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Growing Apart

A Political History of American Inequality

Colin Gordon, Author

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Gender, Race, Space, and Mobility

Inequality is usually expressed as a wealth or income gap-- between rich and poor, between the very poor and everyone else, or (more recently) between the very rich and everyone else. Demographic gaps, particularly by race and gender, are also important. They shape the distribution of inequality and, as consequences of deep historical patterns of discrimination, they contribute to inequality as well. 


The gender gap in earnings is rooted in longstanding and multifaceted patterns of discrimination. For much of the last century, pervasive doubts about the propriety of women’s place in the labor market sharply curtailed both occupational and educational opportunities. When women did work, they labored in segregated occupational and professional niches: domestic work, textiles and apparel, light manufacturing, and the lower-wage “nurturing” professions (nursing and teaching). 

On the assumption that women workers were in an unfortunate interlude between dependence on father and dependence on a husband, women’s earnings were calibrated as “pin money” rather “family wages.”21 And, for many of the same reasons, the institutions and policies that helped to build and sustain earnings for men (the minimum wage, the labor movement), were less accessible to, or less likely to cover, women.22

Although considerable progress has been made—in legal status, in patterns of labor force participation, and in the desegregation of occupations—gender inequality remains stark. The burdens and constraints of family life (caring for children, and elderly parents) are still borne largely by women. Especially in the absence of meaningful child care supports or paid family leave, this comes at a direct cost to earnings and careers. In 2011, the median annual income for women working full time was 23 percent less than that of their male counterparts. Women make up about half of the labor force—but much higher shares of minimum-wage, and low-wage workers.23  

By any measure, women’s wages [see FIG below, toggle between men and women] are persistently lower than those of men—despite higher educational attainment and achievement. This gap is narrowing, but it is narrowing slowly. Some of this is progress—women are better qualified (more education, more experience) and employment discrimination (glass ceilings, occupational bans) is less prevalent. But some of this reflects background trends in the wage structure, in which the gender gap is narrowed not by women’s gains, but by men’s losses.


The racial gap in earnings, incomes and wealth reflects the long shadow of slavery, and the persistence of racial discrimination in employment, politics, education, housing, credit, and criminal justice. Slavery, of course, ended with resolution of the Civil War—and the adoption of the 13th, 14th, and 15th amendments to the constitution which outlawed slavery, and extended the principle of equal protection and equal voting rights to African-Americans. But the meaning of those legal guarantees was almost immediately compromised by the unwillingness and inability of the federal government to enforce them, and by the willingness and ability of southern states to erect new institutions of economic and political discrimination in their place. The reign of “Jim Crow” (which was codified in state law and enforced by threat and violence) included a new system of debt peonage, “separate but equal” public goods, and harsh limits on political participation.24   

The growth of federal power—particularly through the Depression and World War II—posed a direct challenge to “Jim Crow.” But, across this era, major federal programs (including Social Security, labor law, the minimum wage, and the GI Bill) were cut to accommodate Southern interests--either by deferring program administration and eligibility rules to the individual states or by exempting those occupations (especially agriculture and domestic work) in which African-Americans were segregated.  It was not until the civil rights movement of the 1950s and the 1960s that the formal institutions of Jim Crow were finally dismantled, while the prospect of redress for decades of discrimination was almost immediately blunted by the economic and fiscal climate of the 1970s.25

This history has directly and fundamentally shaped patterns of inequality.  While educational and occupational gaps have narrowed over time, they have stopped well short of ensuring equal opportunities or equal outcomes. This is true of wages, where the median for black workers has inched up slightly since 1979, but lost ground against white wages (the median black wage was almost 83 percent of white wages in 1979, it is under 77 percent today) [see FIG above]. 

Sidebar: The Unfinished March

African-Americans also have a much more tenuous foothold in the labor market, their unemployment rate, across the last business cycle, running more than double that of whites. It is true of incomes, where the median for black families has grown alongside that of white families since the 1960s—but without closing the gap between them (black median income reached 60 percent of white median income at the end of the 1960s; that ratio has not budged since [see FIG below]).

And it is dramatically true of wealth, where the legacy of deep discrimination in housing continues to shape the accumulated assets, or net worth, of African-American families. [see FIG below] The median wealth of white households is about twenty times that of black households, a ratio that is actually higher now than it was a generation ago. Fully one quarter of African-American families have no net assets. And the housing crash hit African-American families hard, pushing homeownership rates back below 45 percent.26

The close ties between race and inequality have been tightened in recent decades by the dramatic and devastating rise in incarceration rates (click here for a nice graphical summary). The U.S. incarceration rate more than tripled from 1980 to 2008—and in a startlingly uneven fashion: African Americans are incarcerated at 7 times the rate of white Americans. In 2008, over a third of black men between the ages of 20 and 34 were incarcerated. More than two-thirds of African-American men without a high school education born between 1975 and 1979 had a prison record by 2008. By the end of the twentieth century, incarceration was a far more common outcome for African-American men than military service or a college degree. If the incarcerated are included in the raw count of the labor force, African-American men without a high school education were more likely to be imprisoned than employed.27 

The impact of incarceration on inequality is hidden (those in prison are left uncounted by conventional measures of unemployment or poverty) but profound. Higher rates of imprisonment reflect not higher rates of crime, but an increasingly intensive policing or urban neighborhoods and institutions (including schools) and increasingly draconian sentencing laws. This, in turn, has served to exaggerate disadvantages based on race, place, and education. Jail suspends employment and income prospects for the period of incarceration, and undermines over the long haul for those who are released. Family members and dependents left behind fall into deeper poverty—and are themselves more likely as a result to end up behind bars. Mass incarceration, now accompanied by a vast prison-industrial complex, undercuts the bargaining power of “free” labor. And the systematic disenfranchisement of felons further skews the political reflection of racial and economic inequality.28 


Inequality also a unique spatial dimension in the United States. Our cities are starkly more unequal than the national as a whole—a reflection of longstanding and continuing patterns of local segregation and sprawl. Indeed, nowhere is the story of American inequality staged more dramatically than in the contrast between central city poverty and relative suburban wealth. Here again, the history of housing and property discrimination casts a long shadow. Over the last century, American urban spaces were starkly segregated (by race and income) by a variety of means, including race-restrictive deed covenants, local and federal urban policies (such as zoning, mortgage insurance, and urban renewal), and the blunt discrimination practiced by private realtors and lenders.29   

Sidebar: Mapping The Unequal City

The racial logic of local segregation has diminished somewhat in recent years (although it persists in many settings30) but it has been succeeded by an equally stark segregation based on income. Indeed, residential segregation by income has grown over the last generation. This segregation is driven by an increase in the share of the population living in areas of concentrated poverty, and by an increase in the share of the population living in areas of concentrated wealth. In 1970 only 15 percent of families lived in neighborhoods that could be considered as either affluent (those where median incomes were greater than 150 percent of median income in their metropolitan areas) or poor (those where median incomes were less than 67 percent of metropolitan median income). By 2007, twice the share of families—over 30 percent--lived in such neighborhoods.31  

American cities map—in local time and space--the larger patterns of American inequality: the poor poorer, the rich richer, the middle increasingly hollowed out.32   In many settings, this inequality sprawls beyond the old central city-suburb divide. Many central cities are largely depopulated—a scale of abandonment and disinvestment readily apparent in any birds’ eye view. Poverty now spills into inner suburbs and, in the wake of the housing bubble, beyond.33   The wealthy are increasingly ensconced in gated communities in distant exurbs. Indeed, prior to the housing crash, new residential construction was pushing ahead most dramatically in the nation’s slowest growing and most distressed metropolitan areas—servicing not a demand for new housing but a demand for further spatial segregation by income.34  

All of this, of course, has the effect of segregating opportunity as well. Historically, concentrated poverty emerged where local residents had few job prospects or housing options. Inequality yielded segregation and then reinforced it, as poor neighborhoods were stripped of basic economic and social assets. Many of the urban poor live in old working class neighborhoods in which the work has disappeared.35    And, as the local tax base crumbles, so too does the likelihood that local public schools will offer a way up or a way out.36 


These dimensions of wage, income, and spatial inequality would be less of a concern if the economy afforded real mobility; if everyone was poor when they were twenty, for example, but rich by the time they reached thirty. But, in a startling reversal of both historical and international patterns, Americans are less mobile now than they used to be and less mobile than many of their peers. For most of the full sweep of American history—from the middle of the nineteenth century into the second half of the twentieth—differences in opportunity based on family circumstances fell. For the last generation, however, that progress has begun to unravel.37   

This is true of intergenerational mobility [see FIG below]. In the United States, a child whose family income falls into the poorest fifth, has about a 30 percent chance of achieving a middle income or better as an adult. A child born into the richest fifth has about an 80 percent chance of the same achievement. While most Americans have higher family incomes than their parents, there is “stickiness” at both ends of the income spectrum: those born at the bottom or at the top of the income spectrum are likely to stay there. In the 1970s, 36 percent of families stayed in the same income decile; in the 1980s, that figure was 37 percent; and in the 1990s, it was 40 percent. In other words, over time, a larger share of families were staying within their class through the duration of their lives.38 

In this respect, the United States has one of the weakest rates of is intergenerational mobility among rich, democratic nations. There is a stronger link between parental education and children's economic, educational, and socio-emotional outcomes in the United States, than in any of its peers. This relative immobility both reflects background inequality, and sustains it: the more unequal the income distribution, the more likely it is that poor kids will inherit the disadvantages (and rich kids inherit the advantages) of their parents.39      

Some of these loses reflect growing gaps in educational attainment. For most of our history, the growing infrastructure of public education (and then the decline of discrimination by race and gender) generated real and sustained opportunities for most Americans. Each generation graduated high school at higher rates than the last, and these gains paid off family incomes. But the last forty years have seen both further impoverishment of our struggling public schools and dramatic spikes in the costs of higher education.40   

As a result, the gap in average test scores between students from low-income and students from high-income families is growing. The share of poor kids completing college has barely budged in a generation (rising from 5 to 9 percent) while the share of rich kids has increased steadily (from 36 to 54 percent). As a result of the uneven quality of K-12 education and the skyrocketing costs of higher education, the US is now the only major economy in the world in which children are unlikely to exceed the educational attainment of their parents.41  

We also see this collapsing mobility in the labor market. In most European settings, the incomes of workers in the lower deciles rise more quickly over time than overall income growth. In the United States, just the opposite is true. Those who start in the lower deciles see little income growth over time (or actually suffers losses), while those at the highest deciles see rates of income growth sharply higher than either other Americans or their European peers.42   All of this reflects the deterioration in wages, job quality, and employment opportunity traced above: with deindustrialization and the parallel collapse of collective bargaining, we lost the jobs (decent wages, modest educational attainment) most likely reward hard-working families with better opportunities for their children.

Not only is mobility constrained, but—in the absence of a range of social supports and programs common in most other developed democracies—Americans also have far more volatile and insecure incomes. A child of modest means and background in the United States is less likely to surpass her or his parents, less likely to move up the labor market during their lifetime, and more likely to face dramatic blows to family income and family security. Alongside inequality, income insecurity and volatility has increased markedly over the last generation: Americans are less protected by wages and benefits and more exposed to the business cycle. Over a quarter of all families reported that their 2010 income was “unusually” low, nearly double the share (14.4 percent) of just three years earlier.43 

So, by any measure, we are a starkly unequal nation. What’s striking about these trends, at first glance, is their long and overlapping timelines. The share of income going to the very rich follows a century long parabola—from the stark inequality of the “Gilded Age,” falling through the shared prosperity of the middle decades of the 20th century, and rising again in recent decades. In the distribution of postwar growth, the parallel lines of the “great compression” begin to unravel in the 1970s: higher incomes continue to track upwards with gains in productivity, but median and lower incomes fall off. And the gains at the very top—measured in CEO compensation or the share claimed by the richest one percent—are even starker in recent years.

Things are clearly worse now, but they have been getting worse for quite some time. This inequality is exceptional judged against our own history: we are more unequal now than we have been in almost a century. And it is exceptional judged against our international peers: even in countries where the same trends are found, they are not nearly as pronounced as they are in the United States. Understanding the dimensions of that inequality, of course, is one thing; understanding its causes is yet another. What contributed to inequality, to growth in inequality over time, and to growing gap between US and peers?

NEXT: Usual Suspects

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