Stratification Economics Poverty Wealth Gap

Role of Intergroup Inequality

Darity's Stratification Economics challenges the widely-held assumption that "group-based deficits in personal responsibility and cultural practices are explanatory" with respect to intergroup economic disparity. He cites politicians and economists alike as subscribing to this belief. His response is that "the emergence of economic stratification economics constitutes a systematic and empirically grounded alternative to the conventional wisdom on intergroup disparity." His view is that while the popular opinion is driven largely by anecdotal evidence, that empirical evidence can be used to test concepts and theories relating the economic stratification, and the results of such study would be more useful in terms of setting public policy.

Darity outlines several key concepts that flow from his theory of stratification economics. First, that intergenerational transmission effects are important. Second, the privilege serves to convey material benefits to specific groups of people. Third, that discriminatory privilege is persistent, in particular because privileged groups tend to dominate politics and are unlikely to affect change that would affect their privilege. Fourth, that discrimination still exists even when an individual acquires sufficient capital. Fifth, that members of ascriptively marked social groups sometimes engage in dysfunctional or self-defeating behavior, but such behaviors are not a collective trait or characteristic of the group (Darity, 2005).

Darity then provides a pathway for somebody who wishes to take up the study of stratification economics to proceed with that endeavor. Key is to understand the origins of global inequality. Anti-discrimination legislation is typically associated with a reduction in discrimination, but it still persists; the law only reduces it. Workplace discrimination in particular matters, because it is one of the means by which people in privileged positions can retain those positions of privilege, preventing any sort of socio-economic mobility on the part of marked groups.

Discrimination in education is another means by which these privileges are maintained. He notes that better access to higher education does not imply less discrimination. While it is associated with higher earnings, the discriminatory deficit versus non-marked people of equal educational attainment is sometimes actually higher.

Darity also looked at consumer habits, which are sometimes viewed as an explanatory factor. He found that blacks saved at an equivalent rate to whites, despite having on average lower incomes, such that savings rates were not a factor in determining one's economic status. Indeed, Darity views this as a sign that intergenerational property transfer is one of the main differentiators. If savings rates are not, the ability to pass down large sums through the family are, and perpetuate the wealth divide, if not accelerate it. This difference between blacks and whites in the U.S., of course, goes back to slavery, when whites were able to own property, and blacks were property. The lack of wealth among American blacks perpetuates itself, because intergenerational wealth transfer is one of the greatest differentiators between the wealth of different racial groups in the U.S. In particular, Darity juxtaposes the black experience with that of other immigrant groups, pointing on that systematic discrimination is a differentiator, and the narrative of immigration and the U.S. as a land of opportunity was never really salient for black Americans.