Wage stagnation, low-paying jobs and bleak prospects for the future. These are some of the economic issues affecting the vast majority of income earners in America — including most white workers — as a result of racism.

Editor’s note: This is the second of a two-part post on systemic racism’s economic impact on America.

As race becomes more of an issue for both American political parties, economics becomes much less of a problem. What proceeds this racial, political division is always more pain for white Americans. In the second part of this post on the economics of racism, we’ll look at the white pain that is being inflicted today based on the shift from economics-based politics to race-based politics.

Exhibit one is wage stagnation, and it has already been discussed thoroughly. If workers continue to vote and negotiate with capital based on racial identity instead of economics, wages will continue to stay decoupled from productivity for most Americans.

Exhibit two, as noted by Andy Olin of the Kinder Institute: “More than 53 million people — 44% of all workers between the ages of 18 and 64 — are in low-wage jobs earning median hourly wages of $10.22 and median annual incomes of $17,950, according to a recent report from the Brookings Institution.” More than 50% of these workers are non-Hispanic white American citizens.

The third exhibit would be the continued tragedy in the United States of working-class white men dying from deaths of despair. Deaths of despair mainly attributed to life expectancy in the wealthiest country in the world falling in the years 2015, 2016, 2017 and 2018, only to slightly rise by 0.08% in 2019. These deaths of despair were first brought to national attention by Princeton University economists Anne Case and Angus Deaton.

The diseases of despair are behavior-related medical conditions that increase in groups of people who experience despair due to the sense that their long-term social and economic outlook is bleak. The three diseases associated with deaths of despair are drug overdose (including alcohol overdose), suicide and alcoholic liver disease. About 100,000 white people die each year from deaths of despair. The only way to see the direct line from racism to economics is by looking at what all people agree on politically versus what they are receiving from politicians.

Is the government listening?

To begin, politicians tend to vote against the will of their constituents at least 35% of the time. One key example was in 2017, when both the House of Representatives and the Senate passed a bill that repealed Obama-era regulations that would have prevented internet providers from storing and selling their customers’ browsing history without their consent. The bill was then signed into law by President Trump. Nearly three-fourths of Republicans and Democrats wanted the president to veto it. To be fair, when most constituents want something, politicians give it to them about 65% of the time. However, when they decide to go rogue, the consequences tend to be devastating to white workers.

What can explain this troubling behavior? Recent research shows that the opinion of the bottom 90% of income earners in America has virtually no impact at all. That means that the views of the vast majority of white people do not matter to their elected officials. The elected officials tend either to do what they want, based on their ideology, or what their donors tell them to do.

Further research suggests that those in the median income, regardless of race, tend to work quite well as a measure of the average citizen’s political preferences. The researchers concluded that “in all cases in which the relationship between income and preferences is monotonic, and in all cases in which there is no systematic relationship at all between the two, the preferences of the median-income respondent are identical to those of the median-preference respondent.”

Despite this, when observing 20 years of data and 1,779 policy issues, researchers found that the average citizen had little effect on public policy adoption. Most of the power to change policy rested in the power of the economic elite and special interest groups. The same research, however, states that unions represent the will of the people extremely well.

But what was it again that was used so effectively by special interest groups and the economic elites to weaken and destroy unions in the United States? As I stated before in part one of this post, it was, you guessed it, racism!

Linking racism and economic impacts on white workers is not novel

The connection between racism and the economic costs to whites is not just some new idea or a wild conjecture. Professor Michael Reich, labor economist and director of the Institute for Research on Labor and Employment (IRLE) at the University of California at Berkeley, laid down both the statistical and theoretical framework for the high cost of racism to white people way back in 1974. His work was later updated and republished in 1981, and has been replicated and stress-tested repeatedly since then.

Reich’s model demonstrated the following discoveries:

“All the equations showed strikingly uniform statistical results: racism as we have measured it was a significantly disequalizing force on the white income distribution, even when other factors were held constant. A 1 percent increase in the ratio of black to white median incomes (that is, a 1 percent decrease in racism) was associated with a .2 percent decrease in white inequality, as measured by the Gini coefficient.”

Reich’s later research revealed a reliable statistical estimate of the effect of two race-related variables on the rate of profit for employers. It showed:

“BW = the ratio of Black to white median family income in a given industry. %NW = the percent of non-white workers in an industry. We then have the following equation for the rate of profit in various industries: Rate of Profit = 20.5% - 14% x BW - 21.7% x %NW. This equation implies that more racial inequality is associated with higher profits, and also that a lower percentage of non-white workers in an industry is associated with higher profits.”

What will it take to achieve real change?

I am a firm believer in these words of Jesus: “Do unto others as you would have them do unto you.”

Words spoken in earnest by Christ during the Sermon on the Mount. However, I also believe that most people, like Thomas in the Gospel of John, will doubt anything that does not happen directly to them.

“Now Thomas called Didymus, one of the Twelve, was not with the disciples when Jesus came. So, the other disciples told him, ‘We have seen the Lord!’ But he replied, ‘Unless I see the nail marks in His hands, and put my finger where the nails have been, and put my hand into His side, I will never believe.’”

White people, what will it take for you to understand that racism hurts you? What will it take for you to realize that you are the victims of centuries of self-deceit? Will you be wise and soften your heart to the truth as the Bible prescribes? Or will you remain steadfast in your self-delusion until the end, when you appear before your maker as Thomas did?

I will leave you with the story of John Newton, the English clergyman and abolitionist. Newton was an active slave trader and investor in slave trading for most of his adult life. He continued to deal in slaves even after he was shipwrecked and turned into a slave himself in West Africa.

Newton didn’t become an abolitionist until 34 years after he retired from the slave trade. Before he died, he apologized to humanity and penned, “a confession, which … comes too late ... It will always be a subject of humiliating reflection to me, that I was once an active instrument in a business at which my heart now shudders.”

It took Newton time, but he did eventually do the right thing. However, if a man can become a slave himself and personally experience the horrors of slave trading, yet continue in the slave trade for decades after, I have little faith that this essay will end racism in the United States.

However, whether you believe me or not, everyday racism continues to exist, and like the economist Milton Friedman said, it costs you. White people, racism costs you. Whether economically in this life, or spiritually in the next.


Wilfred D. Brown is the author of “Breaking the Chains: The Road to Mental Emancipation,” which focuses on race relations in the U.S.