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Economic Justice in America

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By Joseph Stiglitz
  ! ECONOMIC JUSTICE IN AMERICA: FIFTY YEARS AFTER THE KERNER REPORT Roosevelt Institute Working Paper Joseph E. Stiglitz 1  University Professor, Columbia University, Chief Economist at the Roosevelt Institute  August 2017 1  University Professor, Columbia University and chief economist, Roosevelt Institute. I am indebted to Andrew Kosenko for research assistance; to Debarati Ghosh for editorial assistance; and to the Ford  # Fifty years ago, the Kerner Report on the Civil Disorders that had broken out the previous year, provided a stark description of the conditions in America that had led to the disorders. Their basic conclusion still rings: “Our Nation is moving toward two societies, one black, one white—separate and unequal”   (Kerner Report, p. 1.) It pictures a country in which African-Americans faced systematic discrimination, with inadequate education and housing, and totally lacking economic opportunities—for them, there was no American dream. Underlying all of this was a diagnosis of the cause: “…the racial attitude and behavior of white Americans toward black Americans. Race prejudice has shaped our history decisively; it now threatens to affect our future.” (Kerner Report, p. 203). And it accomplished this through power.  We have been asked to assess how things have changed in the half century. As  we set about this, a passage from the report resonates: One of the first witnesses to be invited to appear before this Commission was Dr. Kenneth B. Clark, a distinguished and perceptive scholar. Referring to the reports of earlier riot commissions, he said: I read that report [...] of the 1919 riot in Chicago, and it is as if I were reading the report of the investigating committee of the Harlem riot of ’35, the report of the investigating committee on the on the Harlem riot of ’43, the report of the McCone Commission of the Watts riot. I must again in candor say to you members of this Commission - it is a kind of Alice in Wonderland - with the  $ same moving pictures re-shown over and over again, the same analysis, the same recommendations and the same inaction. These words come to our minds as we conclude this report.[...]   (Kerner Report, p. 483.)  And they come to our minds as we review the Nation’s progress. These words are still true. Some problematic areas identified in the report have gotten better (participation in politics and government by black Americans—symbolized by the election of a black president), some have stayed the same (education and employment disparities) and some have gotten worse (wealth and income inequality). The civil rights era did make a difference. It was not just that a variety of forms of discrimination were illegal. Societal norms changed. Many large corporations and most educational institutions believed in affirmative action; to be openly racist in many, if not most, quarters became unacceptable. Large corporate boards and major universities sought diversity as a policy. They believed in it, and believed diversity  would strengthen them. But deep seated and institutional racism continued. New tests of discrimination in hiring and housing revealed the extent: blind resumes were sent,  with the only difference being the name of the individual, giving a suggestion of race. Callbacks were markedly different (see Bertrand and Mullainathan (2003)).  And several countertrends impeded progress. Martin Luther King realized that achieving economic justice for African Americans could not be separated from achieving economic opportunities for all Americans. His march on Washington, five  % years before—which I attended, and the memories of which remain so vivid (See Part II of Stiglitz (2015)—was called a march for jobs and freedom. Fifty-five years on from that March, America is a country more divided, with less economic opportunity. Thus, the struggle for opportunity for African Americans has been an uphill battle: it  would have been difficult in any case, but all the more so, as the economic environment was becoming harsher, especially for those without college degrees—73 % of African Americans did not have a Bachelor's degree in 2016 (U.S. Census Bureau (2016)). Moreover, while educational attainment has been on the rise, it has been rising faster for white Americans than for non-white Americans.  With the rungs of the ladder becoming further apart, middle class families invested increasing amounts in ensuring that their children had an advantage. They  worried that urban schools would not give their children the competitive edge they needed. White flight 2  led to increased economic segregation; and in a country where schools were local, both in control and in finance, it meant that the disparity in the quality of education between African-Americans left behind in the urban areas and the children of the privileged living in suburban areas or sending their children to private schools increased. This meant that even in our needs-blind selective schools, the fraction of students from the economic bottom half remaining appallingly low (Hoxby and Avery (2012)) and students from the bottom quartile comprise only 3% #  It deserves noting that the Kerner report emphasized the need to “desegregate the ghetto” and create more communities that are mixed; what ended up happening was quite the contrary. And when trends reversed—with gentrification of urban areas—it often didn’t help. Housing prices soared, and talented African-Americans sometimes found themselves being displaced in the magnet schools.
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