Tuesday, July 26, 2011

The Wealth Gap Isn’t About Race…

A recent census report highlights the income disparity between Black, Hispanics, and Whites. It focuses on everything but the problem. The disparity is not a function of race but rather of education and personal responsibility. It is easy to suggest that race is a factor but income is an outcome of productivity and has nothing to do with a person’s skin color. It has everything to do with what their value is to the market place.

Why do some people have more income and wealth than others? It is simply the product of years of investment in education and job skills. By investing in education and improving job skills through experience individuals create personal wealth. Of course you must invest and save the income you produce to accumulate greater wealth rather than spending every penny made on wants and desires, but I contend it is behavioral and has little to do with race.

Does that mean the Black community or Hispanic community have failed to produce greater wealth? Yes, but not because they are Black or Hispanic. There are many White people that have failed to produce wealth for themselves as well. What is the cause? Is it simply the color of their skin? Of course not. Skin color is irrelevant to success.

When you dig into the statistics, education is a key indicator of success. Of people that are educated (regardless of skin color) wealth over a lifetime is much more likely. What is the graduation rate of each race? The graduation rate is horrific for inner city minorities and therefore makes them less likely to succeed. If you can’t read, you have a harder time creating wealth.

Personal responsibility is a value instilled in families that creates a foundation for creating wealth. Personal responsibility ranges from strong family values, two parent households, and a strong commitment to self reliance. Government programs have undermined every aspect of personal responsibility. Therefore, any disproportionate number of people from any race on government programs is likely to be a key indicator of failure. The more reliant a person is on government programs the less likely they are to be successful.

So just because you are Black, White, or Hispanic doesn’t matter. Race is a red herring. Anyone in America that educates themselves and avoids a reliance on government programs, believes in the values of personal responsibility is more likely to create wealth. The scary thing about this report is it will be followed by a chorus of people that will want to expand the government programs that are actually creating the problem. The entire effort to increase the wealth of minorities will be focused on increasing government programs, and that will just exasperate the problem instead of fixing it.

The cure to any problem is rarely a government program…

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