Skin Color, Opportunity and Wealth

by JT McGee

I was recently reminded in the comments of a post by FinancialSamurai that maybe discrimination is as alive and well today as it was many years ago. While I couldn’t give a flying-you-know-what about your skin color, apparently there are many who still do.

race relations, opportunity, and the color of our skin

I should preface this by exploring briefly my background. I live in a part of the United States that is very much diverse, and very much average—suffice that to say why it has been a testing ground for many of the products you enjoy on a daily basis, think Pringles, or the very temporary McDonald’s Diner. Older folks tell me that McDonald’s actually tested pizza here back in the day. Yuck?

That said, my experience is probably different than average. I had the privilege of attending a private school for the first five or six years of my schooling. A parochial school, one of many in my particular city, it was probably 100% white. In many cases, parents who lived in the school district I did would much rather spend the thousand dollars per year to send their kids to a private school, since the alternative public school wasn’t much for academics. A girl I went to school with much later and I like to joke now that we “had to be the poorest ones in the school.” Even still, we were perfectly middle-class, which goes to show the wealth that dropped their kids off each day for a well-rounded education.

I can honestly say that for the first many years of my life, I hadn’t much spent any tangible amount of time with anyone who wasn’t white. However, it was during my second grade year that we moved to another city where I did attend public school, and the demographics were very much different at this school than they were in my old private school. Still a majority of students were white, as were the faculty, but for the first time in my life, I did actually go to school with people of other races.

I couldn’t tell you that it was even really that different being around people who were or weren’t white. I mean, seeing as I can’t remember it being a big deal now, I can’t remember it being a big deal then. The school sucked, to say the least, I could read better in second grade than the kids who were in the fifth and sixth grades. In many ways, going to a different school really messed me up…I was bored, there wasn’t nearly as much homework (even in the second grade, I was accustomed to having one, two, maybe three, I don’t remember, but a lot of homework each night at the private school.) This was, for me, a cakewalk.

Fast forward…oh, I don’t know, eleven years or so, and it was last semester that I was forcibly reminded that racism apparently still exists. Every Monday night I’d arrive in an Ethics night class where my professor, despite being a very thoughtful, capable teacher, instilled in me “white guilt” that might have partially overcome my Catholic school-instilled “original sin.”

My teacher was black, a preacher, and you could tell that she was very much interested in discussing ethics, and would always welcome student-led academic discussion on each topic, theory, or current event. But it was her ramblings that proved most interesting.

Every day were more insights from my teacher who preferred to discuss how awful white people were than to discuss why the social institutions of the past were bad in and of themselves. I should note that this class, despite being a majority white, was rather diverse. Also, due to the school, there were plenty of people from all walks of life.

Regardless, there was one thing we quickly discovered among every one of us, black, white, purple, green, whatever: none of us really appreciated the label that we had earned for people who lived years before us. One particular woman, also black, took offense to the fact that my teacher, having probably lived through more trying times than each of us, no doubt, had used a number of racial slurs in what was supposed to be the voice of the “privileged person” in society. According to my teacher, white males were the dominant class, and everyone else was just a piece of meat. Boy oh boy, did she make me feel great about the person I was.

Seven-hundred and eighty-five words later I get to the crux of my post: does race really affect opportunities in society? I didn’t think so. I have friends from all different backgrounds, and one who has a background still very much underappreciated; he’s of Middle Eastern descent, and has an Islamic name. He’s absolutely hilarious, a real class act, and full of some great material on how he has (irregularly) experienced the burden of racism. Most notable is a story about boarding an airplane; security was sure to take every last one of his double-AA batteries, fearing they might contain something explosive, I guess, but on the plane he saw a child with a Gameboy. I guess they couldn’t take his batteries. 😉

New research from Stanford University students says that there is actually a link between race and opportunity. The study, properly titled “the visible hand,” sought to determine how the skin color of a hand holding an item in a picture would affect the sale of a product online. The student-led study used a white hand, a black hand, and then a white hand with a tattoo, thinking they could normalize the data by using something still not entirely loved by society—inked skin on the hand of a white person. (Click here to see the study in its entirety.)

What they found was shocking.

  • Black sellers received 13% fewer responses to online advertisements, and 17% fewer offers. Fewer offers for goods for sale by black sellers ultimately mean lower prices…that’s simple supply and demand.
  • Blacks received offers 2-4% lower from people who were willing to make at least one offer than did whites. The Northeast was the least friendly, showing statistical variations that were significantly above the mean for all areas. To be fair, Northeastern shoppers weren’t all that interested in buying goods from a white hand with a wrist tattoo, either.
  • In terms of correspondence, those talking to a black hand were less likely to put their name on each email, and were 44% less likely to allow for delivery by mail of any particular good than they were others who were engaged in conversation with the white hand.

Wow. It’s conclusive. I was horribly wrong in my thesis; racism is very much alive and well, and has been demonstrated as it was in this study in a few other studies by none other than Freakonomics. I feel like an ass, but I’d much rather be on the side of the fence that doesn’t realize racism’s prevalence than on the side of the fence that is continuing it. In that way, I’m very happy to be wrong.

How much longer will racism be around? Meh, hopefully not that much longer, given that bans on interracial marriage were lifted in a number of states roughly one generation ago. But for as long as it exists, it is still very much concerning. As I’ve said before, and I’ll have to stick with it this time, too: the numbers don’t lie.

{ 8 comments… read them below or add one }

Jon | Free Money Wisdom March 24, 2011 at 00:12

Very good conclusions, it’s a sad day in fact. Unfortunately, racism will never go away. It’s part of our sin nature as humans. Freakanomics was a great book, I actually just watched their movie, good stuff! They do have a good point though for black parents. If you want your kid to succeed, give your child a white sounding name. It’s a sad world we live in, but that’s a reality.


Evan March 24, 2011 at 16:26

Racism will literally never go away. Never. Just like the older generation will always believe that the younger generation is lazy and worthless.

I understand the annoyance you had to feel in that class. Imagine being the only white Christian male in a diverse ConLaw class willing to raise your hand and say that affirmative action is complete bullshit (put much more eloquently than that lol)? I thought I was done for!

Race, just like gender and sexual orientation shouldn’t matter. I try to live my life in a way that represents that…but I also don’t believe I should be persecuted for being born the majority.

Fantastic post!


JT McGee March 24, 2011 at 23:05

@Jon – I haven’t spent as much time with Freakonomics as I would like. It’s always available, but the finding time to read it part isn’t. My girlfriend and I tried to sit down and watch the movie…didn’t move along as fast I had hoped. Maybe I’ll try it again, by myself. 😛

The name thing was really interesting–I do remember that! I don’t remember if they had tested other names, though, and I’d be interested to see how common Asian or Spanish names would test. There would have to be some planning, since there’s a lot of talk now about avoiding certain names to avoid hiring people who might possibly have work visas.

@ Evan – Oh, come on! You’re killing my idealistic world, even if you’re probably right. 😛

I can’t imagine having to defend–err, I hope you didn’t have to defend that position so strongly in a class on Constitutional law! I’m sure you did, though. Sad, really. And honestly, there are plenty of good arguments and case studies that transcend race. Most come to the conclusion that being a female is mostly unimportant whereas race benefits might be more appropriate. Whatever.

I wish I had mentioned the gender gap more in the post. The professor was at least a generation older, so she lived in a time that most every one of us hadn’t. Regardless, I’m certain that if she hadn’t made a big deal of it, the class as a whole would have ranked race relations as less trying than other social trends, biases, or what have you. We’re all reasonable adults, right?!

You put that last bit very well. That’s how I feel. I realize that there may be conflicts, and proven bias in these studies, but it should be important to note also that in terms of having the least amount of bids, there were only 16% fewer bids for a black hand than a white hand. That’s 1/6 people, still a lot, sure, but it could be far higher. I still think we’re making progress down the other side of the bell curve, and it shouldn’t be many more generations that the United States becomes incredibly intertwined, with diversity showing itself in one person, instead of groups of people.

To both of you, thanks for stopping by. 🙂


jeff March 25, 2011 at 16:13

I agree with Evan, racism will always be around. I go to school in a pretty racially segregated area, in that I mean all the kids who go to college in the neighborhood are one race and the rest of the people in the town are another. It’s probably not an ideal situation, but many universities have communities like this. The history of our nation and what happened, will always plague America and the situation of race.


Debt Free Divas March 26, 2011 at 00:01

Interesting post. I even like the tie into finance. As an African American female, I believe racism exists. Sure. There will always be some way we find not to get along…race, class, gender, background etc. We live in a fallen world (also a Christian:). You can let all that define you & present obstacles or not. That’s my two cents.


JT McGee March 26, 2011 at 00:19

@Jeff – You’re up in the northeast, right? It seems like there would be a greater wealth distribution between races there because of real estate prices. Where you could afford to live here for $2000 per month as an individual and still do quite alright, I bet that doesn’t do anything in the East. That said, wage differentials among races would suggest that other races would find it exponentially more difficult to even think about financing an education.

@Debt Free Divas – Thanks for that perspective, and I’m glad you came here to comment. I can’t add anything–you said it perfectly, “You can let all that define you & present obstacles or not.” It’s a shame that those obstacles exist, though I’m hoping in due time they start looking more like speed bumps and less like the Great Wall of China. 🙂


Our Mom Spot March 26, 2011 at 17:49

This is a very honest blog post.

Too many people like to state that color / ethnicity doesn’t matter.

It does.


JT McGee March 27, 2011 at 14:46

@ Our Mom Spot – We keep it honest around here, maybe too honest 😛 My goal is to avoid my own personal bias in writing these (especially since I would have been dead wrong here) and let the data do the talking. It usually works out for the better that way.


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