. But there are other things going on.

And we think that it's important for research to help inform policy by being able to dive into, and ask questions, and do real serious research on areas where we see different racial disparities and outcomes. Not by prejudging it – we're not just going to call the difference 'racism.' We're going to devote time, effort, and use good data to say, "Okay, what are the factors?" Because just labeling something racism doesn't necessarily help us solve what the problem is. Clearly racism is at play, has been at play, historically. But that's not enough.

JAY LINDSAY:

This is Six Hundred Atlantic, a podcast produced by the Federal Reserve Bank of Boston. I'm Jay Lindsay, and I'm your host for our third season, which we're calling, "Enduring Divides: Racial Disparities in Today's Economy."

This season's six episodes are dedicated to exploring racial disparities and their impacts. We want to build on what Thompson and his colleagues covered in the conference.

We won't pretend we can tackle the whole of "racial disparities in the U.S." during a single season. The conference didn't attempt that either. But the issues discussed there are provocative, timely, and worth further examination.

They include the continuing and acute racial segregation in our communities, and the huge racial gaps in wealth.

We'll also talk about disparities in educational achievement. And we'll look at concentrated areas of social breakdown – often just dozens of blocks in a city – that drive racial differences in crime rates.

We'll get perspectives from economists and high school students, sociologists and former gang members.

The podcast won't focus solely on the racial disparities between Blacks and whites, but they will be prominent. That's because they take up such a massive and volatile space in our national consciousness.

Brown University economist Glenn Loury says Americans need to recognize that closing these racial gaps is a collective moral imperative.

GLENN LOURY:

This persisting Black disadvantage is an American tragedy. It is a national, not merely a communal, disgrace.

JAY LINDSAY:

To Loury, there's one path to change.  

GLENN LOURY:

Changing the definition of the American "we" is the only real solution for the racial inequality problem that afflicts our society. That requires seeing ourselves as all being in the same boat, as sharing a common citizenship and a common humanity, and not seeing ourselves as rival racial groups, as between whom must be brokered some kind of quid pro quo.

It means fashioning American solutions to American problems. This will require adjusting ways of thinking on all sides of the racial divide. The goal should be to achieve a society where everyone, regardless of race, is thought of as "us."

JAY LINDSAY:

Economist Lisa Cook spoke at the conference and has since joined the Federal Reserve Board of Governors. She said we can't continue to tolerate the status quo.

LISA COOK:

What's at stake for this economy and the world economy if policymakers do not get this right and address these disparities? The productive capacity of the United States and the world economy, higher living standards that should follow from sustained long-run growth, and greater stability that is consistent with less unequal societies.

JAY LINDSAY:

The quotes you'll hear this season were either recorded at the conference or in one of several subsequent interviews in the months following.

And, unless indicated otherwise, the statistics were presented by speakers at the conference or in papers submitted for it.

These statistics tell the story of frustratingly slow progress closing racial divides. But it is not a story of zero progress. Here's Yale economist KERWIN CHARLES:

KERWIN CHARLES:

There have been huge investments in Black progress, haven't there? And it is also true that the relative condition of Blacks has, in fact, gotten better. It's been slow, in some minds even glacial, but there has been progress, positive progress.

However, frustratingly large gaps are still to be found wherever we look.

JAY LINDSAY:

This season, one place we'll look is education.

Blacks and Hispanics have long lagged in educational measures like college degree attainment or mastery of academic skills. For example, half of Black students perform below the "basic" level in 12th grade reading proficiency, as do nearly 40% of Hispanic students. That's compared to 21% of white students.

These educational disparities offer clear examples of how racial gaps can feed on each other, so it becomes difficult for policymakers to figure out what's the cause and what's the effect – what's the chicken and what's the egg?

For instance, do racial disparities in educational achievement cause racial disparities in income – or vice versa? A case can be made for both.

Sarah Reber, a UCLA professor who studies the economics of education, calls it a "feedback loop." And she talks about not getting lost in its complexity or in looking for silver bullets.

SARAH REBER:

Honestly, I don't think there is a silver bullet or one weird trick that's going to solve this problem.

I really think you just have to keep chipping away at the problem and try to implement well the things that we know work and try to do more research to understand what are potentially new, promising things that we could be doing.

JAY LINDSAY:

The country's ossified racial gaps aren't just on display in schools. They're also seen in the neighborhoods that surround them.

U.S. neighborhoods are still highly segregated both by income and race.

In fact, outside of a couple cities – including Atlanta and Washington – it's nearly impossible to find a neighborhood with both a high median income and a high percentage of Black neighbors. Such places essentially do not exist.

Researchers say this tight coupling between a neighborhood's racial makeup and income has real economic consequences. A relative abundance or lack of resources gets frozen there. They become places of perpetually plentiful or limited opportunity.

Neighborhood segregation is at least partly a vestige of our racist past. But experts also credit a more benign phenomenon. "Racial sorting" is a tendency across all races to prefer to live near others of the same race.

Dionissi Aliprantis, an economist at the Cleveland Fed, was surprised when his research indicated this was a key driver of continued geographic segregation.

He suspects some form of racial hostility is still playing a role, and he added it's critical to learn more.

DIONISSI ALIPRANTIS:

How can we make it so that everybody feels welcome in all of our neighborhoods? That's actually an economic issue, not just something about people might have thought about it in terms of fairness or some other dimensions, but actually seems to really matter for economic opportunity.

JAY LINDSAY:

The racial stratification of U.S. neighborhoods has more than economic impacts. It's also clearly connected to racial disparities in crime.

The correlation we see is straightforward: If a particular racial group has a higher proportion of criminal offenders or victims, then neighborhoods where that race is concentrated are likely to have higher crime.

But research by University of Pennsylvania criminologist John MacDonald suggests that racial crime disparities aren't really about entire neighborhoods.

Instead, they're about clusters within those neighborhoods where acute joblessness, poverty, and family breakdown are found.

MacDonald said these clusters of "concentrated disadvantage" make up just 3 to 5% of places and street segments in a given city. But they generate at least 50% of its crime. MacDonald says there hasn't been enough focus on them.

He thinks closing racial crime gaps can start in these places.

JOHN MACDONALD:

As opposed to thinking about broad-swath policies or programs that address an entire city, instead, you say, okay, here are the top 100 blocks that are generating the highest rates of joblessness, calls for service, arrests. What could be done to help improve the conditions in those places? It's a much more reachable approach than saying, "What can we do for an entire city?", for example.

JAY LINDSAY:

Tito SantosSilva worked with Boston Uncornered, which seeks out gang members and tries to get them off the street and headed to college or careers. He says the only way to make a difference with crime is to go straight to the places most affected and deal with the people most responsible.

TITO SANTOSSILVA:

Those who are driving the most violence inside of the community, those who are often seen as the disrupters in the community, are actually the keys to changing those negative kind of ideas of a community

JAY LINDSAY:

The racial disparities we've discussed in education, neighborhoods, and crime will all get a closer look this season. But racial disparities in wealth come first.

These disparities are jarringly sharp.

The highest-wealth racial group in the U.S. is Asians, followed by whites, Hispanics, and Blacks.

Under a measure called "market wealth," Asians have more than five times the wealth of Hispanics, and eight times the wealth of Blacks.

Meanwhile, whites have more than four times the wealth of Hispanics, and six times the wealth of Blacks.

Closing these gaps is a priority for policymakers. But the complexities are numerous and start at a basic level – how we measure these gaps.

Thompson says assets from defined benefit pensions – like payments a teacher receives after they retire – should be included in wealth.

This would shrink racial wealth gaps and could influence policy, such as by emphasizing the importance of preserving these pensions.

Boston Fed researcher Beth Mattingly is working on a survey of household wealth in Massachusetts. She said there are numerous ways to think about wealth gaps – including by place, by gender, or by family structure. There are also huge variations within the gaps we track.

But she said one thing is clear in all of it.

BETH MATTINGLY:

The takeaway for me is that these gaps are large and relentless. Have they gone up, have they gone down? That's not the key takeaway for me. For me, it is the magnitude, and the persistence, and that despite efforts that may help individual and families, aggregate change has eluded us, aggregate progress has eluded us.

JAY LINDSAY:

That's next time on Six Hundred Atlantic.

JAY LINDSAY:

Thank you for listening to Season 3 of Six Hundred Atlantic. You can find interviews and our first three seasons and subscribe to our mailing list at bostonfed.org/six-hundred-atlantic. Listen and subscribe to Six Hundred Atlantic on Apple Podcasts, Spotify, Stitcher, and TuneIn.

The producers would like to thank our contributors for their time and insights. They are Dionissi Aliprantis, Glenn Loury, Beth Mattingly, John MacDonald, Sarah Reber, Tito SantosSilva, and Jeff Thompson.

This has been "Enduring Divides," the third season of the Boston Fed's Six Hundred Atlantic podcast.