Marla McDaniel is a research associate in the Labor, Human Services, and Population Center at the Urban Institute. Her research focuses on family resources, social policies, race, and their influence on child and adult health and well-being. She discusses findings from a new report written with Margery Austin Turner, “Racial Disparities and the New Federalism.”
Five Questions Archives
October 25, 2007
1. How has the landscape of opportunity changed for low-income families in the US?
It teeters between the mid-1990s and early 2000s—first rising, then falling. Initially, prospects expanded for low-income workers and individuals with limited education and job skills, and then around 2000 those opportunities started shrinking.
The second half of the 1990s brought robust economic prosperity for most Americans. The number of jobs grew substantially, unemployment rates were low, and wages rose. Many low-skilled workers who might otherwise have depended on welfare to get by found and kept jobs while poverty rates fell nationwide. Beginning in 2000, however, job growth stagnated and unemployment rates climbed, while real wages for low-skilled workers declined and poverty rates edged up again.
2. What drove these changes?
Many factors contributed, but in our new report, "Racial Disparities and the New Federalism," Marge Turner and I point to dramatic shifts in both social welfare policies and economic conditions after 2000. Temporary Assistance for Needy Families (TANF) replaced the Aid to Families with Dependent Children (AFDC) program and almost simultaneously other safety-net programs changed. Food stamps, child care subsidies, health insurance, and disability benefits all changed. TANF gives states substantially more discretion over cash assistance, and most states changed their basic approach to assisting low-income families by discouraging cash assistance and encouraging employment. Initially, macro-level economic conditions and labor markets were favorable and were able to support the new approach. Many low-skilled workers who might otherwise have needed welfare found and hung on to jobs during the mid-late 90s. But when the economic picture changed in 2000, many in this group lost their economic foothold.
3. Compared to non-Hispanic white families, how did low-income African American families fare during this period?
Our research looked at educational attainment, economic well-being, public assistance receipt, health, and child school and health outcomes. We got our data from the Urban Institute's National Survey of America's Families. What we found was that fairly consistently throughout 1997 to 2002 African Americans fared worse than white Americans on these six fronts—even when we narrowed our scope to adults whose incomes were at or below 200 percent of the federal poverty level. When we tried to figure out whether this disparity shrank or grew as macro economic conditions improved or stagnated, we found some evidence of decreased disparity. In some cases, conditions for African Americans improved; in others, worsening conditions for white Americans explained the change. Mostly, though, disparities persisted and did not change very much.
4. What explains such significant racial disparities?
Historically, African Americans have faced many uphill challenges that partly trace back to longstanding spatial segregation, social and economic exclusion, and isolation. All, in turn, can undermine employment and educational success especially in neighborhoods served by failing public schools. Some disparities in employment and income stem from underlying disparities in education and even health. Then there's the outright discrimination revealed in paired testing studies—equally qualified potential home buyers or job seekers get treated differently because of race or ethnicity. Clearly, disadvantages in one area, such as education, can undermine outcomes in others such as employment and earnings.
5. What does research tell us about the best way to level the playing field?
Unfortunately, there are no quick fixes. But our research suggests that racial disparities are not completely intractable. Changes in policy incentives and economic opportunities can help narrow some of the gaps between blacks and whites. More sustained progress across the six fronts I mentioned above will require concerted efforts over time—there just isn't any other way to reverse the legacy of past patterns of segregation and inequality, and, as I said, disparities in one domain contribute to disparities in others. For that reason, leveling the playing field will likely call for simultaneous and multi-pronged—almost holistic—approaches that straddle education, employment and earnings, housing, neighborhoods, and health.
Efforts to eliminate racial disparities likely will not have a lasting effect if they're aimed at one dimension at a time, or implemented for short periods of time. Two domains that may be linchpins to unraveling the most persistent disparities, provided efforts are dedicated and sustained, are education and wealth accumulation.
