The welfare worker came to inspect my grandmother’s three-bedroom rowhouse in Baltimore. She walked around taking note of the pristine living-room furniture, which was protected by thick plastic that stuck to your legs in the summer and gave you chills in the winter.
It was the late 1960s. Big Mama had one television. The carpet was like new, also protected by plastic, with runners strategically placed in areas with regular foot traffic to keep it from getting dirty.
For the inspection, Big Mama would have had us looking our best. I’m sure not a strand of hair was out of place for the three girls — 8, 4 and 3 — with our neatly pressed dresses and snow-white ruffled ankle socks. I was the middle girl. My brothers, 1-year-old identical twins, always wore matching outfits, tiny suits, sometimes with bow ties that they had better not take off.
Big Mama didn’t like the way the woman commented on how nice and clean her home looked. Something about her surprised tone made my grandmother feel judged, for us not looking needy enough. And the worker warned that having too much in savings could reduce or even eliminate any future benefits.
After the visit, Big Mama told the state to “never mind” about cash assistance for the five grandchildren she would raise to adulthood.
“Just because you’re poor doesn’t mean you have to look like you’re poor,” Big Mama would say later when I asked her why she refused welfare.
If you haven’t said it yourself, you have probably heard someone complain that Blacks are spendthrifts, intent on living beyond their means and looking better than their economic status should afford. How dare low-income Black parents spend money on a smartphone or pricey sneakers with one hand when seeking assistance with the other, critics argue.
Okay, let’s talk about the wealth gap.
White families have the highest level of median and mean family wealth: $188,200 and $983,400, according to the 2019 Federal Reserve Survey of Consumer Finances. Black families’ median and mean wealth is less than 15 percent that of White families, at $24,100 and $142,500.
(The median represents the wealth of the family in the middle of the pack. The mean figure is much higher because it is a mathematical average, skewed by the concentration of wealth among the very rich.)
Looking at expenditures, Black households spent an average of $639 on footwear in 2019, compared with $419 for all households, according to the Labor Department’s 2019 Consumer Expenditure Survey. When it came to women’s and girls’ clothing, Black households spent $784, compared with a national average of $704.
I’m a fan of the ABC sitcom “Black-ish,” and there’s one line that the lead male character says during a 2016 episode that caught my attention.
“We have to dress the part just to get the part that you already have,” Andre “Dre” Johnson says to a White colleague who observes that he’s never seen Dre wear the same outfit twice.
Dre’s White co-workers think he’s reckless with his spending. It’s a common misconception: Black people would be wealthier if they just didn’t spend so much on clothes, sneakers and cars.
Like so many other misrepresentations when it comes to Black people and how they spend and save, stereotypes supplant substantive analysis.
It’s intellectually lazy to argue that the spending differences are due to some trait of Black people, says economist Kerwin Kofi Charles, who co-authored the 2009 study “Conspicuous Consumption and Race.”
It’s more likely that higher spending by Blacks is the result of “status signaling,” he argues. It’s an economic theory akin to something my grandmother drilled into me: “You have to be twice as good to get half as much.”
So a Black worker might spend more on clothes to signal she’s not inferior, said Charles, the dean of the Yale School of Management.
“Your grandma probably told you, Michelle, ‘Dress very neatly and don’t go to work looking crazy,’” he said.
Status symbols can impress hiring gatekeepers, says Tressie McMillan Cottom, a sociologist and 2020 MacArthur fellow, in her book “Thick: And Other Essays.” In an excerpt for Zora, a literary platform for women of color, titled “The Poor Can’t Afford Not to Wear Nice Clothes,” Cottom says such overspending isn’t necessarily irresponsible.
“At the heart of incredulous statements about the poor decisions poor people make is a belief that we, the hardworking, sensible not-poor, would never be like them,” she writes. “We would know better. We would know to save our money, eschew status symbols, cut coupons, practice puritanical sacrifice to amass a million dollars. … You have no idea what you would do if you were poor until you are poor.”
Here’s another consideration. Even as pricey as they are, Air Jordan sneakers aren’t keeping poor Black children from a college education. Parents can scrape up enough money for the shoes, but the cost of a college education can be prohibitive.
It’s not that Whites are better money managers.
For many families, housing is the biggest component of their wealth. The typical White family has almost eight times the wealth of a typical Black family, largely because of racist housing policies that facilitated wealth creation for White Americans while denying Blacks the same path to prosperity, says Darrick Hamilton, an economist who studies racial and ethnic inequality.
“I am unaware of any credible economic study published in a reputable economic journal that has demonstrated that once you control for income, White people save more than blacks,” said Hamilton, the Henry Cohen professor of economics and urban policy at the New School in New York. “It is obviously the case that if you have more income, you save more, because you have more disposable income from which to save. Once you control for income, counter to popular belief, it is a myth that White people save more than Black people.”
Dig deeper into the reasons Blacks have less to hand down, and you unearth systemic racism.
How has your race or identity shaped your financial decision-making? Share your thoughts with us.
“African American families today, whose parents and grandparents were denied participation in the equity-accumulation boom of the 1950s and 1960s, have great difficulty catching up now,” Richard Rothstein writes in “The Color of Law: The Forgotten History of How Our Government Segregated America.”
Nearly 30 percent of White families have received an inheritance or gift, compared with about 10 percent of Black families, according to the Fed data. Black borrowers are far less likely to receive down-payment assistance from their parents, delaying homeownership.
“For the vast majority of Americans, and especially for those who are wealthy, it is wealth that begets more wealth,” Hamilton said. “So in other words, having the endowment, to begin with, puts you in an asset that’s going to passively appreciate, regardless of the decisions you make.”
And for more context: “We can find instances in our history in which, even when Black people were able to acquire those assets, they were subject to confiscation, fraud and theft because we remain politically vulnerable,” he said.
Bigotry is also profitable, said Hamilton, the founding director of the newly created Institute for the Study of Race, Stratification and Political Economy.
Even when Blacks qualify to borrow at the lowest interest rates, they get offered financial products that are inferior, regardless of their economic circumstance, he said.
Our economy doesn’t translate labor-market success into wealth the same for Blacks as Whites, even among Blacks with college degrees. Black households headed by a college graduate have less wealth than White households headed by someone who dropped out of high school, he said.
If anything, many Black people are super-savers, when you take into account the network of kinfolk and friends they assist financially.
I thought about Hamilton’s words and the research by other Black scholars in reflecting on what my grandmother gave up to take care of me and my siblings. Big Mama could have had more wealth. But her financial sacrifice kept me from being placed in foster care, and that stability changed my life for the better.