The True Color of Money

By Sandip Roy, New America Media
Friday July 07, 2006

Editor’s Note: Between 1995 and 2001, according to the Federal Reserve bank, the average family of color saw their net worth fall 7 percent to $17,000 while the average white family's net worth rose 37 percent to $120,000. Meizhu Lui is one of the co-authors of “The Color of Wealth,” and the executive director of United For a Fair Economy.  


Sandip Roy: A quick definition: what do you mean by wealth? 


Meizhu Lui: Wealth and income are different in that income is more like a stream; it comes in and then it runs out. Wealth is more like a pool or a lake that you can draw from, and it’s really important these days, especially when jobs are not so secure. It helps you weather a rainy day of unemployment, a medical emergency, provides for your retirement, and something to pass along to your children. By wealth, we don’t mean massive amounts of money. We really just mean enough to feel economically secure. 


SR: You write housing accounts for only 32 percent of their net worth of a white family, while for blacks, it accounts for 62 percent of their net worth. What’s the significance of a statistic like that? 


ML: In the United States after a savings account and a car, the home is the next big thing that gives you a bit of a cushion. You can sell it and it will give you some return. But the interesting thing about that statistic is that the value of the home is quite different. African American homes are worth about $45,000—that’s the median value—whereas for whites it’s $142,000. So, there’s a disparity there as well. 


SR: Would you say that each ethnic group has its own particular roadblock to the accumulation of wealth, or is it pretty much a common problem across the board?  


ML: There is a common problem, which is that people from Europe defined themselves very early on as a superior group, the only group really eligible to be full American citizens and therefore eligible for the benefits thereof. However there were different barriers for each group. 

Native people’s philosophy about land was that it was not to be privately owned, that it was something that was commonly held not only for the next seven generations, but for plants and animals. But when the Europeans came, their idea of land was that you had to divide it into little parcels, owned by private individuals, and if you didn’t have a fence around it, it wasn’t worth anything. 

So, the expropriation of Indian land was really the first vast transfer of wealth from one group of color to another. 

Of course, for African Americans it is the expropriation of their labor, and if they were to be paid wages, not necessarily high wages, just wages for their labor, there would be about $1.4 trillion circulating in the African American community today. 

For Latinos, it’s mostly about foreign policy, that was considered the US backyard, and it still is, so under the guise of protecting Mexico and other countries from European powers, the US created policies that kept the resources at the beck and call of the US. 

As for Asians, the Naturalization Act of 1790, one of the first acts of Congress, said that in order to become naturalized as an immigrant, you had to live here for two years, you had to be an upstanding character, you had to be loyal to the constitution, and you had to be white. So that was the first introduction for this word white, and when the Chinese and these other groups sued for the right to be white and lost, what it meant was there was no protection for their property, they were subject to discriminatory laws.  

So, for example, the Foreign Miners Tax during the Gold Rush that the Chinese miners paid but not European miners, accounted for about 25 percent of California’s budget. But not having the benefits of citizenship, if somebody stole their claim to a mine, there was no legal protection for them. 


SR: But even for white Americans, there are many more Walmart clerks than Bill Gates but their average assets would be $30 billion which unfairly skews the numbers. Why not tackle poverty across race instead of focusing on race? 


ML: We really can’t talk about equality if we don’t look at racial equality at every period of U.S. history. There has been an alarming gap that still exists today, and, at every step of history, the government has given boosts to white families. So I think the myth that we’re trying to debunk is that it’s only because of your own hard work that you get ahead in society. The invisible, dirty little secret is that government policies and government subsidies have helped whites and have put barriers in front of people of color at every period of U.S. history, and that makes a big difference. For example, in the ‘30s when Social Security was first implemented domestic workers and agricultural workers were left out of that legislation, and those were the two occupations that were held most heavily by African Americans and Latinos. 


SR: But given that we do live in a capitalist society, what is White America’s interest in narrowing this gap? 


ML: First of all, just to give an example about class, when the G.I. bill was first passed, which gave free college tuition to working class, white GIs--not explicitly limited to white, but that was the way the program ended up being implemented—there were people who said these working class guys, they’re just going to mess up our educational system because they don’t have the brains to do it. 

Clearly that wasn’t true, and for every dollar spent on a white GI’s education, there has been about a $12.50 return in terms of the growth of our economy.  

So if we think of all the people that we are not investing in today, and not allowing them to develop their skills and talents, how are we going to compete in the global marketplace? It will boost everyone, it will boost white people as well, if we allow more resources to go to people of color. 




Sandip Roy interviewed Lui for “UpFront,” a NAM weekly radio program on 91.7FM, San Francisco. Roy is an editor for New America Media.