Toxic Inequality – A SavvyReview

Toxic Inequality: How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide & Threatens Our Future

Hardcover: 218 pages

Publisher: Basic Books (2017)

Author Thomas M. Shapiro is the Pokross Professor of Law and Social Policy at the Heller School, Brandeis University, where he directs the Institute on Assets and Social Policy.

While many will reflexively disagree with the main thrust of the book, Mr. Shapiro makes a coherent and convincing argument that we can’t understand wealth and income inequality in America without also acknowledging and understanding racial inequality. Moreover, any potential solution to the former must also address the nation’s widening racial divide.

Early on, in the Introduction, Mr. Shapiro informs the reader of the bottom line …

In short, the basic pillars of economic security – wealth and income – are today distributed vastly inequitably along racial and ethnic lines. African Americans’ historical disadvantage has become baked into the American economy. African Americans are effectively stymied from generating and retaining wealth of their own not simply by continuing racial discrimination but also by senseless policies that protect existing wealth – wealth that often originated at times of even more intense racial discrimination, if not specifically from racial plunder. Race and wealth have intertwined throughout our nation’s history. Too often missing in today’s dialogue about inequality is this binding race and wealth linkage. Failure to tackle the nexus of race and wealth will lead, at best, to only small ameliorations at the worst edges of inequality.

Interesting Observations

Of the many interesting observations made in the book is there is a deeply held, popular belief in America that any person can start with little, and through hard work and determination, become wealthy. However, significant research on economic mobility tells a very different story. The reality is that, no matter how it is measured, economic mobility is more limited than most assume. People tend to remain near the point they were born on the wealth distribution continuum.

Mr. Shapiro reveals that the structure of our neighborhoods, workplaces, and the tax code, more than individual choices, propel some forward and serve as insurmountable barriers for others. The lack of resources and assets, most often the case for families of color, often decimate parents’ plans for their families.

I recently listened – for the second time – to the audiobook version of Capital in the Twenty-First Century by Thomas Piketty. An economist, Mr. Piketty provides a detailed accounting of economic history and a numbers based explanation of what drives the accumulation and distribution of wealth; and the long-term evolution of inequality.

Focusing more on the impacts of social policy, Mr. Shapiro interviewed 187 families in 1998 and conducted follow-up interviews with 137 of the families during the 2010 – 2012 period. His interviews reveal the impact to individual families, and the widening racial divide, which are a result of the accumulation and distribution of wealth described by Mr. Piketty.

Listening to Capital in the Twenty-First Century and reading How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide & Threatens Our Future soon after provided considerable food for thought regarding inequality (income and wealth), its genesis, and its impacts.

Final Thoughts

Americans who are concerned about the toxic impacts of income and wealth inequality should absolutely read this book. Toxic Inequality: How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide & Threatens Our Future is available in Kindle and hardcover formats at Amazon.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

Leave a Reply

Your email address will not be published. Required fields are marked *