Political momentum on the left for such an effort must face the reality of legal obstacles, particularly from the Supreme Court.Proponents concerned about the wealth gap instead must come up with policies that have the effect of disproportionately building wealth for African-Americans, without singling them out.
“There are ways that you can craft legislation that essentially gets at this effect,” Ms. Baradaran said. “Look at how much legislation we have that gets at the opposite effect.”
Policies like the mortgage interest deduction, for example, disproportionately benefit white families, who are more likely to own homes. So do tax advantages for the rich, who are more likely to be white. Even federal investments in seemingly race-neutral infrastructure like the Interstate Highway System had this effect by enabling the development of all-white suburbs in an era of legal discrimination.
Wealth-building proposals today are trying to engineer a similar if opposite outcome. That makes the details thorny.
“The first and most efficient approach is targeting relief to the people who were targeted with discrimination,” said Dorothy Brown, a law professor at Emory University. “If we can’t get there, then we have to go to next best.”
Ms. Warren’s strategy, she said, is a clever workaround. Rather than specifying African-Americans, Ms. Warren’s bill would target specific neighborhoods where African-Americans harmed by the legacy of lending discrimination are likely to live.
Other researchers argue that a program based on neighborhoods redlined in the 1930s would be too narrow; most African-Americans who buy homes aren’t purchasing in such neighborhoods today (and in some cities, middle-income whites are).
But the kind of neighborhood criteria Ms. Warren has in mind could be one model. Ms. Brown proposes identifying neighborhoods with the least household wealth and allowing tax breaks associated with homeownership, like the mortgage deduction, only to people who live there.
Mr. Booker’s proposal would give $1,000 in a government savings fund to every newborn in America, for use later in adulthood. But the government would seed more money into that fund each year according to a family’s income, giving the most to children in the poorest families. That money could then be spent in adulthood on education, buying a home or starting a business.
“Ultimately, assets give people agency in their lives,” said Darrick Hamilton, director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University. His work on the baby bonds concept informed Mr. Booker’s proposal. “Assets give people the ability to make decisions,” he said, “to have choice and have freedom and self-determination.”
In the past, tests such as the SAT and ACT may have resulted in discrimination against particular groups. But this doesn’t imply testing should be abandoned. The real alternative to discrimination is to have the best, fairest tests possible. That’s why these days every standardized-test question is tested for bias. Questions are judged on several scales, including their “differential item functioning”: Subgroups of students—black males, white females, suburban kids, rural ones, Southern students, students living in poverty—are controlled for overall ability. Auditors compare the performance of these subgroups, and if any of them underperform on a particular question, it’s thrown out and never used. In addition, we don’t ask questions on certain topics. We know boys do better than girls on questions about sports, and rich kids do better than poor kids on questions about sailing, so we leave those subjects out.
the fact that a worker’s wealth and well-being is much more dependent upon her employer than the employer is on a given worker tilts things in the employer’s favor.
.. Two trends demonstrate the decline of labor and the ascent of business. Since 1979, after-tax corporate profits as a share of gross domestic product have grown by 22.8 percent, while the share of nonfarm business sector income going to labor has dropped by 10.3 percent.
The decline in worker bargaining power in the United States is the cumulative effect of numerous small and large changes over recent decades reaching into almost every area of law and policy. This combines with a decline in the enforcement of existing laws that could protect workers’ bargaining power — laws protecting unions, laws against wage theft, nondiscrimination laws, and more.
.. Among these changes is the requirement that employees sign what are known as “noncompete” and “no-raid” agreements, both of which restrict workers’ ability to extract pay hikes by threatening to take similar jobs at competing companies.
.. “less than half of workers who have non-competes also report possessing trade secrets.”
When entry-level workers at fast food restaurants are asked to sign two-year non-competes, it becomes less plausible that trade secrets are always the primary motivation for such agreements.
.. The treasury report estimated that 30 million American workers have signed noncompete agreements.
.. 94 percent of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.
The growing emphasis on “shareholder value” has provided additional justification for all of these anti-worker developments.
.. “the shareholder value movement starting in the late 1980s and now institutionalized through industry analysts” was crucially important in the devaluation of employees:
.. Accounting in business is mainly about costs. Finance people hate fixed costs because of the challenges they raise to share price valuation when there is uncertainty, and the biggest fixed costs are labor. Simply moving the same labor costs from employees to outside staffing companies moves it from one part of the accounting ledger to another and makes analysts happier.
This mentality, in turn, encourages “the use of temps and contractors” to fill high-wage jobs because “that way the employer doesn’t have to raise wages for all their employees.”
.. Companies could outsource work to areas with cheaper labor and less of a union presence. This both weakened the union and ramped up competitive pressure on the companies that were unionized. The result was fewer unions.
.. In 2017, 6.5 percent of the private sector work force was unionized, down from 35 percent in 1955.
.. The contemporary weakness of organized labor and the threatened status of employees has roots in the breakdown in the 1970s of the postwar capital-labor accord — what A.H. Raskin, the legendary labor reporter for The Times, called a “live-and-let-live relationship” that held sway for 30 years.
.. First, they would alter antitrust enforcement to require consideration of the likely effect of mergers on concentration in the labor market, in order to prevent “too high a risk of wage suppression.”
.. Second, Krueger and Posner would support legislation making noncompete agreements “uniformly unenforceable and banned if they govern a worker who earns less than the median wage in her state.”
.. ban no-poaching arrangements altogether:
We propose a per se rule against no-poaching agreements regardless of whether they are used outside or within franchises. In other words, no-poaching agreements would be considered illegal regardless of the circumstances of their use.
.. In the 2016 election, Trump profited from the conviction of rural and working-class voters that they were on a downward trajectory. If anything, Trump appears to be gambling that letting those voters’ lives continue to languish will work to his advantage in 2020.
.. His administration has turned the executive branch, the federal courts and the regulatory agencies into the sworn enemy of workers, organized and unorganized. Trump is indisputably indifferent to the plight of anyone in the bottom half of the income distribution:
- look at his appointments,
- look at his record in office,
- look back at his business career and
- look at the man himself.
The Gendered Effect of Social Class Signals in an Elite Labor MarketWe sent applications from fictitious students at selective but non-elite law schools to 316 law firm offices in 14 cities, randomly assigning signals of social class background and gender to otherwise identical résumés. Higher-class male applicants received significantly more callbacks than did higher-class women, lower-class women, and lower-class men. A survey experiment and interviews with lawyers at large firms suggest that, relative to lower-class applicants, higher-class candidates are seen as better fits with the elite culture and clientele of large law firms. But, although higher-class men receive a corresponding overall boost in evaluations, higher-class women do not, because they face a competing, negative stereotype that portrays them as less committed to full-time, intensive careers. This commitment penalty faced by higher-class women offsets class-based advantages these applicants may receive in evaluations. Consequently, signals of higher-class origin provide an advantage for men but not for women in this elite labor market.