Persistent Disparity: Race and Economic Inequality in the United States Since 1945.

• Author: Galbraith, James K.
• Position: Review

By William A. Darity, Jr. and Samuel L. Myers, Jr. Cheltenham, UK: Edward Elgar, 1998; Pp. xiii, 191. $70.00.

This important book comes to grips with the relationship between racial discrimination, black-white income differentials, and the larger phenomenon of rising income and wealth inequality in the United States. The prevailing literature has treated these topics separately. In Becker's (1957) famous model, discrimination is a matter of preferences, substantially fixed and immutable. Meanwhile, the recently predominant line of inquiry into rising inequality in incomes has emphasized the role of technological change, particularly the hypothesis of "skill-bias" in new technologies, associated by some authors with the spread of computers in the workplace. These lines of argument coexist but do not interact, the implication being that the observed rise in black-white inequality during the 1980s did not reflect any increase in discrimination.

Darity and Myers point, at first, to the correspondence between rising inequalities of income and wealth in the general population and to the accelerating political and legal assaults on racial preferences in hiring and education. They show that despite these assaults, the relative educational attainment of black wage earners rose. On this account, racial wage differentials should have narrowed, but they did not.

The authors then set out to establish whether the deteriorating relative economic position of black families can be explained by deteriorating characteristics of black households, particularly the rising proportion of black families headed by low-skilled females. Again, they say no. Female headedness in black families did increase in the 1980s, and this increase was dominated by a rising proportion of low-skilled women. The authors argue, however, that two factors were even worse for black families: the declining relative economic position of all families headed by unskilled young women and more important, a further differential decline in the economic position of such families that are black.

Thus, after controlling for changing relative characteristics of black and white households, relative incomes of black households still declined. Conclusion: Similarly situated black households did worse than their white counterparts. Implication: Discrimination, in any practical definition of the term, increased.

But why? Discrimination, Darity and Myers argue, is endogenous to the larger distribution of...