It Didn't Add Up,..

From early on, our teachers, parents and peers present us with theories to explain the world around. Every day, an honest and alert individual will have experiences that either support a theory or force them to reconsider it, hence our understanding of the world constantly evolves.

During my pursuit of a Master's Degree in Education, we frequently discussed issues of economic inequality and racism. From professor to professor, the unifying explanation of economic inequality between different ethnic groups was racism; all other factors were considered extraneous. Basically, racism was the barrier that prevented African-Americans and other minorities from enjoying economic and social opportunities.

After several years of teaching, I transitioned to the residential rental market. Since my income was solely based on commission, I aggressively sought to find the best possible apartment for each client and secure their approval regardless of race or color. Each person was treated like an individual, but I could not help but observe some very strong and well defined patterns of economic behavior among my clients. As time went on, the theories of economic inequality that were presented to me in the master's program just didn't add up.

The majority of the time I was unable to secure the approval of my African-American clients. In no instance, did racism serve as a barrier that prevented them from achieving the desired economic and social opportunity (of renting the apartment of their choice). The problem was that the virtually every one of my African-American clients had awful credit. What was so troubling was that even the well paid, professional African-Americans had terrible credit. So, in most instances their credit ills did not stem from a lack of income, rather it reflected irresponsible spending patterns. Even their choice in apartments added credence to this interpretation; the individual with bad credit could have selected a nice, clean 2 bedroom apartment that was within their means ($1,000) that would have allowed them to pay down their debt and repair their credit, but they insisted on a luxury apartment, in the same area for $1,400, which was way beyond their means. In the end their credit scores, not their race, greatly limited their choice of apartments and neighborhoods.

The majority of my professional Hispanic clients had credit scores that exceed those of African-American applicants, but were still generally below average. With some notable exceptions my white clients had solid credit. And virtually every single Asian-American client I worked with had stunning credit. Even those of moderate incomes found a way to spend according to their means and in many cases they somehow save money.

What is so noteworthy is that these credit patterns parallel the rate of economic and social advancement among different ethnic groups. The credit scores are not a cause of their relative success, rather it is a symptom of behavioral patters that largely influence economic and social outcomes. Interestingly, the rate of poor credit in ethnic groups parallels the rate of out-of-wedlock births (72% for African-Americans, 40% for Latinos, 28% for whites & 15% for Asians) and university attendance of the said groups. This leads me to believe that the driving factors that determines social and economic outcome among individuals and different ethnic groups are their future-and-investment orientation.

The excellent credit scores, low out of wedlock birth rate and very high university attendance rates demonstrate that relative to other groups, Asians plan and invest in their future. Clearly this is a major factor in their rapid economic advancement of Asian-Americans.

At the other end of the spectrum, the terrible credit of African-Americans, high out of wedlock birth rate and low university attendance indicates a lack of planning and investing in the future. Without a doubt this is a major factor in the relative economic stagnation of African-Americans.

The point of this discourse is not to speak ill of economically marginalized groups, it's to go beyond one dimensional explanations that place racism as the universal cause of social ills. Only by honestly acknowledging the behavioral and cultural patterns that advance or retard economic develpment can we begin to address poverty and social pathology. To avoid difficult conclusions because we fear appearing "insensitive" or "racist" is intellectually dishonest and will ensure that we continue the same failed and costly policies.