5 Ways Government Policies Have Made Black People Poorer Than Whites

Racial Classification System Based on Skin Color Determined Who Could Escape From Poverty

Between the Civil War and the Great Depression broad policies were put in place that classified citizens based on their skin color. “Those broad policies called forth more specific policies from the census bureau, state legislatures, courts, and other institutions that sought to label, classify, order and otherwise manage people of mixed or ambiguous or merely foreign descent,” according to a report by Harvard University’s Jennifer L. Hochschild and University of Virginia’s Vesla Mae Weaver. These policies ultimately kept people of darker complexions trapped in poverty.

Eventually the Government Deemed Europeans and Mexicans as White and Jim Crow Laws Concentrated on Blacks

Once 1930 hit Europeans were classified as white and Mexicans protested to earn the same classification. This change left Blacks as the only ones to be targeted by Jim Crow laws and the “consequences of being labeled as Black deepened,” according to the report by Harvard University’s Jennifer L. Hochschild and University of Virginia’s Vesla Mae Weaver. Jim Crow laws essentially kept Blacks from being able to be a part of the political process and thus made it nearly impossible for them to climb out of poverty. It was only a matter of time that the inferior status that was placed upon Blacks led to “subordinate economic and political status” as well.

Changes in Financial Aid Policies Forcing Black Students Out of College 

In today’s economy, it is stressed that a college education is key as many entry level positions that didn’t call for degrees in the past are now looking for college graduates to fill those spots. Unfortunately, Black students are struggling to make it through college after a change in financial aid policies left them without much help at all. Under the Obama administration, financial aid policies checked the last five years of a parent’s credit history, as opposed to the last 90 days, which was the case under previous policies. According to Breaking Brown, this change has forced 28,000 HBCU students to drop out for financial reasons and placed them at a severe disadvantage in the job market.

Preferential Tax Treatment For Wealthy Investors

Reports have shown that years of financial hardships and struggles have kept many Blacks from taking the necessary risks to invest. In a sea of other factors that contribute to Blacks’ lack of wealth, a tax system that is dedicated to helping those who are already wealthy leaves little room to help African Americans. “Preferential tax treatment for large estates costs taxpayers and provides huge benefits to less than 1 percent of the population while diverting vital resources from schools, housing, infrastructure and jobs,” a report by the Institute on Assets and Social Policy titled “The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide” explained. These types of policies are essentially giving preferential treatment to those who are already wealthy and leaving low- and middle-income Americans, who are mostly Black, without much help from the government.

Racist Housing Policies Including the Systematic Exclusion of African Americans From GI Bill Loans

Homeownership is a key factor in obtaining wealth in the long run, as explained in the report by the Institute on Assets and Social Policy. Unfortunately, housing policies have long placed Blacks at a disadvantage including the systematic exclusion of Blacks from the GI Bill loans. The bill was meant to help over 5 million Americans obtain homes through the Veterans Administration but because banks failed to approve loans for African Americans they composed an incredibly small portion of the population that was actually able to obtain a home through the bill, according to a report submitted by the U.S. Housing Scholars and Research and Advocacy Organizations. By keeping Blacks from owning homes and using other policies to keep them segregated from predominantly white neighborhoods, the country’s racist housing policies have also contributed to the overall wealth gap between Blacks and whites.