In June, the Supreme Court issued several decisions with big policy implications. Its rejection of a challenge to Obamacare and its endorsement of the right to same-sex marriage have received the attention they were due. A third decision, confirming that the Fair Housing Act prohibits not only policies that intend to perpetuate racial discrimination and segregation, but those that have the effect of doing so, was equally momentous. Yet because the ruling concerned an obscure (to the public) and technical phrase (“disparate impact”), it has been more difficult to understand. To comprehend its significance, a review of its background is in order.

Roots of the Fair Housing Act

In over 100 cities during the summer of 1967 African Americans rioted, in rebellion against segregated and inadequate ghetto conditions. President Lyndon Johnson appointed a commission headed by Illinois Governor Otto Kerner to determine the causes of the riots; its report was issued in March, 1968. The Kerner Commission noted that because housing in suburbs surrounding black ghettos was closed to African Americans, creating an artificially reduced housing supply, “housing cost Negroes relatively more” than the cost to comparable white families. Despite its higher cost, ghetto housing was “three times as likely to be overcrowded and substandard.”1 The Commission concluded that:

Our nation is moving toward two societies, one black, one white–separate and unequal… Segregation and poverty have created in the racial ghetto a destructive environment totally unknown to most white Americans. What white Americans have never fully understood–but what the Negro can never forget–is that white society is deeply implicated in the ghetto. White institutions created it, white institutions maintain it, and white society condones it.2

Here, however, the Kerner Commission pulled its punches with, as we shall see, calamitous results that we confront today. As the Kerner Commission (and many well-informed Americans) understood at the time, it was not some vague “white institutions” that created the ghetto, but racially explicit government policy–especially federal public housing programs that unashamedly separated blacks from whites to create racial isolation in neighborhoods where segregation had been previously unknown, and federal home finance programs that underwrote the creation of all-white suburbs with the explicit requirement that blacks be excluded from them. It has been hard to figure out how to remedy the actions of undefined “white institutions;” identifiable federal programs would have been a lot easier to get our hands on.

Nonetheless, the Kerner Commission called for Congress to “mount programs on a scale equal to the dimension of the problems.” Residential integration, it said, “is the only course which explicitly seeks to achieve a single nation,” and “a national fair housing law is essential” to begin the “out-movement” of Negroes from ghettos. “In many suburban areas,” the Commission advised, “a program combining positive incentives with the building of new housing will be necessary” to carry out desegregation.3

There was nothing obscure about the Kerner Commission report: a paperback version published by The New York Times rapidly sold over two million copies. But a month following its publication, Martin Luther King, Jr., who had been making housing integration a focus of his civil rights campaigns, was assassinated. His murder provoked another round of riots, in many cases even more ferocious than those of the previous year. Less than a week after the assassination, Congress passed the “Fair Housing Act,” prohibiting discrimination in housing.

But the act did not explicitly tie its euphemistic “fair” housing to “integrated” housing, a connection that not only the Kerner Commission had made but that Congressional sponsors of the act made clear. Senator Walter Mondale, for example, stated in Senate debate that the act should lead to replacing segregated neighborhoods with “truly integrated and balanced living patterns.”4

The act’s wording, however, was sufficiently vague to inspire nearly a half-century of mischief. Civil rights advocates have had to argue, over and over again, often without success, that policies confining minority housing to segregated neighborhoods, no matter how well the housing may be constructed, cannot be “fair.”5 These cases, beginning in the early 1970s, have asserted that housing policies perpetuating racial segregation, even if not openly discriminatory, have a “disparate impact” on minorities, and therefore violate the Fair Housing Act. For example, a government program that restricts the building of housing for low- or moderate-income families to already segregated neighborhoods, instead of in middle class suburbs, violates the Fair Housing Act–even if the government agency sponsoring the housing does not openly state that its purpose is to keep African Americans out of the suburbs. It was such a case that the Supreme Court decided last month.

Justice Kennedy’s Breathtaking Opinion

Filed by the Inclusive Communities Project (ICP) of Dallas against the Texas Department of Housing, the case concerned a federal program, the Low Income Housing Tax Credit (LIHTC). As its name states, the program gives tax credits to developers who guarantee that a significant percentage of units in a project will have rents that are low enough to be affordable to low and moderate income families. In Dallas, 92 percent of units subsidized by these federal tax credits were built in already segregated (high-minority), low-income neighborhoods. ICP claimed that this policy had a disparate impact on minorities–in other words, that it reinforced racial segregation. At trial, the Texas Department of Housing insisted that it had a legitimate and race-neutral policy goal: to revitalize inner city neighborhoods with good housing. Other justifications frequently claimed by developers and states for using the credit in segregated neighborhoods include that more housing can be built in the inner city because land is cheaper there; that such housing is located where people needing housing presently live and wish to remain; and that suburban zoning laws and local officials prevent construction of low income housing in attempts to preserve their uniform middle class characters, alleged to be a race-neutral preference. In fact, the history of residential zoning laws and practices in the United States demonstrates that racial exclusion was, from their inception, an important motivation.6

A federal district court in Texas and the Fifth Circuit Court of Appeals ruled that developers’ and states’ justifications for reinforcing segregation by the location of their tax credit projects do not outweigh the obligation to integrate when less discriminatory alternatives are available. The State of Texas then petitioned the Supreme Court for review, arguing that the Fair Housing Act did not forbid programs that had a “disparate impact” on minorities, but only those that were intentionally designed to harm them. Around the country, in cases similar to the ICP case, 11 federal circuit courts of appeals, all those that heard such controversies, had upheld the use of the disparate impact analysis in their evaluation of Fair Housing Act claims. Thus, to put it mildly, it was remarkable that the Supreme Court even agreed to hear the Texas challenge, since the court only rarely considers cases where there is no dispute in the lower courts.

Moreover, the Roberts Court has seemed determined to erode civil rights protections involving race whenever it could find an opportunity. It struck down a critical provision of the Voting Rights Act and has narrowed the options for institutions of higher education, as well as for K-12 districts, to diversify their student bodies. It just announced it has accepted a new challenge to affirmative action at the University of Texas, in a case to be heard next year in which already minimal preferences for African American applicants may be prohibited.

So it is not surprising that the Fair Housing Act was squarely in its sights as well. In this case, four justices (almost certainly the conservatives, Justices Thomas, Scalia, Alito and Chief Justice Roberts) appeared to be determined, notwithstanding the consistent judgment of the appellate system, to repudiate the use of the Fair Housing Act to combat segregation in situations where an intent to segregate cannot be proven. Supreme Court procedure requires only four justices to agree to hear a case. Presumably, the four thought they could get Justice Kennedy to join them to form a five-vote majority. In view of Kennedy’s past conservatism on racial matters, civil rights advocates were terrified in the year leading up to last month’s ruling that he would join the other conservatives in holding that disparate impact cannot be considered in a Fair Housing Act case. It must have seemed to be a safe bet for the conservatives–prior to the ICP case, Justice Kennedy had consistently voted to reject the claims of African Americans in civil rights cases, including those involving voting rights, affirmative action, or employment discrimination. Frequently, he has voted for the conservative majority’s decision while tempering its reasoning with a seemingly more moderate concurring opinion.7

(This new ICP controversy, of course, could easily have been avoided if President Johnson and Congress had not tried to be cute by refusing to call integrated housing by its name, terming it “fair” housing instead.)

But this time, Justice Kennedy was unpersuaded by his conservative colleagues. Perhaps, although it can’t be known, he was influenced by recent events in Ferguson, Baltimore, and elsewhere to recognize that we are not living in a post-racial society, and that the urgent demands of the Kerner Commission have never been addressed. Whatever his motivation, Justice Kennedy’s remarkable opinion made clear that the Fair Housing Act was designed to desegregate communities, not just to eliminate open acts of continued discrimination. He acknowledged that the segregation characterizing metropolitan areas across the nation even today has resulted, at least in part, from official government policies in the 20^th century that were designed, explicitly, to segregate neighborhoods by race. In support of this historical argument, he cited a “friend of the court” brief that was submitted to the Supreme Court on behalf of 61 housing scholars (including the author of this article) who described the myriad public policies that purposefully segregated metropolitan areas by race. (The brief had been organized by the Economic Policy Institute and the Haas Institute for a Fair and Inclusive Society at the University of California, Berkeley). Justice Kennedy quoted the Kerner Commission report, and concluded his breathtaking opinion–breathtaking because the Supreme Court had never before dared to say this so openly–with this passage:

The Fair Housing Act must play an important part in avoiding the Kerner Commis­sion’s grim prophecy that “[o]ur Nation is moving toward two societies, one black, one white–separate and un-equal.” The Court acknowledges the Fair Housing Act’s continuing role in moving the Nation toward a more integrated society.

The Poverty and Race Research Action Council has published a more comprehensive summary of Justice Kennedy’s opinion, written by Florence Roisman, a law professor at Indiana University and an ICP board member, demonstrating in greater detail how unique and pathbreaking this opinion may be.8 It is recommended reading.

The Downside

There is, however, one cautionary note to all this. Despite his full-throated endorsement of integration, Justice Kennedy’s opinion also asserts that revitalization of inner-city neighborhoods can be a legitimate government policy, and disparate impact claims cannot be used to force local governments to choose desegregation over revitalization. His decision sends the case back to the lower courts to determine whether, in light of his opinion, the Texas practice should be permitted. Justice Kennedy’s opinion states: “This case, on remand [that is, upon reconsideration by the lower courts], may be seen simply as an attempt to second-guess which of two reasonable ap­proaches a housing authority should follow in the sound exercise of its discretion in allocating tax credits for low-income housing.”

It is unlikely that this instruction will result in the ICP victory being reversed–the Texas policy was so blatant and extreme that its allocation of tax credits to developers of housing in segregated communities cannot be termed “reasonable.” At the very least, housing proposals for segregated neighborhoods that purport to contribute to “revitalization” must be part of a concerted plan of revitalization that includes providing access to good jobs, improved transportation infrastructure, development of well-maintained parks and other community facilities, adequate funding of schools, and making the neighborhood attractive to middle class families, while preserving affordability for those with moderate and lower incomes. Only with such a plan will revitalization contribute to integration, not undermine it.

The LIHTC policies followed by the Texas Department of Housing had none of these characteristics. But Justice Kennedy’s endorsement of “two reasonable approaches” could pose problems for civil rights groups that challenge low-income housing developments that support segregation less blatantly than Dallas’s, but still fail to surround tax-credit projects in segregated communities with true neighborhood revitalization.

“Gilding the Ghetto”

Policymakers have long debated whether African Americans are well-served by new investments in ghetto communities. In 1949, Thurgood Marshall, then special counsel to the National Association for the Advancement of Colored People (NAACP), wrote a memo to President Harry Truman protesting the federal government’s refusal to permit African Americans to participate in suburban mortgage programs and the government’s insistence that African Americans remain in already segregated and dilapidated communities:

Housing in our society today is more than a shelter. It includes the whole environment in which the home is maintained. A well-built house in a poorly planned, impoverished, slum area, without adequate schools, community facilities, etc., does not provide good housing. Nor does a well-built house in a ghetto provide good housing in a democratic society. The [Federal Housing Administration] has recognized that good neighborhoods are an integral part of good housing, but it has equated “good neighborhood” with a “racially homogenous” neighborhood. Any such concept can only frustrate the most important objective of the National Housing Act–which is to provide for Americans a healthful home environment, both physically and psychologically, in which they will develop into democratic citizens.”9 

This was not an idea unique to Thurgood Marshall. When the Federal Housing Administration guaranteed loans to mass-production builders of whites-only suburban subdivisions in the mid-20^th century, those builders used these guarantees to build communities, not just houses. William Levitt, developer of the Levittowns, acknowledged that in defending his federally financed and racially restricted subdivisions, “Access to a swimming pool or a baseball diamond is as important a part of what a purchaser buys as solid walls or a strong roof because he’s not just buying a house, he’s buying a way of life.”10

In the years before the Fair Housing Act was passed, federal officials debated whether the needs of ghetto residents could be better addressed by investments in ghettos themselves, or by mobility programs that would assist ghetto residents in moving to middle class suburbs where they, and their children, could thrive. In January 1966, President Johnson proposed a model cities program to fund planning to desegregate metropolitan areas. In his message to Congress, Johnson said that “[t]he impact of the racial ghetto will become a thing of the past only when the Negro American can move his family wherever he can afford to do so.”11 Secretary of Housing and Urban Development Robert Weaver warned that the program funds could not be used only to improve the housing stock of the ghetto; “[we] must proceed in tandem with simultaneous moves to open up housing occupancy to all potential customers throughout the whole metropolitan area.”12 Yet when the program was adopted by Congress, Johnson’s proposal that funds be used to compel metropolitan areas to desegregate was deleted. Control was placed in the hands of local officials who refused to use the funds for desegregation, and made clear they would not accept funds if compelled to desegregate.13

Meanwhile, advocates of integration within the administration were being defeated by a combination of liberals, conservatives, segregationist Democrats, and radical civil rights advocates of Black Power to revive African American neighborhoods from within, not disperse their residents into the broader community. Some liberals agreed because they thought political resistance to integration was so strong that the goal was unachievable. They proposed instead programs to rebuild the ghettos into more livable and, in the view of some, even self-sustaining communities. Frances Fox Piven and Richard Cloward were the most influential of these liberals, writing in 1966 in The New Republic that “strategies must be found to improve ghetto housing without arousing the ire of powerful segments of the white community.” The reason we don’t invest more in ghetto revitalization, they said, was that suburban whites fear that attention to urban Negroes’ problems would be an invitation to black “invasion” of white neighborhoods. If liberals unequivocally forswear integration, they argued, more urban investments might be forthcoming.14 In retrospect, advocacy of integration seems quite an implausible explanation of why we’ve allowed truly disadvantaged neighborhoods to fester.

At a planning conference in late 1965, intended to lead to a full White House Conference on Civil Rights, National Urban League President Whitney Young stated what was emerging as a new consensus: “For years in the civil rights movement we said we did not want any new schools, we don’t want any new hospitals, we don’t want anything new in a Negro neighborhood because this reinforced the segregated pattern. What is our position now?” Young answered his own question by saying that he now only wanted quality schools and facilities in black neighborhoods.15

There was some pushback. Daniel Patrick Moynihan, an advisor to President Johnson (and subsequently to President Nixon) referred to the Model Cities program as “gilding the ghetto” and was an advocate within the administration of integration programs. He believed that if African American men could live where jobs were accessible, their unemployment would decline and families would be strengthened when black men could better contribute to support of their wives and children. The urban riots of 1967-1968 further demonstrated what an explosive threat the concentration of low-income and frequently jobless African Americans, encircled in ghettos by a suburban “white noose,” represented. The consensus temporarily shifted from support of ghetto-improvement to support of integrated (“fair”) housing. Hence, the Fair Housing Act.

In the first years of the Nixon administration, Secretary of Housing and Urban Development George Romney took steps to make integration of suburbs a priority, perhaps partly to distinguish himself from his Johnson administration predecessors. But political advisors eventually persuaded President Nixon that white opposition to integrating the suburbs would harm his re-election prospects in 1972, and Romney’s promotion of integration–by denying federal funds, for example, to suburbs that did not repeal zoning ordinances that prohibited multi-family housing–was abandoned.16 Subsequent administrations have continued efforts to gild the ghetto– “enterprise” or “empowerment” zones, for example, were popular for many years as efforts to lure jobs to ghettos by promising tax breaks to employers–but these efforts have had very limited success. Experience has shown that the revitalization approach on its own has been unsuccessful in remedying the segregation that Justice Kennedy so eloquently denounced.17 As the events in Ferguson, Baltimore and places between have demonstrated, the issues that bedeviled the Kerner Commission are with us still today.

Contemporary Federal Policy

Not only in Dallas, but nationwide, the LIHTC has been used more in fruitless attempts to shore up the ghetto than to disperse its inhabitants. Another federal housing initiative, the Housing Choice Voucher (“Section 8”) program that subsidizes the rents of low income, mostly minority households has also been used disproportionately to improve living conditions for African American families who remain in segregated neighborhoods.18 Landlords in middle class neighborhoods typically refuse to rent to voucher holders except in a few states and municipalities where such refusals are prohibited.19 The Department of Housing and Urban Development (HUD) also calculates the value of a voucher with a method that yields insufficient dollars to make middle class neighborhoods affordable, so vouchers are used predominantly in already segregated neighborhoods.

Justice Kennedy’s decision was strongest where he recapitulated the history of public support for racial segregation, and where he defined integration as a core purpose of the Fair Housing Act–he called integration the act’s “heartland.” But his decision was weakest where he speculated that disparate impact could be avoided by revitalizing ghettos as well as by supporting their residents in moves to higher opportunity neighborhoods. To capitalize on the strong part of Justice Kennedy’s opinion, advocates of integration can supplement the legitimacy of disparate impact analysis with reliance on another newly invigorated provision of the Fair Housing Act.

In addition to prohibiting discrimination or, by inference, prohibiting policies whose effect, or disparate impact, is to support segregation, the Fair Housing Act also requires every jurisdiction that receives HUD funds for any purpose to “affirmatively further fair housing” (AFFH). It is another euphemism, employed instead of a forthright statement that jurisdictions supported by HUD programs must “take aggressive steps to integrate.” This clause in the law has been inadequately enforced, at least since George Romney attempted to use it to justify his integration policies 45 years ago.

Since then, although the “affirmatively furthering” provision of the Act has been consistently interpreted by the courts to require pro-integration steps, HUD’s own enforcement of the provision has been inconsistent and weak. Enforcement improved somewhat during the first six years of the Obama administration, and now HUD is finally preparing to issue a rule clarifying how jurisdictions can comply with their AFFH obligations. The rule is weak in comparison to what the law demands, but strong in comparison to what has been attempted in the last 45 years.

The proposed rule requires jurisdictions to conduct a statistical assessment, with federal software and other help, of community resources and demographics, including the concentrations of disadvantaged populations, and to identify goals for the remedy of segregated conditions, of conditions inconsistent with the ideal of “fair housing.” The rule’s assumption seems to be that segregated jurisdictions want to do the right thing, but don’t have adequate information about their own demographics and resources to be able to do it. Giving suburbs around the country the benefit of the doubt in this respect may be a smart way to present AFFH obligations, but unsaid in the rule is what HUD proposes to do if and when suburbs don’t take the steps necessary to advance integration. Will federal funds actually be denied to white suburban communities that remain segregated? If so, will the Obama, or future administrations, resist the political backlash that, as during the Nixon years, will inevitably follow? Will the renewed awareness of our continuing racial divide, not only from Justice Kennedy’s opinion but from reflections after the murders in Charleston, give HUD more space to proceed?

In the wake of Justice Kennedy’s opinion, the AFFH rule may now have greater potential. With the Fair Housing Act now explicitly defined by the court as prohibiting racial segregation, HUD may have the wind at its back when it requires steps that affirmatively further integration. These should include, at a minimum:

• A ban on zoning ordinances that effectively prohibit multi-family housing
• A reform of the Section 8 program to give families the opportunity to leave ghettos for high opportunity neighborhoods–by increasing voucher amounts to realistic levels for middle class neighborhoods so families can rent apartments in multi-family buildings, even if those buildings are not subsidized by the LIHTC program; by providing counseling and other social supports for families willing to be integration “pioneers;” and by prohibiting landlords from refusing to accept families with vouchers
• And a prohibition on the use of the LIHTC program to locate additional low income residents in already segregated neighborhoods

Justice Kennedy’s opinion is a giant step forward. The proposed AFFH rule takes another step. The extent to which HUD and the courts will support civil rights groups like ICP when they attempt to climb these steps remains to be seen.

Richard Rothstein is a Research Associate of the Economic Policy Institute, a Senior Fellow of the Chief Justice Earl Warren Institute on Law and Social Policy at the University of California (Berkeley) School of Law, and a Contributing Editor of The American Prospect. His previous work on racial segregation and public education is posted at http://www.epi.org/people/richard-rothstein/. Readers may correspond with him about this article at riroth@epi.org.

Acknowledgments

The author gratefully acknowledges advice he received in preparing this article from Stephen Menendian, Assistant Director of the Haas Institute for a Fair and Inclusive Society at the University of California (Berkeley); from Board members of the Inclusive Communities Project Florence Roisman and Stacy Seicshnaydre; from Phil Tegeler, Executive Director of the Poverty and Race Research Action Council (PRRAC); and from John Paul Schnapper-Casteras, Special Counsel for Appellate and Supreme Court Advocacy at the NAACP Legal Defense and Educational Fund, Inc. Failure in some cases to heed their good advice, and errors of fact and interpretation that remain, are the sole responsibility of the author. Jenna Nichols provided research assistance. Harold Meyerson edited this article for The American Prospect.

Endnotes

1. Kerner Commission (National Advisory Commission on Civil Disorders). 1968. Report of the National Advisory Commission on Civil Disorders. Bantam Books, March, p. 8.

2. Kerner Commission (see note 1, above), pp. 1-2.

3. Kerner Commission (see note 1, above), pp. 2, 407.

4. Stacy E. Seicshnaydre. 2013. “Is Disparate Impact Having Any Impact? An Appellate Analysis of Forty Years of Disparate Impact Claims under the Fair Housing Act.” American University Law Review 63, December. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2336266

5. Seicshnaydre 2013. See note 4, above.

6. See, for example, Richard Rothstein. 2013. The Making of Ferguson. Public Policy at the Root of Its Troubles. The Economic Policy Institute, October 15.

7. Analysis by Stephen Menendian, Assistant Director, Haas Institute for a Fair and Inclusive Society, University of California (Berkeley).

8. Florence Wagman Roisman. 2015. “The Power of the Supreme Court’s Decision in the Fair Housing Act Case, TDCHA v. ICP.” Poverty and Race 24 (4), July/August, 17.The Poverty and Race Research Action Council.

9. Thurgood Marshall. 1949, “Memorandum to the President of the United States Concerning Racial Discrimination by the Federal Housing Administration.” February 1, p. 18. Proquest History Vault, NAACP Papers. Group II, Series A, General Office File, 1940-1955: Housing; Folder: 001521-009-0592

(Racial discrimination and FHA loan policies), Library of Congress (NAACP). (subscription required).

10. Rosalyn Baxandall and Elizabeth Ewen. 2000. Picture Windows. How the Suburbs Happened. Basic Books, p. 131.

11. Quoted in Mark Santow. In Press. Saul Alinsky and the Dilemma of Race in the Post-War City. University of Chicago Press.

12. Quoted in Santow, in press (see note 12, above).

13. Santow, in press (see note 12, above).

14. Frances Fox Piven and Richard A. Cloward. 1966. “Desegregated Housing. Who Pays for the Reformers’ Ideal?” The New Republic 255 (25), December 17; Frances Fox Piven and Richard A. Cloward. 1967. “The Case Against Urban Desegregation.” Social Work 12 (1), January.

15. Kevin Yuill. 1998. “The 1966 White House Conference on Civil Rights” The Historical Journal 41 (1), March: 259-282.

16. Mark Santow and Richard Rothstein. 2012. A Different Kind of Choice. Educational Inequality and the Continuing Significance of Racial Segregation. The Economic Policy Institute, August 22.

17. As an example of limited results, see this evaluation of an “empowerment zone” intervention in Baltimore: Stefanie DeLuca and Peter Rosenblatt. 2013. “Sandtown-Winchester–Baltimore’s Daring Experiment In Urban Renewal: 20 Years Later, What Are the Lessons Learned?” The Abell Report 26 (8), November.

18. Margery Austin Turner and G. Thomas Kingsley. 2008. Federal Programs for Addressing Low-Income Housing Needs. A Policy Primer. The Urban Institute, December. Table 3 (p. 5), and Table 4 (p. 7).

19. For a list of states with such prohibitions, as of March, 2015, see: Poverty and Race Research Action Council. 2015. “Expanding Choice: Practical Strategies For Building A Successful Housing Mobility Program. APPENDIX B: State, Local, and Federal Laws Barring Source-of-Income Discrimination.”

Bank Street graduates: I’m flattered to be sharing this occasion with you. With courage, you have chosen to enter or advance in the nation’s most critical profession, at a time when selfish and misguided elites have made public education, and its teachers, scapegoats for the unacceptable racial and economic inequality that those elites have permitted, indeed encouraged, to persist and grow in America.

It has often been said, by self-styled education reformers, that teaching in impoverished, segregated, communities is the “civil rights” cause of our time. That notion suggests breathtaking disrespect for the sacrifices of those who fought, and continue to fight, for adequate housing, good health care, quality early childhood and community programs, full employment at living wages, and racial integration. Yet our national education policy insists that we can ignore those unsolved problems and assure children’s success simply by recruiting better teachers who have higher expectations for their students.

Perhaps nothing better illustrates the ignorance of that view than the tragic story of Freddie Gray, the young African American man killed by Baltimore police last month. He was born prematurely to a heroin-addicted mother and spent months in hospital before he weighed enough to come home to a dilapidated apartment where lead paint was flaking off the walls. By 22 months, his lead level was four times as great as the dangerous level associated with serious loss of cognitive ability—that’s right, four times as great. Such lead poisoning also predicts lessened ability to self-regulate and greater tendency to aggression. For girls, it predicts higher rates of teen pregnancy. Before dropping out of high school, Freddie Gray had spent years in special education. He and his two sisters, also lead-exposed, all suffered from attention deficit disorder. Their schools were filled with other children with similar problems. Yet we have a federal law that says schools like these should be reconstituted—closed and teachers dismissed—unless every student reads and computes at a challenging level of proficiency.

If, as a nation, we were working to combat poverty and segregation, teaching would be one tool in a larger and all-important civil rights battle. But it would not be the only tool. It would complement housing, health, and economic policies that enable children like Freddie Gray, and his sisters, to arrive at school ready to benefit from the high-quality instruction that you and others like you are able to offer.

This leaves you, the graduates, with a burning question you will spend your teaching careers, at least for the foreseeable future, pondering: How do you do the good work for which Bank Street has prepared you, within a system that may undermine your efforts and thwart your students’ education?

In Atlanta, some educators responded to this question by engaging in criminal activity. I’ve been thinking a lot lately about the Atlanta educators who erased and corrected answers on their students’ tests. At first, I was troubled by their vindictive and selective prosecution and imprisonment, because such illegal activity is widespread in America today, where education is not the only place where we substitute numbers for quality. Veterans’ hospital administrators falsified records to pretend that prompt appointments were scheduled when no doctors were available. The Secretary of Veterans Affairs who imposed a system of accountability, but not resources to meet his standards, resigned. But there were no prosecutions of the VA staffers who committed fraud. Nursing home administrators routinely report, falsely, to Medicare that patient welfare standards are being met, yet none have been tried for altering public records. The mayor of Chicago has been re-elected with a claim that he’d reduced crime, a claim based on inaccurate statistics that police commanders filed with the FBI, but no commanders serve jail time for conspiracy.

I know that prosecutorial strategy can never be uniform; prosecutions, to some extent, must always be selective and I give you these examples without intending to excuse the Atlanta educators. But the contrast should trouble us.

Yet, as I thought about the Atlanta educators, I became troubled for another reason. I’m going to ask you to join me for a few minutes in thinking about this, because I hope it will prompt you to consider, as it has me, some terrible ethical dilemmas that you, as educators, will face. The Atlanta judge, expressing moral outrage, claimed that his harsh sentences—including years of jail time—were justified because the victims of cheating were students, denied remediation because test erasures disguised their failures. But we all know that in practice, their failures would not likely have resulted in special help; holding them back would make them more likely to drop out, not less so. One teacher told the judge that she believed that changing a young man’s score to passing would make his staying in school, and perhaps graduating, more likely, and would enable him to participate more fully in American society. Was she right? If so, does it justify engaging in criminal activity? Perhaps you think this an easy question to answer (although I’m not sure what the answer is), but many of the ethical dilemmas you will face are more complicated. Let’s consider a few.

Reputable psychometricians, as well as statistical and scientific commissions, have warned against the heavy use of standardized tests for accountability purposes. As these experts predicted, such testing has corrupted American education. The corruption is undeniable, although some may argue about how serious it has been.

Atlanta educators’ changing answers on tests was illegal as well as unethical, but such fraud has been widespread. Similar systematic cheating has taken place in Washington, D.C., in Philadelphia, in Houston, in many other places.

Yet legal corruption that inevitably results from using tests not to guide instruction, but to punish educators, is even more widespread. Indeed, it’s this legal and too-widely accepted corruption—encouraged in the name of “reform” by financial elites and by political leaders at the highest levels of government—that is driving the breakdown of our education system. The Atlanta crimes are just a tragic symptom.

The narrowing of curriculum is one form of corruption. It results when teachers, even entire school systems, reallocate instructional time to subjects that are tested, because there are no consequences for diminishing attention to civics, science, history, cooperative learning, critical thinking of all kinds, literature, the arts, physical fitness, or even mathematical reasoning. Teachers and schools suffer consequences only when students are not well-prepared to answer, or make educated guesses, on multiple choice questions in reading and math. Contemporary education policy has contempt for many of the ways that Bank Street has prepared you to enhance the civic, economic, and moral success of your students. The governor of this state proposes to base half your evaluation on students’ math and reading test scores. The inevitable narrowing of curriculum you will encounter is unethical, it’s corrupt, but it’s legal. How will you, individually and collectively, respond?

At the beginning of the school year, principals nationwide gather teachers to review prior year scores so that students just below the passing point can be identified for special attention. Because classroom time is limited, this widely-employed strategy necessarily robs attention from students who are far below or far above passing. It effectively tells you to ignore students like Freddie Gray. That kind of “data-driven instruction,” as policymakers smugly brand it, is unethical, it’s corrupt, but it’s legal. When required to attend disproportionately to students whose scores will determine a school’s adequate yearly progress, how will you, individually and collectively, respond?

Today, teachers learn to study prior tests, or the textbooks published by test-making companies, so they can prepare students for questions that are more likely to be asked, questions unrepresentative of the full curriculum. Coaching that focuses on trivial aspects of test-taking technique, or guessing strategies, is now called good teaching by intimidated school administrators, but this is not how to inspire students or construct lesson plans that encourage critical thinking. It is unethical, it’s corrupt, but it’s legal. When administrators ask you to predict test items for your students, how will you, individually and collectively, respond?

In schools where you work, you may sometimes see low-scoring students with behavioral issues opportunistically suspended just before testing day. That is unethical, it’s corrupt, but it’s legal. How will you, individually and collectively, respond?

I imagine that you, like me, believe that a teacher’s highest ethical obligation is to his students’ welfare. We understand that teachers are criminal if they enhance students’ passing rates by erasing and changing answers in test booklets. Is it equally unethical, should it perhaps even be criminal, for school systems to enhance passing rates by devoting excessive time to test preparation and robbing children of the broad curriculum they need to truly succeed?

When a teacher is enrolled in a corrupt system, where fulfillment of her legal and organizational responsibilities require her to harm her students, when does she owe it to herself and to her students to refuse?

How should teachers balance the good they may do by saving their right to participate in a corrupt system, with their professional and ethical obligations to shun corruption? If a teacher might be fired, or if her school might be closed, if she refused to commit the illegal act of test tampering, should she nonetheless refuse? If a teacher might be fired, or if her school might be closed, if she refused to engage in excessive test prep, should she nonetheless refuse to engage in that practice? If a teacher is expected to get her students to proficiency while no one worries about her students’ stress, or homelessness, or lead poisoning, or abuse, should she rebel?

Recently, the most powerful resistance to corruption in American education has been articulated by middle class, really upper-middle class, parents who’ve withdrawn their children from testing. Few teachers openly encourage this resistance; doing so risks being fired, and the loss of opportunity to nurture children. They might only be replaced by obedient teachers who do less well at nurturing. How should teachers respond?

I don’t pose these questions with any degree of self-assurance. I don’t have the answers. I’m only asking you to use the wonderful education you’ve received at Bank Street to help me, and help each other, figure it out. I do, however, know this. Ethical choices do not consist either of civil disobedience that refuses to participate in an unjust system, or of obsequious compliance with corrupt orders. Ethical lives are comprised of compromises, of considering where to take stands and where not to make waves. Throughout the careers on which you are about to embark, you will frequently have to decide when to resist, in both tiny and big ways, when to compromise, in both tiny and big ways, and when to capitulate, in both tiny and big ways. You will often have to decide whether you can do more good by going along, or more good by taking a risk, perhaps just a small one, sometimes a large one, with your security and career.

I am not telling you anything you don’t already know. Dedicated teachers devote a lot of attention, and anguish, to considering these ethical dilemmas. They do so mostly in private, sometimes with their colleagues, sometimes only with their spouses or partners, sometimes only to themselves. If I can summon up the arrogance to make any recommendation to you, it is to consider how you can make your anguish more public.

I am humbled to accept this honor you have bestowed on me today because I believe that Bank Street, of all places, may have prepared you to answer such questions in the countless times during the coming years when you will be confronted with them. Myself, I have the luxury of punditry. It’s easy for me to pose difficult questions, and I pay no price if my answers are glib. So my faith must be in you to carry this burden responsibly. Because I am confident that you are capable of doing so, you give me some faith in our future. Thank you.

The segregation of low-income minority families into economic and racial ghettos is one cause of the ongoing achievement gap in American education. Students from low-income neighborhoods, where parents themselves typically have less education, are exposed to less literacy at home and so come to school less prepared to take advantage of good instruction. If they live in more distressed neighborhoods with more crime and violence, they come to school under stress that interferes with learning. When such students are concentrated in classrooms, even the best of teachers must spend more time on remediation and less on grade-level instruction.1

The case before the court, Inclusive Communities Project v. Texas Department of Housing and Community Affairs, is important because the U.S. Supreme Court has increasingly made it more difficult to fight segregation in many areas of American life, requiring civil rights plaintiffs in most instances to prove that defendants consciously intended to discriminate. For example, the court has effectively ended its enforcement of elementary and secondary school desegregation by ruling that racially homogenous and isolated schools don’t violate the constitutional principles of Brown v. Board of Education, unless school districts purposely assign African American students to separate and inferior schools — if not by explicit ordinance, then by provable intent. When it comes to the Fair Housing Act, however, civil rights groups and the Department of Housing and Urban Development (HUD) have continued to insist that even when the intent to discriminate is not present or provable, housing policies are prohibited by law if they have a disparate impact on minorities by perpetuating minorities’ isolation. Whether a conservative majority of the Supreme Court prevents such enforcement of housing legislation by applying the narrow “intent” requirement of its radical constitutional theory will be decided in this case.

The lawsuit concerns the Low-Income Housing Tax Credit program (LIHTC) with which the federal government subsidizes construction of low-income housing nationwide by issuing tax credits to developers who build affordable rental apartments. The LIHTC has become the most important federal program to develop housing for lower-income families. But it has reinforced racial segregation in many metropolitan areas as developers propose, and state governments then approve, placement of a disproportionate share of LIHTC-financed family housing in low-income and minority neighborhoods.2

Defenders of the practice of placing LIHTC projects in disadvantaged neighborhoods contend (with some support in the LIHTC legislation itself) that it is easier to attract tenants by placing new units close to where they already live, and that such projects help revitalize slum neighborhoods.

But there is no evidence that placing more low-income housing in low-income minority neighborhoods has contributed to revitalization.3 Revitalizing low-income neighborhoods requires, at the least, bringing in mixed-income housing so that the resulting neighborhood is truly integrated and minority children can then go to integrated schools where their achievement can rise. But when developers have claimed to use LIHTC subsidies to “revitalize” neighborhoods, what they have most frequently meant is bringing more low-income (though newly constructed) housing to an already impoverished community, reinforcing its segregation.

The convenience of locating LIHTC projects in segregated neighborhoods is no reason to ignore the provisions of the Fair Housing Act of 1968. The act not only prohibits racial discrimination in housing but also requires recipients of federal funds to “affirmatively further” fair (i.e., integrated) housing in their communities. The Fair Housing Act does not permit neighborhood revitalization strategies that encourage more low-income and minority families to live in low-income and minority neighborhoods.

In 2008, the Inclusive Communities Project (ICP), a Dallas civil rights group, sued the state of Texas, claiming that the operation of the LIHTC program in Dallas violated the Fair Housing Act. ICP had been attempting to promote racial integration in the Dallas area by helping African American families who were eligible for rent subsidies (commonly known as “Section 8” vouchers) find affordable apartments in predominantly white neighborhoods. This was difficult because so many of the tax-subsidized family housing developments approved by the Texas Department of Housing were located in heavily minority and low-income communities.

The ICP complaint showed that in the city of Dallas, 92 percent of all LIHTC units for families are in census tracts where more than half of the residents are minority and 85 percent are in neighborhoods where at least 70 percent of residents are minority. Predominantly white neighborhoods contain 19 percent of all rental units in the city of Dallas, but only 3 percent of LIHTC units.4

Dallas is an extreme example of a nationwide pattern whereby the LIHTC apparently operates to perpetuate and sometimes to exacerbate segregation. A survey in the mid-1990s found that over half of LIHTC units were placed in inner-city neighborhoods, with only one-quarter placed in suburbs. Of the inner-city units, three-fourths were in census tracts where half of the households were low-income (i.e., below 80 percent of the area’s median income); half were placed in tracts where more than half of the residents were minority. Even when LIHTC projects were placed in suburbs, half were placed in low-income neighborhoods and 20 percent were in neighborhoods where more than half of the residents were minority.5

More recent analyses conclude that things have not improved much, if at all, since the earlier survey. A review of the program’s metropolitan area placements through 1999 found that 43 percent of LIHTC family housing units were located in high-minority neighborhoods (compared with 22 percent of all housing units that were located in such neighborhoods). This pattern didn’t increase segregation—it might even have diminished it a bit—because tenants in these projects would have been even more likely to live in high-minority neighborhoods were it not for the LIHTC program. But not increasing segregation is a low standard by which to judge the LIHTC program. It should affirmatively further integration, not leave segregation in place.6

Another analysis, covering LIHTC units completed through 2005, found that about three-fourths were placed in neighborhoods where poverty rates were at least 20 percent. These are very disadvantaged neighborhoods. Census tracts with poverty rates of 20 percent or more are likely also to have large numbers of households with very low incomes, even if not below the official poverty line. The study looked at the 46 states that have large metropolitan areas, and where in those metro areas the states placed their LIHTC units. Thirty-one of the 46 states placed a higher proportion of their LIHTC family units in relatively poor neighborhoods (where the poverty rate was at least 10 percent) than the proportion of all family rental units in such poor neighborhoods. Thirty-nine of the 46 states placed a majority of their LIHTC family units in census tracts where the minority population was greater than that of the metropolitan area as a whole.7

It is possible that these analyses understate the extent to which the LIHTC program perpetuates segregation. Many inner-ring suburbs today are in transition from predominantly white and middle class to predominantly minority and low income, as urban redevelopment projects and the demolition of public housing have forced low-income and minority families to search for new accommodations in the suburbs. If LIHTC units are being placed in such temporarily integrated communities, point-in-time analyses will not capture whether, over time, they are contributing to segregation. Recent events in Ferguson, Missouri, have called attention to this demographic shift.8

If families eligible for LIHTC housing were allowed to be more widely dispersed throughout metropolitan areas, including in predominantly white and middle-class neighborhoods, their children could more frequently attend integrated schools where resources (such as teacher time) exist to compensate for the disadvantages these children face and make their ultimate success more likely. When disadvantaged children live in neighborhoods where they can attend integrated schools, their achievement rises,9 without any harmful effects for middle-class children in those schools.

In response to the ICP complaint that Texas perpetuates segregation in its LIHTC program, a federal district court in Dallas found that the Texas Department of Housing had not intentionally discriminated; it was simply the case that eligible projects that developers proposed were in minority communities and the Texas Department approved the projects as presented if they met financial and design guidelines. But the lower court also found that the Fair Housing Act had been violated because the placement of LIHTC units had a disparate impact on minorities, i.e., it perpetuated racial segregation, even if there was no proof that segregation was the explicit intent of developers and government officials. The federal appeals court upheld these conclusions.

Housing developers and other supporters of the racial status quo in metropolitan housing patterns have long sought a case like this that might give the Supreme Court a chance to end the use of disparate impact as a standard. Continued (or greater) enforcement of a disparate impact standard could prevent developers from building subsidized apartments where they choose—because land might be cheaper or community opposition might be less in ghetto neighborhoods, for example.

The procedures of the Texas Department of Housing illustrate why the disparate impact standard is necessary to prevent seemingly nonracial policies from perpetuating segregation. The department can consider various factors in awarding its annual allotment of federal tax credits. Although it can give favorable consideration to proposals to build in “high opportunity” (e.g., low-poverty) neighborhoods, it can also give favorable consideration to proposals in low-income census tracts where many potential tenants already live. This factor is permitted by a provision in the federal LIHTC legislation, undermining the Fair Housing Act’s requirement that such programs affirmatively further integration. The Texas Department of Housing also gives extra consideration to proposals for housing in tracts where there is community support for low-income housing, illustrated by advocacy of neighborhood organizations and of the local state senator or representative. Permitting these considerations virtually invites middle-class opponents of integration to scuttle possible location of low- or moderate-income housing in their neighborhoods.

Opponents of the disparate impact standard have brought two previous cases to the Supreme Court, but they were withdrawn or settled by the parties before the Supreme Court had a chance to rule. Civil rights advocates fear that with the court now having another chance to decide such a case, it will use the opportunity to ban the disparate impact standard and annihilate one of the few tools available to pursue housing integration.

A case that went to the Supreme Court in 2013, but was settled before a ruling, originated in New Jersey and involved an urban renewal project that razed a low-income mostly black neighborhood. The project had the effect of forcing displaced residents to relocate to other segregated neighborhoods because it provided inadequate assistance for those families to find new housing in integrated communities. In that case, Township of Mount Holly, et al. v. Mt. Holly Gardens Citizens in Action, Inc., et al., the Economic Policy Institute, in collaboration with the Haas Institute for a Fair and Inclusive Society, and the Chief Justice Earl Warren Institute on Law and Social Policy, both at the University of California, Berkeley, organized a group of historians and other social scientists to file a supporting brief to the Supreme Court.10

With the Dallas ICP lawsuit now also going to the Supreme Court, EPI and the Haas Institute have prepared another amicus brief of historians and other social scientists in support of the ICP claim.11

Oral argument in the case is scheduled at the Supreme Court for January 21.

Our brief makes the following argument: Historically, the federal, state, and local governments have, in concert with one another and with private interests, acted to purposely segregate metropolitan areas by race. Once these patterns of segregation were established by deliberate racial policy, placement of federally subsidized housing (to be occupied predominantly by minority tenants) in already segregated neighborhoods unlawfully reinforces this segregation, even if Jim Crow policies are no longer in effect and no purposeful intent to segregate can be proven to motivate contemporary federally subsidized housing placement decisions. In other words, placement of LIHTC housing in racially isolated neighborhoods has a disparate impact on minority tenants’ right to desegregation, in violation of the Fair Housing Act. We also argue that it is unlawful for government agencies simply to respond to developer proposals without considering their racial impact, because the Fair Housing Act requires these agencies to affirmatively pursue integrated housing. As our brief recounts, a much earlier (1972) Supreme Court decision stated that the FHA’s main purpose is to “replace ghettos ‘by truly integrated and balanced living patterns.’” This purpose would be improperly repudiated if the Supreme Court were now to prohibit the disparate impact standard.

Our brief includes unique time-series maps, prepared by the Haas Institute, showing how the segregation of the Dallas metropolitan area persists into the present.

In addition to Lawrence Mishel, president of EPI; Christopher Edley, faculty director of the Warren Institute; and Stephen Menendian, assistant director of the Haas Institute; signatories to our amicus brief in the ICP case include notable historians and social scientists such as Elizabeth Anderson, Kendra Bischoff, John Brittain, Nancy Denton, Erica Frankenberg, Colin Gordon, Ian Haney-Lopez, Ira Katznelson, James Loewen, Myron Orfield, Beryl Satter, Patrick Sharkey, Gregory Squires, and others.

A history of the ICP case, including the initial ICP complaint and the lower-court decisions, are available at the website of the Poverty and Race Research Action Council.12 Our amicus brief of historians and social scientists is posted on the EPI website.13

That the Supreme Court agreed to hear this case is an ominous development. The court’s role is usually, and properly, to resolve disputes between federal appeals courts. In this case all 11 of the federal appeals courts that have heard cases like this have upheld the disparate impact standard. Thus, there is no benign explanation for the Supreme Court’s agreement to decide the ICP case.14

Acknowledgments

I am grateful to Stefanie DeLuca, Stephen Menendian, Florence Roisman, and Gregory Squires for advice and assistance in the preparation of this commentary. Remaining errors are mine alone.

About the author

Richard Rothstein (rrothstein@epi.org) is a research associate of the Economic Policy Institute and senior fellow of the Chief Justice Earl Warren Institute on Law and Social Policy, University of California, Berkeley, School of Law.

Endnotes

1. Richard Rothstein. 2014. Brown v. Board at 60: Why Have We Been So Disappointed? What Have We Learned? The Economic Policy Institute, April 17.

2. Philip Tegeler, Henry Korman, Jason Reece, and Megan Haberle. 2011. Opportunity and Location in Federally Subsidized Housing Programs. Poverty & Race Research Action Council, October.

3. Jill Khadduri. 2013. Creating Balance in the Locations of LIHTC Developments: The Role of Qualified Allocation Plans. Poverty & Race Research Action Council, February.

4.  Inclusive Communities Project, Inc. v. Texas Department of Housing and Community Affairs and Michael Gerber, et al. (N.D. Tex. 2008) (Civil Action No. 308 CV-546-D).

5. Sagit Leviner. 2004. “Affordable Housing and the Role of the Low Income Housing Tax Credit Program: A Contemporary Assessment.” Tax Lawyer 57, Summer: 869–904, at 884–885.

6. Keren M. Horn and Katherine M. O’Regan. 2011. “The Low Income Housing Tax Credit and Racial Segregation.” Housing Policy Debate 21 (3): 443–473, at 451, 467.

7. Jill Khadduri, Larry Buron, and Carissa Climaco. 2006. “Are States Using the Low Income Housing Tax Credit to Enable Families with Children to Live in Low Poverty and Racially Integrated Neighborhoods?” Poverty & Race Research Action Council, July 26.

8. Richard Rothstein. 2014. The Making of Ferguson: Public Policies at the Root of Its Troubles. The Economic Policy Institute, October 15.

9. Heather Schwartz. 2010. Housing Policy Is School Policy. Economically Integrative Housing Promotes Academic Success in Montgomery County, Maryland. The Century Foundation, October 15. Rucker C. Johnson. 2001. “Long-Run Impacts of School Desegregation and School Quality on Adult Attainments.” National Bureau of Economic Research Working Paper 16664, January (revised, May 2014).

10. Brief of Housing Scholars as Amici Curiae in Township of Mount Holly, NJ, et al., v. Mt. Holly Gardens Citizens in Action, Inc., et al. (U.S. No. 11-1507, dismissed Nov. 13, 2013). http://www.epi.org/files/2013/Mount-Holly-Housing-Scholars-Brief-Final.pdf

11. Brief of Housing Scholars as Amici Curiae in Texas Department of Housing and Community Affairs, et al. v. The Inclusive Communities Project, Inc. (U.S. No. 13-1371).

12. Poverty & Race Research Action Council. “Inclusive Communities Project v. Texas Dept. of Housing and Community Affairs, 2010 WL 3766714 (N.D. Tex. 2010).”

13. Brief of Housing Scholars as Amici Curiae in Texas Department of Housing and Community Affairs, et al. v. The Inclusive Communities Project, Inc. (U.S. No. 13-1371).

14. Joe Rich and Thomas Silverstein. 2015. “Symposium: The Case for Disparate Impact under the Fair Housing Act.” Scotusblog, January 6.

Abstract

Social and economic disadvantage – not only poverty, but a host of associated conditions – depresses student performance. Concentrating students with these disadvantages in racially and economically homogenous schools depresses it further. Schools that the most disadvantaged black children attend are segregated because they are located in segregated high-poverty neighborhoods, far distant from truly middle-class neighborhoods. Living in such high-poverty neighborhoods for multiple generations adds an additional barrier to achievement, and multigenerational segregated poverty characterizes many African American children today. Education policy is constrained by housing policy: it is not possible to desegregate schools without desegregating both low-income and affluent neighborhoods. However, the policy motivation to desegregate neighborhoods is hobbled by a growing ignorance of the nation’s racial history. It has become conventional for policymakers to assert that the residential isolation of low-income black children is now “de facto,” the accident of economic circumstance, demographic trends, personal preference, and private discrimination. But the historical record demonstrates that residential segregation is “de jure,” resulting from racially-motivated and explicit public policy whose effects endure to the present. Without awareness of the history of state-sponsored residential segregation, policymakers are unlikely to take meaningful steps to understand or fulfill the constitutional mandate to remedy the racial isolation of neighborhoods, or the school segregation that flows from it.

i.

We cannot substantially improve the performance of the poorest African American students – the “truly disadvantaged,” in William Julius Wilson’s phrase – by school reform alone. It must be addressed primarily by improving the social and economic conditions that bring too many children to school unprepared to take advantage of what even the best schools have to offer.

There are two aspects to this conclusion:

• First, social and economic disadvantage – not poverty itself, but a host of associated conditions – depresses student performance, and

• Second, concentrating students with these disadvantages in racially and economically homogenous schools depresses it further.

The individual predictors of low achievement are well documented:

• With less access to routine and preventive health care, disadvantaged children have greater absenteeism (Aysola, Orav, & Ayanian, 2011; Starfield, 1997), and they can’t benefit from good schools if they are not present.

• With less literate parents, they are read to less frequently when young, and are exposed to less complex language at home (Ayoub et al., 2009; Brooks-Gunn & Markman, 2005).

• With less adequate housing, they rarely have quiet places to study and may move more frequently, changing schools and teachers (Mehana & Reynolds, 2004; Raudenbush, Jean, & Art, 2011).

• With fewer opportunities for enriching after-school and summer activities, their background knowledge and organizational skills are less developed (Entwisle, Alexander, & Olson, 2000; Neuman & Celano, 2001).

• With fewer family resources, their college ambitions are constrained (Johnson, In Progress).

As these and many other disadvantages accumulate, lower social class children inevitably have lower average achievement than middle class children, even with the highest quality instruction.

When a school’s proportion of students at risk of failure grows, the consequences of disadvantage are exacerbated.

In schools with high proportions of disadvantaged children,

• Remediation becomes the norm, and teachers have little time to challenge those exceptional students who can overcome personal, family, and community hardships that typically interfere with learning.

• In schools with high rates of student mobility, teachers spend more time repeating lessons for newcomers, and have fewer opportunities to adapt instruction to students’ individual strengths and weaknesses.

• When classrooms fill with students who come to school less ready to learn, teachers must focus more on discipline and less on learning.

• Children in impoverished neighborhoods are surrounded by more crime and violence and suffer from greater stress that interferes with learning (Buka, Stichick, Birdthistle, & Earls, 2001; Burdick-Will et al., 2010; Farah et al., 2006).

• Children with less exposure to mainstream society are less familiar with the standard English that’s necessary for their future success (Sampson, Sharkey, & Raudenbush, 2008).

• When few parents have strong educations themselves, schools cannot benefit from parental pressure for higher quality curriculum, children have few college-educated role models to emulate and have few classroom peers whose own families set higher academic standards.

Nationwide, low-income black children’s isolation has increased. It’s a problem not only of poverty but of race.

• The share of black students attending schools that are more than 90 percent minority has grown from 34 percent to 39 percent from 1991 to 2011 (Orfield & Frankenberg, 2014, Table 8; Orfield & Lee, 2006, Table 3). In 1991, black students typically attended schools where 35 percent of their fellow students were white; by 2011, it had fallen to 28 percent (Orfield & Frankenberg, 2014, Table 4; Orfield, Kucsera, & Siegel-Hawley, 2012, Table 5).

• In 1988, black students typically attended schools in which 43 percent of their fellow students were low-income; by 2006 it had risen to 59 percent (Orfield, 2009).

• In cities with the most struggling students, the isolation is even more extreme. The most recent data show, for example, that in Detroit, the typical black student attends a school where 3 percent of students are white, and 84 percent are low income (Detroit Public Schools, 2009, Enrollment Demographics as of 11/19/2009).

It is inconceivable that significant gains can be made in the achievement of black children who are so severely isolated.

This school segregation mostly reflects neighborhood segregation. In urban areas, low-income white students are more likely to be integrated into middle-class neighborhoods and less likely to attend school predominantly with other disadvantaged students. Although immigrant low-income Hispanic students are also concentrated in schools, by the third generation their families are more likely to settle in more middle-class neighborhoods. Illustrative is that Latino immigrants who had resided in California for at least 30 years had a 65 percent homeownership rate prior to the burst of the housing bubble (Myers, 2008).1 It’s undoubtedly lower after the bubble burst, but still extraordinary.

The racial segregation of schools has been intensifying because the segregation of neighborhoods has been intensifying. Analyzing Census data, Rutgers University Professor Paul Jargowsky has found that in 2011, 7 percent of poor whites lived in high poverty neighborhoods, where more than 40 percent of the residents are poor, up from 4 percent in 2000; 15 percent of poor Hispanics lived in such high poverty neighborhoods in 2011, up from 14 percent in 2000; and a breathtaking 23 percent of poor blacks lived in high poverty neighborhoods in 2011, up from 19 percent in 2000 (Jargowsky, 2013).

In his 2013 book, Stuck in Place (2013), the New York University sociologist Patrick Sharkey defines a poor neighborhood as one where 20 percent of the residents are poor, not 40 percent as in Paul Jargowsky’s work. A 20-percent-poor neighborhood is still severely disadvantaged. In such a neighborhood, many, if not most other residents are likely to have very low incomes, although not so low as to be below the official poverty line.

Sharkey finds that young African Americans (from 13 to 28 years old) are now ten times as likely to live in poor neighborhoods, defined in this way, as young whites—66 percent of African Americans, compared to 6 percent of whites (Sharkey, 2013, p. 27, Fig. 2.1). What’s more, for black families, mobility out of such neighborhoods is much more limited than for whites. Sharkey shows that 67 percent of African American families hailing from the poorest quarter of neighborhoods a generation ago continue to live in such neighborhoods today. But only 40 percent of white families who lived in the poorest quarter of neighborhoods a generation ago still do so (Sharkey, 2013, p. 38, Fig. 2.6).

Considering all black families, 48 percent have lived in poor neighborhoods over at least two generations, compared to 7 percent of white families (Sharkey, 2013, p. 39). If a child grows up in a poor neighborhood, moving up and out to a middle-class area is typical for whites but an aberration for blacks. Black neighborhood poverty is thus more multigenerational while white neighborhood poverty is more episodic; black children in low-income neighborhoods are more likely than others to have parents who also grew up in such neighborhoods.

The implications for children’s chances of success are dramatic: For academic performance, Sharkey uses a scale like the familiar IQ measure, where 100 is the mean and roughly 70 percent of children score about average, between 85 and 115. Using a survey that traces individuals and their offspring since 1968, Sharkey shows that children who come from middle-class (non-poor) neighborhoods and whose mothers also grew up in middle-class neighborhoods score an average of 104 on problem-solving tests. Children from poor neighborhoods whose mothers also grew up in poor neighborhoods score lower, an average of 96.

Sharkey’s truly startling finding, however, is this: Children in poor neighborhoods whose mothers grew up in middle-class neighborhoods score an average of 102, slightly above the mean and only slightly below the average scores of children whose families lived in middle-class neighborhoods for two generations. But children who live in middle-class neighborhoods—yet whose mothers grew up in poor neighborhoods—score an average of only 98 (Sharkey 2013, p. 130, Fig. 5.5.).

Sharkey concludes that “the parent’s environment during [her own] childhood may be more important than the child’s own environment.” He calculates that “living in poor neighborhoods over two consecutive generations reduces children’s cognitive skills by roughly eight or nine points … roughly equivalent to missing two to four years of schooling” (Sharkey 2013, pp. 129-131).

Integrating disadvantaged black students into schools where more privileged students predominate can narrow the black-white achievement gap. Evidence is especially impressive for long term outcomes for adolescents and young adults who have attended integrated schools (e.g., Guryan, 2001; Johnson, 2011). But the conventional wisdom of contemporary education policy notwithstanding, there is no evidence that segregated schools with poorly performing students can be “turned around” while remaining racially isolated. Claims that some schools, charter schools in particular, “beat the odds” founder upon close examination. Such schools are structurally selective on non-observables, at least, and frequently have high attrition rates (Rothstein, 2004, pp. 61-84). In some small districts, or in areas of larger districts where ghetto and middle class neighborhoods adjoin, school integration can be accomplished by devices such as magnet schools, controlled choice, and attendance zone manipulations. But for African American students living in the ghettos of large cities, far distant from middle class suburbs, the racial isolation of their schools cannot be remedied without undoing the racial isolation of the neighborhoods in which they are located.

ii.

The Myth of De Facto Segregation

In 2007, the Supreme Court made integration even more difficult than it already was, when the Court prohibited the Louisville and Seattle school districts from making racial balance a factor in assigning students to schools, in situations where applicant numbers exceeded available seats (Parents Involved in Community Schools v. Seattle School District No. 1, 2007).

The plurality opinion by Chief Justice John Roberts decreed that student categorization by race (for purposes of administering a choice program) is unconstitutional unless it is designed to reverse effects of explicit rules that segregated students by race. Desegregation efforts, he stated, are impermissible if students are racially isolated, not as the result of government policy but because of societal discrimination, economic characteristics, or what Justice Clarence Thomas, in his concurring opinion, termed “any number of innocent private decisions, including voluntary housing choices.”

In Roberts’ terminology, commonly accepted by policymakers from across the political spectrum, constitutionally forbidden segregation established by federal, state or local government action is de jure, while racial isolation independent of state action, as, in Roberts’ view, in Louisville and Seattle, is de facto.

It is generally accepted today, even by sophisticated policymakers, that black students’ racial isolation is now de facto, with no constitutional remedy – not only in Louisville and Seattle, but in all metropolitan areas, North and South.

Even the liberal dissenters in the Louisville-Seattle case, led by Justice Stephen Breyer, agreed with this characterization. Breyer argued that school districts should be permitted voluntarily to address de facto racial homogeneity, even if not constitutionally required to do so. But he accepted that for the most part, Louisville and Seattle schools were not segregated by state action and thus not constitutionally required to desegregate.

This is a dubious proposition. Certainly, Northern schools have not been segregated by policies assigning blacks to some schools and whites to others – at least not since the 1940s; they are segregated because their neighborhoods are racially homogenous.

But neighborhoods did not get that way from “innocent private decisions” or, as the late Justice Potter Stewart once put it, from “unknown and perhaps unknowable factors such as in-migration, birth rates, economic changes, or cumulative acts of private racial fears” (Milliken v. Bradley, 1974).

In truth, residential segregation’s causes are both knowable and known – twentieth century federal, state and local policies explicitly designed to separate the races and whose effects endure today. In any meaningful sense, neighborhoods and in consequence, schools, have been segregated de jure. The notion of de facto segregation is a myth, although widely accepted in a national consensus that wants to avoid confronting our racial history.

iii.

De Jure Residential Segregation by Federal, State, and Local Government

The federal government led in the establishment and maintenance of residential segregation in metropolitan areas.

From its New Deal inception and especially during and after World War II, federally funded public housing was explicitly racially segregated, both by federal and local governments. Not only in the South, but in the Northeast, Midwest, and West, projects were officially and publicly designated either for whites or for blacks. Some projects were “integrated” with separate buildings designated for whites or for blacks. Later, as white families left the projects for the suburbs, public housing became overwhelmingly black and in most cities was placed only in black neighborhoods, explicitly so. This policy continued one originating in the New Deal, when Harold Ickes, President Roosevelt’s first public housing director, established the “neighborhood composition rule” that public housing should not disturb the pre-existing racial composition of neighborhoods where it was placed (Hirsch, 1998/1983, p. 14; Hirsch, 2000, p. 209; e.g., Hills v. Gautreaux, 1976; Rothstein, 2012). This was de jure segregation.

Once the housing shortage eased and material was freed for post-World War II civilian purposes, the federal government subsidized relocation of whites to suburbs and prohibited similar relocation of blacks. Again, this was not implicit, not mere “disparate impact,” but racially explicit policy. The Federal Housing and Veterans Administrations recruited a nationwide cadre of mass-production builders who constructed developments on the East Coast like the Levittowns in Long Island, Pennsylvania, New Jersey, and Delaware; on the West Coast like Lakewood and Panorama City in the Los Angeles area, Westlake (Daly City) in the San Francisco Bay Area, and several Seattle suburbs developed by William and Bertha Boeing; and in numerous other metropolises in between. These builders received federal loan guarantees on explicit condition that no sales be made to blacks and that each individual deed include a prohibition on re-sales to blacks, or to what the FHA described as an “incompatible racial element” (FHA, 1938; Jackson, 1985, pp. 207-209, 238; e.g., Silva, 2009). This was de jure segregation.

In addition to guaranteeing construction loans taken out by mass production suburban developers, the FHA, as a matter of explicit policy, also refused to insure individual mortgages for African Americans in white neighborhoods, or even to whites in neighborhoods that the FHA considered subject to possible integration in the future (Hirsch, 2000, pp. 208, 211-212). This was de jure segregation.

Although a 1948 Supreme Court ruling barred courts from enforcing racial deed restrictions, the restrictions themselves were deemed lawful for another 30 years and the FHA knowingly continued, until the Fair Housing Act was passed in 1968, to finance developers who constructed suburban developments that were closed to African-Americans (Hirsch, 2000, pp. 211-212). This was de jure segregation.

Bank regulators from the Federal Reserve, Comptroller of the Currency, Office of Thrift Supervision, and other agencies knowingly approved “redlining” policies by which banks and savings institutions refused loans to black families in white suburbs and even, in most cases, to black families in black neighborhoods – leading to the deterioration and ghettoization of those neighborhoods (see, e.g., USCCR, 1961, pp. 36-37, 42-51). This was de jure segregation.

Although specific zoning rules assigning blacks to some neighborhoods and whites to others were banned by the Supreme Court in 1917, explicit racial zoning in some cities was enforced until the 1960s. The Court’s 1917 decision was not based on equal protection but on the property rights of white owners to sell to whomever they pleased. Several large cities interpreted the ruling as inapplicable to their racial zoning laws because they prohibited only residence of blacks in white neighborhoods, not ownership. Some cities, Miami the most conspicuous example, continued to include racial zones in their master plans and issued development permits accordingly, even though neighborhoods themselves were not explicitly zoned for racial groups (Mohl, 1987; Mohl, 2001). This was de jure segregation.

In other cities, following the 1917 Supreme Court decision, mayors and other public officials took the lead in organizing homeowners associations for the purpose of enacting racial deed restrictions. Baltimore is one example where the mayor organized a municipal Committee on Segregation to maintain racial zones without an explicit ordinance that would violate the 1917 decision (Power, 1986; Power, 2004). This was de jure segregation.

In the 1980s, the Internal Revenue Service revoked the tax-exemption of Bob Jones University because it prohibited interracial dating. The IRS believed it was constitutionally required to refuse a tax subsidy to a university with racist practices. Yet the IRS never challenged the pervasive use of tax-favoritism by universities, churches, and other non-profit organizations and institutions to enforce racial segregation. The IRS extended tax exemptions not only to churches where such associations were frequently based and whose clergy were their officers, but to the associations themselves, although their racial purposes were explicit and well-known. This was de jure segregation.

Churches were not alone in benefitting from unconstitutional tax exemptions. Robert Hutchins, known to educators for reforms elevating the liberal arts in higher education, was president and chancellor of the tax-exempt University of Chicago from 1929 to 1951. He directed the University to sponsor neighborhood associations to enforce racially restrictive deeds in its nearby Hyde Park and Kenwood neighborhoods, and employed the University’s legal department to evict black families who moved nearby in defiance of his policy, all while the University was subsidized by the federal government by means of its tax-deductible and tax-exempt status (Hirsch, 1998/1983, pp. 144-145; Plotkin 1999, pp. 122-125). This was de jure segregation.

Urban renewal programs of the mid-twentieth century often had similarly undisguised purposes: to force low-income black residents away from universities, hospital complexes, or business districts and into new ghettos. Relocation to stable and integrated neighborhoods was not provided; in most cases, housing quality for those whose homes were razed was diminished by making public housing high-rises or overcrowded ghettos the only relocation option (Hirsch, 2000, pp. 217-222; Weaver, 1948, p. 324, USCCR, 1961, p. 96). This was de jure segregation.

Where integrated or mostly-black neighborhoods were too close to white communities or central business districts, interstate highways were routed by federal and local officials to raze those neighborhoods for the explicit purpose of relocating black populations to more distant ghettos or of creating barriers between white and black neighborhoods. Euphemisms were thought less necessary then than today: according to the director of the American Association of State Highway Officials whose lobbying heavily influenced the interstate program, “some city officials expressed the view in the mid-1950’s that the urban Interstates would give them a good opportunity to get rid of the local ‘niggertown’” (Schwartz, 1976, p. 485 n. 481). This was de jure segregation.

For a sense of how federal policy was infused with segregationist impulses, consider the 1949 Congressional debate over President Harry S Truman’s proposal for a massive public housing program. Conservative Republicans, opposed to federal involvement in the private housing market, devised a “poison pill” guaranteed to defeat the plan. They introduced amendments in the House and Senate requiring that public housing be operated in a non-segregated manner, knowing that if such amendments were adopted, public housing would lose its Southern Democratic support and the entire program would go down to defeat.

The Senate floor leader of the housing program was the body’s most liberal member, Paul Douglas, a former economist at the University of Chicago. Supported by other leading liberal legislators (Senator Hubert Humphrey from Minnesota, for example), Senator Douglas appealed on the floor of the Senate to his fellow Democrats and civil rights leaders, beseeching them to defeat the pro-integration amendment: “I should like to point out to my Negro friends what a large amount of housing they will get under this act… I am ready to appeal to history and to time that it is in the best interests of the Negro race that we carry through the housing program as planned, rather than put in the bill an amendment which will inevitably defeat it…”

The Senate and House each then considered and defeated proposed amendments that would have prohibited segregation and racial discrimination in federally funded public housing programs, and the 1949 Housing Act, with its provisions for federal finance of public housing, was adopted (Davies, 1966, p. 108; Julian & Daniel, 1989, pp. 668-669). It permitted local authorities in the North as well as the South to design separate public housing projects for blacks and whites, or to segregate blacks and whites within projects. And they did so.

Although there was an enormous national housing shortage at the time, one that denied millions of African Americans a decent place to live, it remains an open question whether it really was in their best interests to be herded into segregated projects, where their poverty was concentrated and isolated from the American mainstream.

It was not, however, federal policy alone that segregated the metropolitan landscape. State policy contributed as well.

Real estate is a highly regulated industry. State governments require brokers to take courses in ethics and exams to keep their licenses. State commissions suspend or even lift licenses for professional and personal infractions – from mishandling escrow accounts to failing to pay personal child support. But although real estate agents openly enforced segregation, state authorities did not punish brokers for racial discrimination, and rarely do so even today when racial steering and discriminatory practices remain (Galster & Godfrey, 2005). This misuse of regulatory authority was, and is, de jure segregation.

Local officials also played roles in violation of their constitutional obligations. Public police and prosecutorial power was used nationwide to enforce racial boundaries. Illustrations are legion. In the Chicago area, police forcibly evicted blacks who moved into an apartment in a white neighborhood; in Louisville, the locus of Parents Involved, the state prosecuted and convicted (later reversed) a white seller for sedition after he sold his white-neighborhood home to a black family (Braden, 1958). Everywhere, North, South, East, and West, police stood by while thousands (not an exaggeration) of mobs set fire to and stoned homes purchased by blacks in white neighborhoods, and prosecutors almost never charged well-known and easily identifiable mob leaders (Rubinowitz & Perry, 2002). This officially sanctioned abuse of the police power also constituted de jure segregation.

An example from Culver City, a suburb of Los Angeles, illustrates how purposeful state action to promote racial segregation could be. During World War II, its state’s attorney instructed the municipality’s air raid wardens, when they went door-to-door advising residents to turn off lights to avoid providing guidance to Japanese bombers, also to solicit homeowners to sign restrictive covenants barring blacks from residence in the community (“Communiques from the housing front,” 1943). This was de jure segregation.

Other forms abound of racially explicit state action to segregate the urban landscape, in violation of the Fifth, Thirteenth, and Fourteenth Amendments. Yet the term “de facto segregation,” describing a never-existent reality, persists among otherwise well-informed advocates and scholars. The term, and its implied theory of private causation, hobbles our motivation to address de jure segregation as explicitly as Jim Crow was addressed in the South or apartheid was addressed in South Africa.

Private prejudice certainly played a very large role. But even here, unconstitutional government action not only reflected but helped to create and sustain private prejudice. In part, white homeowners’ resistance to black neighbors was fed by deteriorating ghetto conditions, sparked by state action. Seeing slum conditions invariably associated with African Americans, white homeowners had a reasonable fear that if African Americans moved into their neighborhoods, these refugees from urban slums would bring the slum conditions with them.

Yet these slum conditions were supported by state action, by overcrowding caused almost entirely by the refusal of the federal government to permit African Americans to expand their housing supply by moving to the suburbs, and by municipalities’ discriminatory denial of adequate public services (Colfax, 2009, Kerner Commission, 1968, pp. 14, 145, 273; Satter, 2009). In the ghetto,

• garbage was collected less frequently,

• predominantly African American neighborhoods were re-zoned for mixed (i.e., industrial, or even toxic) use,

• streets remained unpaved,

• even water, power, and sewer services were less often provided.

This was de jure segregation, but white homeowners came to see these conditions as characteristics of black residents themselves, not as the results of racially motivated municipal policy.

iv.

The Continuing Effects of State Sponsored Residential Segregation

Even those who understand this dramatic history of de jure segregation may think that because these policies are those of the past, there is no longer a public policy bar that prevents African Americans from moving to white neighborhoods. Thus, they say, although these policies were unfortunate, we no longer have de jure segregation. Rather, they believe, the reason we don’t have integration today is not because of government policy but because most African Americans cannot afford to live in middle class neighborhoods.

This unaffordability was also created by federal, state, and local policy that prevented African Americans in the mid-twentieth century from accumulating the capital needed to invest in home ownership in middle-class neighborhoods, and then from benefiting from the equity appreciation that followed in the ensuing decades.

Federal labor market and income policies were racially discriminatory until only a few decades ago. In consequence, most black families, who in the mid-twentieth century could have joined their white peers in the suburbs, can no longer afford to do so.

The federal civil service was first segregated in the twentieth century, by the administration of President Woodrow Wilson. Under rules then adopted, no black civil servant could be in a position of authority over white civil servants, and in consequence, African Americans were restricted and demoted to the most poorly paid jobs (King, 1995).

The federal government recognized separate black and white government employee unions well into the second half of the twentieth century. For example, black letter carriers were not admitted to membership in the white postal service union. Black letter carriers had their own union but the Postal Service would only hear grievances from the white organization (“Same work, different unions,” 2011).

At the behest of Southern segregationist Senators and Congressmen, New Deal labor standards laws, like the National Labor Relations Act and the minimum wage law, excluded from coverage, for undisguised racial purposes, occupations in which black workers predominated (Katznelson, 2013).

The National Labor Relations Board certified segregated private sector unions, and unions that entirely excluded African Americans from their trades, into the 1970s (Foner, 1976; Hill, 1977; Independent Metal Workers, 1964).

State and local governments maintained separate, and lower, salary schedules for black public employees through the 1960s (e.g., Rothstein & Miles, 1995).

In these and other ways, government played an important and direct role in depressing the income levels of African American workers below the income levels of comparable white workers. This, too, contributed to the inability of black workers to accumulate the wealth needed to move to equity-appreciating white suburbs.

Today (2010), median black family income is 61 percent of the white median, but black median family wealth (net worth, or assets minus debts) is an astonishingly low 5 percent of the white median (Mishel, Bivens, Gould, & Shierholz, 2012, Tables 2.5 and 6.5). The wealth gap does not only reflect the desperate financial situation of the poorest disadvantaged families. Thomas Shapiro, co-author of Black Wealth/White Wealth (1995), has estimated the relative wealth by race for middle-class families. Calculating relative wealth for black and white families with annual incomes of $60,000—slightly above the national median—from his most recent data in 2007, he found that black middle-class wealth was only 22 percent of whites’ (T. Shapiro, personal communication, May 3, 2014). This gap has undoubtedly widened since 2007 because the housing collapse harmed blacks—who were targeted disproportionately for exploitative subprime loans and exposed to foreclosure—more than whites.

In short, middle-class African Americans and whites are in different financial straits. Total family wealth (including the ability to borrow from home equity) has more impact than income on high-school graduates’ ability to afford college. Wealth also influences children’s early expectations that they will attend and complete college. White middle-class children are more likely to prepare for, apply to, and graduate from college than black children with similar family incomes. This widely acknowledged difference in educational outcomes is, in considerable part, the enduring effect of de jure segregated housing policies of the 20^th century, policies that prevented African Americans from accumulating, and bequeathing, wealth that they might otherwise have gained from appreciating real estate.

Levittown, described above as a Long Island suburban development built with federal financing and restricted to whites, illustrates these enduring effects. William Levitt sold his houses to whites in 1947 for $7,000, about two and a half times the national median family income (Jackson, 1985, pp. 231-245; Williamson, 2005). White veterans could get VA or FHA loans with no down payments. Today, these homes typically sell for $400,000, about six times the median income, and FHA loans require 20 percent down. Although African Americans are now permitted to purchase in Levittown, it has become unaffordable. By 2010 Levittown, in a metropolitan region with a large black population, was still less than 1 percent black. White Levittowners can today easily save for college. Blacks denied access to the community are much less likely to be able to do so.

Segregation in many other suburbs is now locked in place by exclusionary zoning laws – requiring large setbacks, prohibiting multi-family construction, or specifying minimum square footage – in suburbs where black families once could have afforded to move in the absence of official segregation, but can afford to do so no longer with property values appreciated.

Mid-twentieth century policies of de jure racial segregation continue to have impact in other ways, as well. A history of state-sponsored violence to keep African Americans in their ghettos cannot help but influence the present-day reluctance of many black families to integrate.

Today, when facially race-neutral housing or redevelopment policies have a disparate impact on African Americans, that impact is inextricably intertwined with the state-sponsored system of residential segregation that we established.

v.

Miseducating Our Youth

Reacquainting ourselves with that history is a step towards confronting it. When knowledge of that history becomes commonplace, we will conclude that Parents Involved was wrongly decided by the Supreme Court in 2007: Louisville, Seattle and other racially segregated metropolitan areas not only have permission, but a constitutional obligation to integrate.

But this obligation cannot be fulfilled by school districts alone. As noted above, in some small cities, and in some racial border areas, some racial school integration can be accomplished by adjusting attendance zones, establishing magnet schools, or offering more parent-student choice. This is especially true – but only temporarily – where neighborhoods are in transition, either from gradual urban gentrification, or in first-ring suburbs to which urban ghetto populations are being displaced. These school integration policies are worth pursuing, but generally, our most distressed ghettos are too far distant from truly middle-class communities for school integration to occur without racially explicit policies of residential desegregation. Many ghettos are now so geographically isolated from white suburbs that voluntary choice, magnet schools, or fiddling with school attendance zones can no longer enable many low-income black children to attend predominantly middle class schools (Rothstein & Santow, 2012).

Instead, narrowing the achievement gap will also require housing desegregation, which history also shows is not a voluntary matter but a constitutional necessity – involving policies like voiding exclusionary zoning, placing scattered low and moderate income housing in predominantly white suburbs, prohibiting landlord discrimination against housing voucher holders, and ending federal subsidies for communities that fail to reverse policies that led to racial exclusion.

We will never develop the support needed to enact such policies if policymakers and the public are unaware of the history of state-sponsored residential segregation. And we are not doing the job of telling young people this story, so that they will support more integration-friendly policies in the future. Elementary and secondary school curricula typically ignore, or worse, misstate this story. For example,

• In over 1,200 pages of McDougal Littell’s widely used high school textbook, The Americans (2007, p. 494), a single paragraph is devoted to 20th century “Discrimination in the North.” It devotes one passive-voice sentence to residential segregation, stating that “African Americans found themselves forced into segregated neighborhoods,” with no further explanation of how public policy was responsible.

• Another widely used textbook, Prentice Hall’s United States History (2010, pp. 916-917), also attributes segregation to mysterious forces: “In the North, too, African Americans faced segregation and discrimination. Even where there were no explicit laws, de facto segregation, or segregation by unwritten custom or tradition, was a fact of life. African Americans in the North were denied housing in many neighborhoods.”

• History Alive! (2008, p. 423), a popular textbook published by the Teachers’ Curriculum Institute, teaches that segregation was only a Southern problem: “Even New Deal agencies practiced racial segregation, especially in the South,” failing to make any reference to what Ira Katznelson, in his 2013 Fear Itself, describes as FDR’s embrace of residential segregation nationwide in return for Southern support of his economic policies.

Avoidance of our racial history is pervasive and we are ensuring the persistence of that avoidance for subsequent generations. For the public and policymakers, re-learning our racial history is a necessary step because remembering this history is the foundation for an understanding that aggressive policies to desegregate metropolitan areas are not only desirable, but a constitutional obligation. Without fulfilling this obligation, substantially narrowing the achievement gap, or opening equal educational opportunity to African Americans, will remain a distant and unreachable goal.

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Williamson, J. (2005). Retrofitting ‘Levittown’. Places Journal, 17(2), 46-51. Retrieved from http://escholarship.org/uc/item/0r57v5j3

1. Compare to overall national rates in 2007 (in percents): all, 68; whites, 75; blacks, 47; Hispanics (all generations), 50 (U.S. Census Bureau, 2014).

Business executives and politicians endlessly complain that there is a “shortage” of qualified Americans and that the U.S. must admit more high-skilled guest workers to fill jobs in STEM fields: science, technology, engineering and math. This claim is echoed by everyone from President Obama and Rupert Murdoch to Mark Zuckerberg and Bill Gates.

Yet within the past month, two odd things occurred: Census reported that only one in four STEM degree holders is in a STEM job, and Microsoft announced plans to downsize its workforce by 18,000 jobs. Even so, the House is considering legislationthat, like the Senate immigration bill before it, would increase to unprecedented levels the supply of high-skill guest workers and automatic green cards to foreign STEM students.

As longtime researchers of the STEM workforce and immigration who have separately done in-depth analyses on these issues, and having no self-interest in the outcomes of the legislative debate, we feel compelled to report that none of us has been able to find any credible evidence to support the IT industry’s assertions of labor shortages.

Stagnant wages

If a shortage did exist, wages would be rising as companies tried to attract scarce workers. Instead, legislation that expanded visas for IT personnel during the 1990s has kept average wages flat over the past 16 years. Indeed, guest workers have become the predominant source of new hires in these fields.

Those supporting even greater expansion seem to have forgotten about the hundreds of thousands of American high-tech workers who are being shortchanged — by wages stuck at 1998 levels, by diminished career prospects and by repeated rounds of layoffs.

The facts are that, excluding advocacy studies by those with industry funding, there is a remarkable concurrence among a wide range of researchers that there is an ample supply of American workers (native and immigrant, citizen and permanent resident) who are willing and qualified to fill the high-skill jobs in this country. The only real disagreement is whether supply is two or three times larger than the demand.

Unfortunately, companies are exploiting the large existing flow of guest workers to deny American workers access to STEM careers and the middle-class security that should come with them. Imagine, then, how many more Americans would be frozen out of the middle class if politicians and tech moguls succeeded in doubling or tripling the flow of guest workers into STEM occupations.

Redundant reforms

Another major, yet often overlooked, provision in the pending legislation would grant automatic green cards to any foreign student who earns a graduate degree in a STEM field, based on assertions that foreign graduates of U.S. universities are routinely being forced to leave. Such claims are incompatible with the evidence that such graduates have many paths to stay and work, and indeed the “stay rates” for visiting international students are very high and have shown no sign of decline. The most recent study finds that 92% of Chinese Ph.D. students stay in the U.S. to work after graduation.

The tech industry’s promotion of expanded temporary visas (such as the H-1B) and green cards is driven by its desire for cheap, young and immobile labor. It is well documented that loopholes enable firms to legally pay H-1Bs below their market valueand to continue the widespread age discrimination acknowledged by many in the tech industry.

When considering the credibility of the industry’s repetitive claims of “shortages,” it is worth recalling its history of misbehavior in hiring and employment. The most recent example was the proposed $300 million legal settlement of a class action against companies such as Google, Apple, Intel and Adobe for anti-competitive collusion to suppress the pay of highly skilled employees, including unlawful agreements to not recruit each others’ workers.

IT industry leaders have spent lavishly on lobbying to promote their STEM shortage claims among legislators. The only problem is that the evidence contradicts their self-interested claims.

Ron Hira is a professor of public policy at Howard University. Paula Stephan is a professor of economics at Georgia State University.Hal Salzman is a Rutgers University professor of planning & public policy at the J.J. Heldrich Center for Workforce Development. Michael Teitelbaum is senior research associate at the Harvard Law School’s Labor and Worklife Program. Norm Matloff is a professor of computer science at the University of California-Davis.

The Great Recession officially ended five years ago this month, but the labor market has made only agonizingly slow progress towards full employment. We’ve had an unemployment rate of 6.3 percent or more for more than five and a half years; as a reminder, the highest the unemployment rate ever got in the early 2000s downturn was 6.3 percent, for one month. And even this headline unemployment rate probably overstates the true degree of labor market weakness, as it has fallen in large part in recent years because people have left the labor force in large numbers—and not just voluntary retirees. If the job market improves in coming years, it is very likely that many of these “missing workers” will return. Because of the ongoing weakness in the labor market, long-term unemployment remains extremely elevated. Though the labor market is headed in the right direction, unemployed workers still vastly outnumber job openings in every major industry, and the prospects for job seekers remain dim.

The labor force is comprised of employed people and jobless people who are actively seeking work. Before the Great Recession started, just 0.7 percent of the labor force was unemployed long-term. That shot up to 4.4 percent by the spring of 2010, and has since dropped part-way back to 2.2 percent. This may not sound high on the face of it, but it is still three times higher than what it was before the recession began and represents 3.4 million long-term unemployed workers. Furthermore, outside of the Great Recession and its aftermath, it is higher than at any other time in more than 30 years, including the entirety of the two recessions prior to the Great Recession. Importantly, it is also far higher than any period in the past when Congress has decided to end extended unemployment benefits. In short, we remain in a long-term unemployment crisis, even if you wouldn’t know it judging from too many policymakers’ actions.

It is important to note that there’s no real puzzle as to why long-term unemployment is high: economic growth remains extraordinarily weak. And this weakness is driven simply by an ongoing shortfall of aggregate demand (spending by households, businesses, and governments) relative to potential output.

The long-term unemployed are not fundamentally different than other unemployed workers, and there is no evidence that the mere fact of being unemployed long-term fundamentally damages workers’ productivity or that long-term unemployment cannot be solved through macroeconomic policy to boost the aggregate demand shortfall. In fact, today’s high long-term unemployment rate is exactly what you’d expect given the overall weak labor market, how long it has been so weak, and pre-recession trends in long-term unemployment. In other words, what is going on now with long-term unemployment is right in line with the historical relationship between long-term unemployment and the overall unemployment rate. Today’s long-term unemployment crisis is part and parcel of the weak labor market more broadly and there is no evidence that the long-term unemployed have somehow hardened into structurally unemployed workers with the wrong or depreciated skills.

One way to see this is to note that today’s long-term unemployment crisis is not confined to workers who don’t have the right education or happen to be looking for work in specific occupations or industries where jobs aren’t available. Long-term unemployment is elevated in every age, gender, and racial and ethnic group, and it’s elevated in every major occupation, in every major industry, and at all levels of educational attainment. Some groups definitely have lower long-term unemployment rates than others, but that is always true, in good times and bad. The key point is that for all groups, the long-term unemployment rate is substantially higher now than it was before the recession started.

Elevated long-term unemployment for all groups, like we see today, and the fact that long-term unemployment has improved right in line with other measures of labor market improvement means that today’s long-term unemployment crisis is not due to something wrong with these particular workers. It is overwhelmingly due to more than six years of weak business hiring across the board. And this weak hiring is simply due to the aggregate demand shortfall. Employers are not stupid and do not make hiring decisions on a whim. Instead, they hire when they see demand for their goods and services pick up enough to force them to hire. Until policymakers act to boost that demand, hiring will be slower and long-term unemployment will be higher than it should be.

I am now going to talk about what we should do about this. My role on this panel is to identify what economic analysis tells us should be done, not what is necessarily politically feasible. Given that demand is the problem, we should be:

• Passing extended benefits again to help the long-term unemployed, who are the ones who have been the hardest hit by the lasting effects of the Great Recession,
• Undertaking other measures that also stimulate aggregate demand, and
• Enacting policies that spread total hours worked across more workers.

Taking these in turn:

• Extended UI benefits would do the obvious thing of providing a lifeline to those workers and their families who have suffered the blow of job loss when the labor market is historically weak. Some have argued that extended benefits could actually make the labor market weaker by giving laid-off workers an incentive not to return to work. The empirical evidence strongly rejects this concern. The most rigorous papers on this show that there is almost no delay in returning to work—for example a paper by Henry Farber of Princeton and Rob Valletta of the San Francisco Fed show that UI extensions in the Great Recession increased the time it took UI recipients to take another job by three percent. Further, a slight increase in search-time is actually a benefit of UI—the point is to give liquidity-constrained unemployed workers a little space to find a job-match that will provide durable benefits to both them and potential employers. For example, it may not be optimal for either workers or employers for people with young kids to be forced to take the first job available even if it comes with a two hour commute, as they will likely quit when as soon as a more convenient job becomes available.

Besides not hindering job-search, UI extensions also stimulate the macroeconomy and this stimulus generates jobs. A wealth of macroeconomic studies confirm that spending on UI extensions is one of the most effective mechanisms available for injecting money into the economy, since the long-term unemployed are, almost by definition, cash strapped and very likely to immediately spend their UI benefits. This spending creates demand for goods and services, and who provides goods and services? Workers. Thus, it generates jobs. We estimate that if we allow UI extensions to lapse for all of 2014, it will cost the U.S. economy about 300,000 jobs by the end of the year.

• Aside from UI extensions, policymakers should also focus on other policies that will generate demand for U.S. goods and services. In the current moment, these are policies such as fiscal relief to states, substantial additional investment in infrastructure, including repairing old and crumbling schools, providing aid to cities like Detroit to tear down blighted buildings and invest in public transportation, new schools, and establishing direct job creation programs in communities particularly hard-hit by unemployment. This could also include continued monetary support from the Federal Reserve and efforts to end the practice of trading partners engaging in currency management that hurts the competitiveness of U.S. companies and allows aggregate demand to leak away from the U.S. economy.

• Policies that would spread the total hours of work across more workers could also bring down unemployment from the supply side. In particular, work sharing would encourage employers who experience a drop in demand to cut back average hours per employee instead of cutting back the number of workers on staff. Some countries, for example Germany, have used work sharing very successfully. Instead of workers being laid off and receiving unemployment benefits, the German government can help companies keep employees, working fewer hours, on their payrolls by subsidizing their wages with the money saved on unemployment benefits.

Some claim that we’ve missed the boat on work sharing because layoffs are now back down to pre-recession levels, and that the problem in our labor market right now is not too many layoffs, rather it’s lack of hiring. That’s actually true, but while layoffs are no more prevalent now than before the recession began, the consequences to getting laid off are much more severe than they are during normal times because we have such weak hiring. And there are in fact a lot of layoffs every month—even now our labor market has a lot of churn. There are currently around 1.5 million layoffs every month, meaning a work-sharing program that prevented even a small fraction of those could still significantly reduce unemployment.

Chief Justice John Roberts says that “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” In university admissions, this means becoming “colorblind,” taking no affirmative action to favor African Americans. Apparently intimidated by Roberts’s Supreme Court plurality, many university officials, liberals, and civil-rights advocates have exchanged their former support of affirmative action for policies that appear closer to Roberts’s.

In effect, these newer plans say that the way to stop discrimination on the basis of race is to pretend colorblindness but devise subterfuges to favor African Americans. One approach is to favor low-income students regardless of race. Another adopts the Supreme Court’s embrace of diversity as educationally beneficial, prompting universities to enroll disadvantaged minority students for this purpose while making no obvious attempt to remedy historic wrongs. Some persuade themselves that these are the best possible policies.

In recent years, Justice Ruth Bader Ginsburg has been one of the few leading public figures, on or off the Court, unabashedly willing to challenge Roberts’s colorblindness. In a case decided in April, she gained a new ally in Justice Sonia Sotomayor for an uncompromising defense of affirmative action.

Instead of “winks, nods, and disguises,” Ginsburg has called for race-conscious policy to offset the still-enduring effects of slavery and the subsequent unconstitutional exploitation of its descendants under Jim Crow.“Only an ostrich could regard the supposedly neutral alternatives as race unconscious,” Ginsburg has said, and only a contorted legal mind “could conclude that an admissions plan designed to produce racial diversity is not race conscious.” Sotomayor recently added (mocking Roberts’s aphorism) that “the way to stop discrimination on the basis of race is to speak openly and candidly on the subject of race, and to apply the Constitution with eyes open to the unfortunate effects of centuries of racial discrimination.”

Of the books by African-American law professors here under review, Randall Kennedy’s For Discrimination: Race, Affirmative Action, and the Law explains why race-conscious college admissions policies are a reasonable and modest remedy for these unfortunate effects. Sheryll Cashin’s Place, Not Race is a well-argued plea for ostrich-like plans.

In contrast to this plea, Cashin’s previous book, The Failures of Integration, was an impassioned call for housing policy that would finally incorporate black families into American society. It was anything but colorblind. “Indirect approaches are no substitute for a frontal attack on what is ailing us as a nation,” she wrote, concluding that “the rest of society should stop fearing us [blacks] and ordering themselves in a way that is designed to avoid us where we exist in numbers. America created slavery, Jim Crow, and the black ghetto. America has shaped stereotypes grounded in fear of black people. … America has to get beyond fear of black people and fear of difference to begin to order itself in a way that is consistent with its ideals.”

Now, however, writing about affirmative action in college admissions—an issue considerably less contentious than desegregation of the suburbs—Cashin has become convinced that race-conscious policy isn’t such a good idea after all. It incites resistance to black progress that she believes might not otherwise exist. Failing to speak openly and candidly on the subject of race leads Cashin to pander to white hostility: “Social psychologists link much opposition to health care expansion to high levels of racial resentment. Again, I am not saying that opponents are racist.” What else could she be saying? Convinced that race-based affirmative action is politically dead, Cashin seeks an alternative more palatable to white opponents. She concludes that race-based affirmative action gives unfair advantage to middle-class African Americans who don’t need it, while low-income youth of all races do.

Cashin certainly has cause for concern, as elite colleges fulfill goals for black enrollment with children of well-educated African and Afro-Caribbean immigrants rather than descendants of American slaves—too many Barack Obamas and not enough Michelles. Cashin illustrates with her own family—though with origins in American slavery, it is a well-established member of a multi-generational black elite—and concludes with a letter to her six-year-old twin sons, students at a Mandarin immersion school. She tells them that her proposal will deny them undeserved privileges they can manage without: “I would trade the benefit to you of affirmative action for a country that does not fear and demonize people who look like you,” she writes, as though such a deal were on offer.

Cashin, an “integration pioneer” from childhood—she attended predominantly white schools—is now a Georgetown University professor, having graduated summa cum laude in electrical engineering from Vanderbilt, studied law at Oxford, and clerked for Thurgood Marshall at the Supreme Court. Her husband, like her, is a “professional parent of color.” Her sons’ paternal great-grandparents built a profitable corporation (it continues to this day with family leadership) and had five children, of whom four became doctors and the fifth a lawyer. On Cashin’s side, the boys’ great-grandparents went to Fisk University, as did their grandfather, who went on to medical school; their great-grandmother was a high-school principal.

It’s fair to say that giving Cashin’s sons admission advantages to elite colleges would be unjust. They don’t need it. Cashin is also right to point to a gulf between their inherited advantages and the handicaps suffered by the lowest-income African Americans living in high-poverty neighborhoods where the “undertow” of gangs, violence, profiling police, racially skewed criminal justice, parents with little literacy, and widespread unemployment stack the odds against youth who may try to escape.

Cashin wants to extend university preferences to such youth and to those of all races and ethnicities in similar circumstances. Her ground here is shakier. While other groups experience hardship and discrimination, few nonblack young people suffer handicaps of similar intensity—as her previous book made clear. What’s more, Cashin’s understanding of the country’s, and African Americans’, social-class distribution is without nuance; she focuses only on the poor and the affluent, insisting that African Americans in the latter group can compete without special favors. Yet her college admissions recommendations mostly overlook a substantial, nonaffluent African-American middle class, sitting between the very poor and the rich. These are children not of inherited wealth and status but of ordinary lawyers, engineers, administrative workers, civil servants, paraprofessionals, police, firemen, bus drivers, or blue-collar workers—children of men like Michelle Obama’s father, who worked in Chicago’s water plant, or Randall Kennedy’s father, a postal clerk who completed only two years of college. This working and middle class of African Americans both needs and deserves affirmative action to level the playing field after centuries of discrimination.

Read the full article. 

Broad-based wage growth—if we can figure out how to achieve it—would dwarf the impact of nearly every other economic trend or policy in reducing poverty. Even in 2010, the bottom fifth of working age American households relied on wages for the majority (56%) of their income. When you add in all work-based income including wage-based tax credits, nearly 70% of income for low-income Americans is work-related. Yes, the targeted efforts to strengthen the safety net are well deserved. Programs such as food stamps (SNAP), unemployment insurance, and Social Security have helped reduce poverty over the last four decades.  But market based poverty (or poverty measured using only income from wages) has been on the rise and the safety net has to work even harder to counterbalance the growing inequalities of the labor market.

There was once a strong statistical link between economic growth and poverty reduction, but rising inequality has severed it, and the results are deeply dispiriting. If the statistical link between economic growth and falling poverty that held before the mid-1970s had not been broken by rising inequality, then poverty, as the government measures it, would be virtually eradicated today. Furthermore, the impact of rising inequality is nearly five times more important in explaining poverty trends than family structure.

As the Economic Policy Institute has documented in our paper launching the Raise America’s Pay project, this rise in inequality is simply the flip side of nearly stagnant hourly wage growth for the vast majority of the American workforce in the three decades before the Great Recession. So how to reverse this wage-stagnation, especially for low-wage workers? Below is a list of proposals, all linked in their attempt to rebuild institutions that provide bargaining power to workers who have had it taken from them in recent decades.

The minimum wage is currently more than 25% below its real value in the late 1960s. The Congressional Budget Office (CBO) reports that the Harkin-Miller bill to raise the minimum wage to $10.10 would cumulatively boost incomes of people below the federal poverty line by $5 billion. And this is probably too conservative; other academic research finds that the same bill would lift more than 4 million people out of poverty. Among those who would see a raise from the Harkin-Miller bill, 55% are women and 25% are women of color. Nearly one-in-five kids would see at least one parent get a raise.

Another key policy priority should be efforts to level the playing field for workers to organize and form unions. The decline in unionization over the last several decades has led to increases in wage inequality and a loss of bargaining power for workers. And this bargaining power loss is not confined to union members themselves—unions often set wage-standards for entire sectors. Importantly, the decline in unionization is not a natural, inevitable phenomenon or a result of workers no longer wanting unions. It is the result of a policy decision to allow growing employer aggressiveness to tilt the playing field against organizing drives.

This policy choice is clear when one looks at the evidence. First, unionization has held up much better in the public sector where employers have less ability to fight organizing drives. Second, in 2007, the share of non-union workers who said they wanted to be represented by a union or similar organization reached an all-time high at over 50%.   There is a growing wedge between the desire to organize and bargain collectively and workers’ ability to do so. And, third, even the most obvious form of employer aggressiveness—the firing of workers who are trying to organize—hasrisen sharply in recent decades, according to the National Labor Relations Board.

The fact is that the decline of unions can explain approximately one-third of the growth of wage inequality among men and approximately one-fifth among women since the 1970s. This rising wage inequality is the key driver behind stagnant wages for workers at the bottom. When low-wage workers have been able to organize, unionization is  associated with higher wages and benefits for many, including: food preparation workers, cashiers, cafeteria workers, child-care workers, cooks, housekeepers, and home-care aides.

Reducing wage theft is also particularly important to low-wage workers. Wage theft occurs when employers withhold wages that are owed to a worker, for example by requiring workers to work off the clock or refusing to pay overtime. There is widespread evidence of these practices and more—from tipped workers not being paid their wages to Apple store employees being forced to stand in line after their shift while their bags are checked for merchandise. In nearly 9,000 investigations of the restaurant industry, the wage and hour division of the Department of Laborfound that 83.8% of the shops investigated had wage and hour violations —underscoring the enforcement problems.

Millions of low- and moderate-wage workers have also seen slow wage growth because they are working overtime and not getting paid for it. This is because the real value of the salary threshold under which all salaried workers, regardless of their work duties, are covered by overtime provisions has been allowed to erode dramatically. Simply adjusting the threshold for inflation since 1975 would raise it to $984 per week (or $51,000 on an annual basis), from its current level of $455 ($24,000 annually). This simple adjustment would guarantee millions of additional workers time-and-a-half pay when they work more than 40 hours in a week.

Other labor market policies and practices, which, if changed, would increase the wages of low- and moderate-wage workers, include: the misclassification of employees, such as construction workers who are deemed independent contractors so that the employer doesn’t have to pay for workers’ compensation. Just-in-time scheduling occurs when employers schedule workers erratically and sporadically, and denies workers any regularity in their schedule or pay. Think about how difficult that is for working parents who need to support their families and also find child care, or for workers who need a second job to make ends meet. Finally, paid sick time, paid family medical leave, and flexible work hours, all would support workers and their families.

The social safety net remains crucial for low-income working families in this country and also needs reforms. Everything from shoring up SNAP to extending EITC to childless adults to expanding Medicaid to people in those states which refuse federal dollars. We also should have universal pre-K and affordable and high quality child care—we need to use every tool in our toolbox to give kids a chance of success, reducing inequality at the starting gate of kindergarten.

But, if we really care about children in our country, then we also need to raise the wages of parents working hard every day to lift their families out of poverty.  We need to enforce the labor standards we have, update the ones that need it, and put power back in the hands of workers to bargain for better working conditions for themselves and their families.

Thomas Piketty just tossed an intellectual hand grenade into the debate over the world’s struggling economy. Before the English translation of the French economist’s new book, Capital in the Twenty-first Century, hit bookstores, it was applauded, attacked and declared a must-read by pundits, left, right and center. For good reason: it challenges the fundamental assumption of American and European politics that economic growth will continue to deflect popular anger over the unequal distribution of income and wealth.

“Abundance”, observed the late sociologist Daniel Bell was “the American surrogate for socialism.” As the economic pie expands, everyone’s slice grew bigger.

The three-decade long boom that followed World War II seemed to prove Bell’s point, tossing Karl Marx’s forecast of capitalism’s collapse into the dustbin of history.

Marx predicted that as markets expand, profits from technological innovation would gradually dry up, depressions would get more severe and capitalists would drive labor’s share of income in the advanced industrial economies so low that revolution was inevitable.

But twentieth-century capitalism proved more resilient than Marx thought. New technologies continued to generate more profits and jobs. Keynesian fiscal and monetary policies prevented cyclical business downturns from triggering depressions. And the investor class, threatened by the specter of communism, agreed, grudgingly, to the New Deal model of strong unions, social insurance and other policies that forced them to share the profits from rising productivity with their workers.

In the United States, the portion of income going to the richest dropped from over 45 percent in the 1920s to under 35 percent by the 1970s. Between 1959 and 1973 the percentage of Americans living in poverty was cut in half. Other industrial countries followed the same pattern.

Ultimately, it was the communist system that collapsed, unable to match capitalism’s performance in providing the proletariat with a house, a car and the other totems of a middle-class life.

The idea that capitalism naturally led to greater equality was codified in a 1955 landmark study by the American economist Simon Kuznets, whose data showed that after an initial period of rising inequality (e.g., our nineteenth-century gilded age) the wealth generated by market economies is distributed between labor and capital more evenly. When workers’ productivity rose, so do their wages. The “Kuznets Curve” quickly became conventional wisdom for both mainstream economists and the politicians they advised. As the nautical John F. Kennedy put it: “A rising tide lifts all boats.”

The central question for Western economists then became how to keep the tide of growth rising. Liberals favored more active government interventions, conservatives more incentives for private investors. Income and wealth distribution—the issue that had preoccupied economists since Adam Smith—was narrowed to studies of the characteristics of the poor (their race, their gender, their sex life, etc.) that prevented them from rising with the tide. Almost no one studied the rich.

Then, in the late 1970s, the trend toward equality reversed. Workers’ output-per-hour continued to rise, but their wages and benefits flattened. Almost all of the gains from the increased productivity of the last three and a half decades went to corporate investors and their top managers. The poverty rate rose by a third. And the pain spread steadily up the socioeconomic ladder.

Mainstream economists have been disgracefully slow in responding to this historic shift in who gets what. When Larry Mishel and his colleagues at the Economic Policy Institute began reporting on the growing gap between workers’ productivity and their pay in the mid-1980s, the first reaction of the economist establishment was denial. When they could no longer ignore the data, economists blamed the workers themselves for not being educated enough for the new information age.

Mainstream politicians were soon lecturing downscaled Americans that they should go to—or back to—college. So they did, in record numbers. Increased education is critical for growing the economic pie, but the evidence—including a dozen years of falling real wages among new college graduates—shows that lack of schooling is not the reason why the slices of the super-rich rich are growing so much faster that everyone else’s.

No matter that the facts don’t fit. It is easier for economists and politician to tell a story about dumb workers and smart bosses than to address the more obvious causes of the upward redistribution of wealth. Talk of offshoring jobs, suppression of unions, shredding of social safety nets and tax breaks for the rich makes the corporate contributors to academic careers and political campaigns too nervous.

To be sure, Democrats have ramped up the rhetoric. Bill Clinton ran for president in 1992  complaining that Americans were “working harder for less.” Over two decades later, they still are. Five years into his presidency, Barack Obama now tells us that inequality is the “defining issue of our time.” But even if Congress passed his modest agenda of an increase in the minimum wages, tax credits for the poor and a marginal boost in funds for education and training, it would just slow down the ongoing upward redistribution of wealth. Other Obama proposals, such as more free trade and continued fiscal austerity, will accelerate it.

Underneath the rhetoric, the actual message from our governing class is: have patience. The economic tide—bringing with it good jobs at good wages—will soon rise again. It always has.

But as the US economy crawls into the sixth year of recession and the fourth decade of stagnant real wages, the signals ahead tell us that this time it probably won’t.

The Obama administration’s “optimistic” ten-year forecast (for obvious reasons, administration forecasts always lean toward optimism) is for enough growth to drop the unemployment rate to 5.4 percent by 2018 and have it remain there until 2024. Given that joblessness averaged 4.6 percent in the three years before the 2008 crash while wages stagnated, the president’s own economists are implicitly predicting that the gap between workers’ production and workers paychecks will widen further.

Others are even less sanguine. Progressive economists like Paul Krugman and Joe Stiglitz—and now even the less-than-progressive Larry Summers—think that the US and European economies are trapped by chronic weak consumer demand. Their remedy is more government spending on education and infrastructure to put more money in customers’ pockets. But the reactionary fiscal austerity that dominates Washington and Brussels—even among the left-center parties—makes such aggressive Keynesianism a political non-starter for the foreseeable future.

Over the longer term, the prospects can be downright grim. The venerable Robert Gordon, an economist known for careful analysis, thinks that the innovation that has driven growth for over a century might well slow from its average of 2 percent per year since 1891 to 0.2 percent for the foreseeable future. Add tightening environmental costs and constraints and the good shipAbundance sinks to the sea floor.

The pessimists of course could be wrong. It’s certainly possible, if not plausible, that some unpredicted burst of entrepreneurial energy or a simultaneous reconversion to Keynesianism could propel growth faster than even Obama’s optimistic economists forecast. Couldn’t that be enough to float us back to Kuznets’s curve of rising equality?

Enter Thomas Piketty, whose impressively researched analysis (600 pages plus a detailed 165-page online technical appendix) concludes that Simon Kuznets was wrong. Not only does capitalist growth not reduce inequality; it increases it.

Using data and computer power unavailable to Kuznets, Piketty pored through 200–300 years of the economic history of the largest capitalist economies—principally the United States, Britain, France, Canada, Germany, Sweden and Japan. The numbers show that that since roughly 1700, with one exceptional period, the returns to capital (profits and interest) have exceeded the rate of overall economic growth. Since the rich own most of the re-investable capital, their wealth accumulates faster than the wealth of the vast majority of people whose income depends on wages and salaries.

The exceptions to the historical trend were the years 1914–75 in Europe and 1929–75 in the United States, in which inequality shrunk in almost all western nations. According to Piketty this era was unique: the consequences of two world wars, the Great Depression and the social democratic character of the postwar recovery in Europe, Japan and North America. Once those forces were spent, capitalism returned to its normal function as a machine for producing “inequalities that radically undermine the meritocratic values on which democratic societies are based.”

Moreover—and this is a key point—contrary to what we’re taught in Economics 101, markets appear to have no self-correcting mechanism that can halt the worsening misdistribution of wealth. If allowed to go unchecked, a tiny number of capitalists will own just about everything, with social consequences that Piketty sees as “potentially terrifying.”

We have already returned to the levels of income inequality of the 1920s, and the concentration of wealth is heading toward the ratios of the 1890s. The social relations of the future, writes Piketty could resemble Jane Austen’s world, in which a tiny group of the wealthy employed vast armies of poorly paid servants.

The super-rich of the twenty-first century are somewhat different than they were in Marx’s time, especially in the United States. Most still are the heirs of fortunes made in the distant past. But those in the top tier of today’s “patrimonial capitalism” also include more recently arrived corporate CEOs and others who can set their own exorbitant salaries and leave their children both financial wealth and privileged access to education and elite networks. To the economist Piketty, the waste of resources going to the systematic enrichment of people who do not have to work for a living is particularly galling.

Piketty is certainly not the first economist to criticize inherited wealth. And the idea that capitalism is unfair will not shock most people who work for a living. But Piketty’s credentials and exhaustive attention to statistical detail make him harder for the pundits and policy elites that protect the plutocracy to dismiss.

In addition to exposing the weakness in a core principle of the economist canon, Piketty’s data-driven methodology skewers the class bias masquerading as science that pervades the study of economics and the formulation of economic policy.

Economics claims superiority over other social sciences on the basis of its greater capacity to quantify reality, i.e., crunch numbers. Yet for decades now the numbers have been in conflict with hallowed tenets of the capitalist catechism. For example, the forty-year gap between wages and productivity refutes the theory that workers get paid according to their efficiency. Twenty-five years of relentless job losses and wage decline because of globalization mocks the rigid faith in free trade. We haven’t had a peacetime price spiral driven by US government deficits in modern times, yet the conventional wisdom has us cutting food stamps to placate inflation paranoia.

Similarly, the orthodox creed holds that Piketty’s central point cannot possibly be true. The rate of return to capital cannot be higher than the rate of economic growth for long because when the supply of capital increases, its price—the rate of return—has to fall. Piketty’s response: look at the facts, which show that in the real world this adjustment can take so long (a century or more) and cause so much damage that the theory is irrelevant.

Piketty is not a Marxist. He sees no real alternative to global capitalism and has little interest in changing its inner workings through worker ownership, nationalization or the redevelopment or local or national markets. Like Keynes, his goal is to make markets a more efficient instruments for human progress. But although he supports the standard progressive agenda of financial regulation, public investment in education and infrastructure and aid to the poor, he thinks that in a globalized economy, capital is now beyond the control of any one country—even the United States. Efforts by individual nations to constrain capital will just chase away highly mobile private investment.

The ultimate solution, he writes, is a worldwide progressive tax on private capital. Piketty understands that this is now utopian. But he argues that the tax is technically feasible and could be gradually adopted region-by-region.

Here Piketty seems out of his political depth. In order to avoid Marx’s apocalyptic conclusion, he skips around a central implication of his own analysis: that the upward redistribution of wealth also generates an upward distribution of political power that perpetuates inequality. An enforceable global tax on capital ownership would require dramatic political shifts to the left within the major economies—at least the United States, Europe, China, Japan—and unprecedented cooperation among these economic rivals to face down transnational capital and force the rest of the world to accept it. Eyes will roll.

Still, Piketty’s proposal sets a realistic marker for the level and scope of radical change necessary to deal with the grim conclusion of his quite credible economic analysis. The analysis makes hash of the conservative claim that there are “market solutions” to inequality, as well as the liberal hope that small-bore reforms will eventually achieve social justice on the cheap.

It also challenges the lack of urgency that infects social democratic parties in the capitalist world whose answer to inequality has been to wait for the crisis to pass and tide to come back and float all our boats.

But if Piketty is right, time is not on their side. His study confirms what David Ricardo, Karl Marx and other nineteenth-century economists perceived earlier about the machinery of capitalism: it is not only unfair, it is relentlessly and dynamically unfair. Until we make radical changes either the way it works or who it benefits, the maldistribution of wealth and political power can only get worse.