The average black household made 60 percent of what white households made in 2016 and less than half of what Asians made, according to census data. For every $100 of wealth accumulated by a white family, a black family has little more than $5 -- a gap just as wide as it was 50 years ago, according to federal statistics cited by the Yale researchers.
Yet both black and white Americans of all income levels remain profoundly unaware of the economic inequality between the two groups, said the study published in the Proceedings of the National Academy of Sciences. The misperceptions could negatively affect public policy as the country grows more diverse, researchers said, with politicians championing misguided legislation rooted in false impressions.
“This is evidence that our beliefs about racial progress and economic equality are fairly inconsistent with reality,” said Jennifer Richeson, a Yale psychology professor who co-wrote the study. “The magnitude of the misperception is shocking, and it’s an obstacle to actually achieving the progress that everyone seems to be celebrating.”
Their findings are problematic, the researchers said, because you can’t solve problems you don’t know you have.
Researchers asked black and white Americans at the top (making more than $100,000 a year) and the bottom ($40,000 or less) of the national income distribution to estimate differences between average black and white Americans in employer-provided benefits, hourly wages of college graduates and high school graduates, annual income, and accumulated wealth in the present and in the past.
Across four studies, participants overestimated progress toward black-white economic equality, with average estimates exceeding reality by about 25 percent.
“Everybody across our study sees progress, no matter their income and race,” said Michael Kraus, a social psychologist at the Yale School of Management who also co-wrote the study. “They think the gaps that have existed in the past are naturally closing.”
Most delusional are wealthy whites, the only group that was overly optimistic about racial economic equality even before the civil rights movement, according to the study.
Low-income whites were most on the mark when it came to estimating economic equality between races in the past. Black Americans, both poor and rich, were overly pessimistic about past economic equality.
Wealthy whites were also the most inaccurate in estimating racial economic equality in the present.
The researchers found both psychological and structural underpinnings to explain people's optimism.
Those who most believed in a just world and the American ideals of societal fairness and meritocracy were also most likely to overestimate racial economic equality. Higher-status individuals -- i.e. wealthy whites -- are especially motivated to perceive society as fair so they can justify their elevated status as merit-based rather than resulting from luck or discriminatory systems, researchers said.
“It’s easier to protect this narrative that I live in this meritocracy that is fair and that is consistent with our American ideals,” Kraus said.
Although it is now illegal for real estate agents, landlords and schools to discriminate based on race, neighborhoods and schools nationwide remain segregated.
It therefore is not surprising that Americans who don’t have much contact with other races and incomes have drawn false conclusions about other people's economic experiences, Kraus said. Wealthy blacks have more racially and economically diverse social networks compared to wealthy whites, who have little understanding of the economic outcomes of most black Americans.
“We need to stop deceiving ourselves,” Richeson said. “It could be a lack of information, but there’s also a role of willful blindness. Wealth inequality based on race is baked into this country’s founding, and we cannot handle it. It is not that these individuals don’t work hard enough or are genetically inferior.”
The researchers said their study highlights the limitations of economic policies such as graduated income tax and loan forgiveness for college students to address the gaping wealth and income disparities between racial groups.
Continued discrimination in housing and bank loans sabotages black Americans' ability to accumulate wealth. But there’s no real policy push to fix that, because most people don’t see the extent of the racial wealth gap to begin with, Kraus said.
The researchers found that asking white people to think about an “alternative United States” where discrimination based on race still exists in law enforcement, voting rights and education and employment decisions helped them to more accurately estimate racial economic inequality.
“So many of us grew up hearing this story about America that basically said there was slavery and then that was fixed. Martin Luther King marched and then that was fixed. And then we had Obama,” Richeson said. “That’s a nice, clean story that makes everyone feel good even though it’s shockingly inaccurate."