Dr. King and January 6, 2021

Dr. Martin Luther King Jr., August 16, 1967:

 The problem of racism, the problem of economic exploitation, and the problem of war are all tied together. These are the triple evils that are interrelated. [1]

As we work to “build back better” from the events of 2020, we will be well served to remember the observation Dr. King made more than a half-century ago: The evils of economic and racial exclusion are not independent of one another, nor of violence. To truly emerge better, systems of economic and racial exclusion must both be reversed, turning today’s self-reinforcing, vicious cycles of exclusion into virtuous cycles of inclusion. The risk of failing to do so became abundantly clear at the U.S. Capitol on January 6th of this year, more than a half-century after Dr. King’s warning.

Economic exclusion

When Dr. King was murdered in 1968, he was in Memphis to launch the Poor People’s Campaign in support of sanitation workers striking for better wages and working conditions. The focus was on economic, not civil rights. Why? Because racial and economic inequities are inextricably linked. One cannot be solved without addressing the other.

As depicted on the left side of the figure below, the self-reinforcing economic cycle of exclusion is driven by deep levels of economic, social, and political polarization, such as those that characterize the United States today. Polarization leads to radically diverging views of society’s problems, their root causes, and solutions. Problems fester, as institutions are unable to generate consensus to act and trust in all institutions declines. Polarization of all types increases and the cycle deepens, becoming move vicious with every turn.

Figure: Self-reinforcing and interconnected systems of economic and racial exclusion

In Deaths of Despair and the Future of Capitalism,[2] a study of white working-class Americans, Case and Deaton outline the contours of this cycle.  As they describe it, the accumulation of wealth and income by the richest and educated (i.e., economic and social polarization), supported by government policies and legislation over the past fifty years (i.e., ineffective solutions and institutions), has “slowly eaten away at the foundations of working-class life, high wages, and good jobs.” As one result, life expectancy actually fell in the United States for 3 years in a row, “a reversal not seen since 1918 or in any other wealthy nation in modern times.”

MIT’s Task Force on the Work of the Future recently described technology’s roles in this cycle.[3] “Technology has polarized the economy. White-collar workers – in medicine, marketing, design, research, and more – have become more productive and richer, while middle-tier workers have lost out. Meanwhile, there has been growth in lower-paying service-industry jobs where digitization has little impact.” As one result, “Since 1978, aggregate U.S. productivity has risen by 66 %, while compensation for production and non-supervisory workers has by only 10%.” Task Force authors go on to note that institutions and public policy, as solutions to this polarization, have not kept up. “We’ve had real institutional failure,” the MIT report says.

These, and other systems of economic exclusion impact all Americans, black and white.

Racial exclusion

Racial exclusion, as its own vicious system, has been a feature of our nation since before its inception. Evidence that systems of white supremacy still operate today, independent of economic exclusion, is abundant. To pick just two examples:

In a study of intergenerational mobility, Raj Chetty and his co-authors[4] found that upward mobility for children born into the same, bottom fifth of the income distribution is markedly higher among white children than among black children. For white children growing up in the bottom fifth of the income distribution, 10.6% make it into the top fifth of household incomes. For black children starting out in the same bottom fifth of the income distribution, only 2.5% make it to the top.

At the same time, downward mobility is much greater among black Americans than among whites. White children whose parents are in the top fifth of the income distribution have a 41.1% chance of staying there as adults, but for black children only 18% remain in the same, top segment of the population when they grow up.

A recent Brookings study of retail redlining[5] found that for a given neighborhood income level (as measured by median household income) communities that are predominantly white have more than twice as many retail establishments as black neighborhoods of the same income level. Further, predatory retail establishments (e.g., liquor and tobacco stores, bars, payday lenders, and pawnshops) are disproportionately represented in predominantly black neighborhoods compared to white neighborhoods of the same income level.

The impacts of retail redlining are far-reaching. As the Brookings authors note, “Neighborhoods with retail are more valuable and more resilient, so inequality will persist as long as neighborhoods don’t have decent retail amenities.” Further, the authors note, “. . . the absence of local retail (and especially locally owned retail) forces residents of majority-black neighborhoods to shop elsewhere, robbing their local economies of the benefits of a strong small business ecosystem. Money spent locally puts dollars in the pockets of shopkeepers and store employees (as well as sales tax revenue in government coffers), who then make their own expenditures, kicking off another round of spending in a virtuous cycle.”

These, and myriad other systems of racial exclusion impact all Americans of color, regardless of economic status.

Why does this matter?

In urban areas like Chicago, systems of economic and racial exclusion overlap geographically, each reinforcing the other to create deep, gripping cycles. Their closely braided relationships can obscure the need to reverse both cycles. Failing to address both is unlikely to have the impact required to create a more inclusive economy. For example, in efforts to improve fairness in hiring, evidence abounds that racial bias works against black job applicants. DeCelles and co-authors found that companies are more than twice as likely to call minority applicants for interviews if candidates submit "whitened resumes than candidates who reveal their race.[6]

At the same time, if policymakers and employers only work to reduce racial exclusion in hiring, technology-driven polarization of the labor market, as described above, will continue to move both white and black workers to the fringes of the economy. In other words, focusing only on racial bias could result in better access for people of color to jobs that are of decreasing quality. At the same time, working only on job quality risks improving the overall quality of jobs that are inaccessible to people of color. 

2020 (and early 2021) not only laid bare but also deepened myriad challenges to creating a more inclusive, equitable society. The work of building a more perfect union is never complete, nor is it simple. Nor have the risks in failing to do so been as clear as demonstrated at the insurrection on January 6. As Boyle and Grossman put it,[7] reflecting on the events of that day,

Let’s get it right this time, by facing the inescapable fact that equity and inclusion can be attained only through a national reckoning with inequity and exclusion. Otherwise we will once again attempt national conciliation without addressing the roots of rupture. We will have learned nothing from our history or this day of national infamy.

To build back better, public, private, and non-profits leaders need to work to reverse two systems of exclusion, economic and racial. It’s time to get to work.

[1] Dr. Martin Luther King Jr., 11th Annual SCLC Convention, Atlanta, Georgia, August 16, 1967.

[2] Deaths of Despair and the Future of Capitalism, by Anne Case and Angus Deaton. Princeton University Press, 2020

[3] The Work of the Future: Building Better Jobs in an Age of Intelligent Machines, Final Report of the MIT Future of Work Task Force, David Autor, Co-Chair, David Mindell, Co-Chair, and Elisabeth Reynolds, Executive Director, 2020

[4] Raj Chetty, Nathaniel Hendren, Maggie R. Jones and Sonya R. Porter, Race and Economic Opportunity in the United States: An Intergenerational Perspective March 2018

[5] DW Rowlands and Tracy Hadden Loh, The Great Real Estate Reset Retail revolution: The new rules of retail call for small business empowerment Brookings Institution, December 16, 2020

[6] Whitened Resumes: Race and Self-Presentation in the Labor Market (pdf), by Katherine A. DeCelles, Sonia K. Kang, András Tilcsik, Sora Jun Administrative Science Quarterly September 2016

[7] Kevin Boyle and James Grossman, A STARTING POINT: Teaching the January 6 Insurrection, Perspectives Daily, Jan 11, 2021.