Affirmative action based on income instead of race might be something for all of us to consider. There are poor White and Asian people in America as well. In the fight for racial justice, we should consider all races.
Why Affirmative Action Matters
Jamestown, Virginia was the first permanent English settlement established in 1607. Their main goal was to harvest tobacco for profit in the New World. Unfortunately, Jamestown is also where slavery in America began when African slaves were brought to the colony in 1619.
Slavery was finally abolished 258 years later on December 6, 1865 with the passage of the 13th amendment to the U.S. constitution by Congress. It’s scary and absolutely shocking it took so long.
Because of our country’s past racial injustices, affirmative action was launched in 1961 by President John F. Kennedy to ensure that government contractors “take affirmative action to ensure that applicants are employed, and employees are treated during employment, without regard to their race, creed, color, or national origin.”
Due to the advancement in technology and medicine, our standard of living 150+ years later has never been higher. We’ve also seen huge progress in narrowing the gender wage gap and reducing discrimination against the LGBTQ community.
However, it feels like our country is more divided along racial lines than ever before. Perhaps still having rules based on race is making all of us more racist? Instead, how about shifting towards helping people who are in difficult financial situations across all races.
An Asian Minority’s Point Of View
Asians are seldom ever included in the racial debate because our income and wealth statistics match or surpass White income and wealth in America. As a result, we are largely invisible. This “model minority” myth really hurts many Asians who are not making high incomes and who are not wealthy.
Yet, if we are talking about judging people by the color of their skin, then Asians absolutely continue to face discrimination getting into college, climbing the corporate ranks, and in day-to-day living. If you live in an Asian country as a non-Asian, you will feel the same type of discrimination as well. It’s just the way things are for all minorities.
Here’s a video put together by Michael Lu of the New York Times after a woman in New York City told him and his daughter to “go back to China,” even though he was born in America.
Xenophobia is sadly even more rampant once the coronavirus pandemic hit. See this related post: The Cost Of Raising Many Children Isn’t Just The Money
All Races Are Equal
I don’t think a certain race is smarter or dumber than another race. Are we not all basically the same except for our physical features? I would be very annoyed if people thought one of the main reasons why I got into Berkeley for business school was because of my race instead of my achievements.
For those who believe race is a fine criteria to use for college admissions, are you telling me that because my skin is darker than the average person due to my Polynesian background, I get to score lower on my SATs than my lighter skinned brothers and sisters for the same chance of getting into college? Come on now. My only benefit is that I won’t get sunburned as easily during the zombie apocalypse!
As a future parent, is affirmative action based on race saying that even if I amass a $10 million fortune by the time my kids are in high school, they’ll get preferential treatment by checking the Pacific Islander box? This doesn’t seem faire to the White kid who has the same grades and scores, but who also has to work 20 hours a week at McDonald’s to afford school supplies.
Affirmative action based on income and wealth, instead of race, may be a better solution. We must help the poorest people, no matter their race, get ahead through education.
If it so happens that the poorest people have an over-representation of Blacks and Hispanics, then we should help them along with every other person who is in a difficult financial situation.
Being Poor Is The Bigger Struggle
Being born poor makes it more difficult to succeed versus being born a particular race. In a country as rich as ours, it’s ABSURD there are billionaires hoarding more money than they could ever spend while there are hungry people on the streets.
Having grown up in several developing countries, I’ve seen the trap of poverty. Some of my friends in Malaysia were forced to skip school in order to sell clove cigarettes for food.
Another friend lived in a 300 sq ft studio with her mother, father, and brother. They had bunk beds along the walls and ate in the center of the room. She didn’t go to college, but thankfully found some success as a beauty queen.
I’ve also experienced the incredible benefits of living in a stable household where we didn’t have to excessively worry about money because my parents worked in the foreign service.
Their incomes were squarely in the middle class, but they made enough for me to feel that anything was possible if I could just get a good education.
Rich Kids Have A HUGE Advantage
It’s easy to understand why being poor puts you at a disadvantage. Further, it’s much harder to sacrifice 4-5 years to go to college if you need money right now.
We all know that earnings by educational attainment tend to increase the more education we have. Therefore, education is one of the keys to a higher income. Once you add on being able to bribe your kid’s way into college, being rich really has lots of advantages.
Did you ever have the temptation to steal when you were a kid because you wanted something you couldn’t afford? My friends and I did. We used to put candy bars in our giant Slurpee cups before overflowing the drink above the the lid. Then we moved on to shoplifting t-shirts at the department store until we were caught.
Stealing is obviously wrong, but is it not far fetched to understand that when you don’t have money, the temptation to do bad things increases? First it starts with candy bars and t-shirts, then it moves on to motorbikes and cars, then uh oh, your life is ruined. I’m thankful we got caught early and were taught multiple lessons.
More Benefits Rich Kids Have
* Endless amounts of private tutoring. Once school is done, rich families can get private tutors for their kids in subjects they need help with so they can get better grades. They are also able to take SAT prep courses that cost up to $7,000 each. Then there are college admissions consultants wealthy parents can hire to increase their child’s chance for admission.
* You can study a degree in low demand. Do you know who studies art, art history, and English? Rich people. If you were poor, you wouldn’t be able to afford to get a degree in a field that wouldn’t make money. Instead, you’d be more incentivized to study computer science, engineering, economics, accounting, and business so you could increase the probability of getting a well-paying job.
* The ability to buy your way in. Private schools do not shy away from the fact that if you donate money, your child will have a greater advantage of getting in. I asked four wealthy parents once about paying for entrance, and they all said they’d be willing to donate $250,000 – $1M to get their kids into the best universities. Talk about the ultimate unfair advantage over less wealthy families.
* Connections after college. There were about 60 Equity analysts from around the world in my class at Goldman Sachs in 1999. We all spent about two months getting to know each other and getting indoctrinated with company culture.
It was amazing to see so many sons and daughters of Partners who came from non-target schools. Further, there were sons and daughters of senior government officials from China, Canada and the Middle East. And then there were sons and daughters of private clients who had at minimum $25M with Goldman Sachs Asset Management.
* An embedded circle of other rich friends. When I went to Uber HQ to meet with their marketing and operations department, everybody had the same background. They all went to private schools. All were white except for one Asian guy. They probably all live in similar areas of SF and hang around with other techie people.
People just tend to hang out with people who look like them and share similar backgrounds. I see this with bloggers in my space as well. As a result, opportunities get passed within a tight circle of people who already have a lot of advantages. It’s not a big deal unless you’re an outsider who’s trying to get in, then you are at a disadvantage because you can’t find people similar to you.
* You can take major risks to get even richer. Mark Zuckerberg and Bill Gates were already rich before dropping out of college and becoming billionaires. It’s much easier to take risks if your safety net is a mansion in the hills with a trust fund on the side.
If you are already rich and aren’t taking risks, then there’s probably some type of confidence deficiency that needs addressing. Now think about how good Mark and Bill’s children will have it growing up? Multi-generational wealth dynasties will create enormous imbalances between the rich and poor.
Affirmative Action Scenarios
“Attending the elite institutions and being mentored by prominent people is linked to social capital and systemic racism ensures that people of color have less of it.” – Marybeth Gasman, a professor of higher education in the Graduate School of Education at the University of Pennsylvania.
Here’s a chart of what’s currently going with affirmative action based on race in college admissions.
If you are a median income to lower income White or Asian kid, you are at a disadvantage simply due to the color of your skin. Some might say White kids aren’t at a disadvantage because they are the baseline majority. Unfortunately, given there is a matriculation limit, there’s a disadvantage by definition if other races have an advantage.
Since the majority of people in America are White, and the majority make the median household income of ~$55,000 a year, it’s easy to see why there’s so much angst in our country. If I was a median income earning White person, I would feel like I was being left behind due to globalization and a government who ignores me, but panders to the very rich and the very poor.
But I’m not a median income earning White person. I’m an Asian person whose kid has to score 14% higher than a White kid, 31% higher than a Hispanic kid, and 65% higher than a Black kid on his SAT just to have the same chance. Poor kid! He better inherit a “smart gene” from his mother or else! Too bad neither of us scored very well on our SATs.
No wonder why some kids feel so much pressure to do well in school. They’re buried underground and need to scrape and crawl just to breathe. I feel terrible for all the families who’ve lost their kids to suicide, drugs, and alcohol abuse due to immense educational pressure. Don’t you?
Related: The Silicon Valley Suicides (The Atlantic)
SAT Scores Based On Income
Instead of providing preferential treatment by race, let’s consider helping those who come from lower income families instead. Here’s an example of SAT scores based on income.
The median household income is roughly $55,616 according to the latest US Census Bureau on income and poverty. I’ve defined the base case income level of $50,000 – $70,000 to account for cost of living, accompanied with the median SAT score of 1,000 out of 1,600.
The higher your family’s household income, the higher you must score on your SAT to gain the same chance of admittance. Once a household surpasses the $500,000 a year income mark, putting them well within the top 1% income earners, then the child must score a minimum of 1,300 or higher to have the same chance as a child from a $28,000 a year household income who scores a 800.
The big loophole from this method of affirmative action is that parents can learn to hide their household income for the year their child is being evaluated for college admission.
As a business owner, I can simply load up my capital expenditure to reduce taxable income for the year or differ my accounts receivable for one year to try and help my kid out.
To help fight income manipulators, here’s the affirmative action policy based on wealth to help supplement the affirmative action policy based off income.
Affirmative Action Based On Wealth
According to a September 2014 report by the Census Bureau, the median household income is roughly $51,939. I’ve therefore established a baseline household wealth level of $50,000 – $100,000 to account for living in more expensive parts of the country where real estate is higher.
I stop at $10,000,000 because that is roughly the level at which you can leave your wealth to your kids estate tax free. $10,000,000 also puts you in the top 1% of net worth amounts in the country.
What these charts mean is that a kid whose family makes just $30,000 a year and has a net worth of $30,000 has a 15% lower hurdle (850 SAT score) to overcome.
Meanwhile, a kid whose family makes $280,000 a year and has a net worth of $1.5 million has to score 20% higher than the median for the same chance. The richer family clearly has more means to help their child get higher test scores.
These charts are just guidelines to help admissions officers make more equitable decisions so that their entire class doesn’t consist of homogenous kids of privilege.
Of course, no college will only look at SAT scores, so every kid still has a chance to improve his or her chances through other means e.g. essays, extracurricular activity, grades.
Our country already discriminates against wealthier people by adopting a progressive tax system. Why not stay consistent by using income and wealth to help the less privileged?
Look Beyond Race Please
The more we focus on determining benefits by race, the more racist we become. Think about all the resentment that is engendered by those races who don’t get preferential treatment.
What if they one day get into a position of power? Think about the self-doubt and guilt that may arise from someone who gets into a great school or lands a wonderful job due to merit, but isn’t quite 100% sure she did due to affirmative action.
It’s much harder to get ahead as a poorer person than it is to get ahead as a minority. Race doesn’t affect how hard we work or how long we can study.
Having to work a minimum wage job after school to help your single mother pay rent leaves you exhausted, no matter what race you are. There’s no time or money left over to attend a $5,000 Princeton Review SAT course. Are you kidding me?
The great thing about Financial Samurai is that it’s a personal finance site open to everyone looking to improve their financial situation. There are no quotas on whom can read my site. The more you are struggling financially, the more I’d love for you to read, share, and interact.
I don’t care what your race is because all different perspectives are welcome. By helping those who are struggling financially, we can help every racial group get ahead. Wouldn’t there be more love as a result?
Wealth Planning Recommendation
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Related post: Three White Tenants, One Asian Landlord
About the Author: Asian American of Taiwanese-Hawaiian descent who grew up in The Philippines, Zambia, Japan, Malaysia, and Taiwan before coming to Virginia for high school and college. Parents worked in the US foreign service. Didn’t break 1,200 on his SATs and had an OK 3.6/4.0 GPA in high school. Quit math after junior year, but played varsity tennis all four years. Attended The College of William & Mary as an in-state student, worked in finance for 13 years, got an MBA from Cal while working, and left finance in 2012 to build Financial Samurai full-time. Not academically or intellectually gifted, but usually tries really hard.
Sam, didn’t mean to mislead. I’m not Asian, but not white either :-)
Now, at the end of a long Wall Street career… you and I share some very familiar background in that regard. And when I said I worked with college admissions, I meant in a volunteer capacity for recruiting, interviewing, etc. While I was never a college admissions professional, I did get to hang with the admissions folks and get a very good inside look into the process.
Part of my point, which you may have missed, is that there is an over-reliance on SAT and standardized test admissions at many schools. Frankly, its quite a huge scam – the test providers rake in big bucks and offer a very flawed product. So, the Ivies and the top non-Ivy universities (ex. Stanford) use a broad, multi-pronged approach which includes SAT, but also includes about a dozen other factors which largely override SAT’s. Getting in means distinguishing yourself above and beyond the usual geeks… and demonstrating leadership potential, whether that’s sports, or student govt, or debate society, or music, and so on…
But, most universities are not elite institutions, and to keep costs down rather than hiring large staffs to do the hard work of sifting through essays and scrutinizing academic data, they rely on test scores for admissions. Because test scores are such a poor predictor for many groups, they end up having to “lower the standards” for women, certain minorities, etc. to gain any diversity.
This a lot like saying that reducing the amount of weight you have to bench press for women to qualify as a police officer candidates is “lowering the standards”. In reality, being a good police officer has very little to do with how much weight you can bench press – but yet it could serve as a subtle way to eliminate most women from qualifying. And then when you “lower the standards” men get to crow about how the standards have been lowered for chicks and they shouldn’t really be there, just the way minorities on college campuses are made to feel that they somehow do not deserve to be there because they displaced somebody who aced the SAT…. hopefully you’re starting to see the logic of my comparison.
The SAT is analogous to bench pressing. The scores don’t really mean much. It’s just a lazy and ineffective way for admissions offices to screen students. I would be thrilled if they banned SAT’s from the admissions process – and this is coming from someone who scored high enough to get scholarship money purely based on my SAT’s (which is to say in the very high %, probably top 5%… long time ago memory is fuzzy).
Financial Samurai says
Ohhhh I totally thought you were Asian given you were speaking about Asians not having to worry about the statistics of having to score higher to have the same chance of admissions. The suspense is killing me. What race are you?
Do you think if you were Asian or white looking at the statistics on SAT scores you would you view the numbers differently? What was your SAT score and where did you go to school?
This was a fun article: https://www.google.com/amp/nypost.com/2015/04/12/mindy-kalings-brother-explains-why-he-pretended-to-be-black/amp/
I’ve only scanned the comments quickly, but surprised no one has brought up the fact that SAT scores are a very poor predictor of academic achievement and are really only geared to predicting 1st year college grades. I seem to recall the statistical correlation being somewhat less than 0.5 for everyone, and much much lower for women, blacks, and hispanics. So, you have a test that is inherently discriminatory because it doesn’t even predict performance for large groups of people.
Having worked with my Ivy League alumni office in the past on recruiting, I saw first hand that admissions is a fairly complicated process. SAT scores are the least important academic factor compared to grades, quality of the secondary schools, excellence in sports and other extracurriculars, etc. Also, assessing a candidate’s achievement in relation to their family resources matters – for example a summer internship at a research facility would be less impressive if one’s parents were scientists.
Your articles are usually pretty well thought out, but I have to say that this one sounds much like race-baiting. Basically the old “why are us poor Asians discriminated against for being superior”. It all depends on how you define superior.
And like everything in life, there is no such thing as “fairness”. IMHO, no one necessarily deserves an opportunity to go to any particular university any more than the next person. It’s all about what the university wants/needs. At my college it was said that they could fill the entire freshman class with Valedictorians if they had wanted to. But then it would have been a much more homogeneous, less interesting class. The idea was to give us all exposure to a dynamic and interesting group of people with varied skills, talents, and backgrounds, and I have to say, having been the beneficiary of this mixed stew approach that it works brilliantly.
I was not a high school Valedictorian… I was maybe #3 or #4 in my high school class and did respectably enough on the SAT but didn’t ace it… but still graduated from the top ranked university in the U.S. with high honors. When I arrived on campus freshman year, coming from a relatively weak public school system, I was completely out-classed by my prep-school chums. But, I caught up eventually. I just had to work harder. I’m very very grateful my college didn’t pursue a one dimensional approach to admissions.
Sam, I’m sure as a parent, you feel bitter at the thought your children might be treated unfairly because of their ethnicity. But, on this one you’re barking up the wrong tree. Probably the opposite is true. Your kids will do quite well in life because they will have the benefit of your intelligence, experience, insight, and frankly… wealth. Odds are stacked with them, not against them.
Financial Samurai says
This is great and congratulations to you on your academic success. What do you do now for a living? It is reassuring to be able to ignore the statistics and know that SAT scores don’t matter much in college admissions then.
Can you confirm you are Asian when I share your success story with other Asian parents and kids (I coach HS tennis btw) all stressed out about the process?
“I don’t think a certain race is smarter or dumber than another race. Are we not all basically the same except for our physical features”
For a guy that is pretty intelligent, you are completely ignoring genetics.
Are different dog breeds the same besides ‘how they look’?
They have different intelligence, temperaments, health issues, etc.
The same applies to humans who look and act completely different.
Financial Samurai says
Who says I’m pretty intelligent? I’ve never said that.
Please feel free to elaborate on which races are the most intelligent. Also, how would you solve this issue I’m discussing? Are you against helping the poor get ahead?
I’ve seen studies about race and intelligence, but happy to hear your take. One note, imagine not being a White male taking the SAT. Perhaps there is a disadvantage / advantage for those who come from the same background as the creator of a test.
There is a thing called IQ levels which play a massive part in intelligence.
East Asians have the highest IQ. You can Google this and check out the charts and info.
To solve a problem- you have to address the problem first.
No- not all people are the same. Some races are more intelligent (By IQ and other measures) than others. If you deny this than you cannot solve the problem.
Have you heard of Stefan Molyneux? He has presentations on race, IQ, criminality, welfare usage (by race, by immigrant, etc). If you want to look into it more perhaps he would be a good start.
No there isn’t a disadvantage because of the “cultural background” because by doing so you and others are ignoring IQ. Let’s start on IQ then we can get into the Cultural Marxist ‘structural disadvantages’ that we are told to believe in and never question.
But, there are real SAT disadvantages for Whites/Asians as other non-Whites/non-Asians are given points just for being non-White/non-Asian.
The point of affirmative action is that institutional racism still exists in the US. Basing affirmative action on income sounds like a way of pandering to poor uneducated whites who still have more opportunities that blacks with more education.
“The divergences race creates are easily illustrated looking at 40- to 61-year-olds. At middle age, a black graduate-degree holder has just about the same odds of being a millionaire as a white person who only completed high school.”
I get where you’re coming from, Sam – and you’re certainly right in saying that having earnings/wealth based qualifiers will help may low income people (including people of color) improve their lives, while cutting back on a few people of color who may be reaping unnecessary rewards off the system. However you’re also trying to solve two problems with one solution, and it just isn’t sufficient. You are solving the problem of helping low income people (of all races), but you aren’t solving the centuries old problem of racial bias and discrimination. We’re half a century past Jim Crow laws and red lining of neighborhoods (I’m assuming you know what this is, given your expertise in real estate). Racial bias is a very real thing, and it should have no place when it comes to academic opportunity or proving your worth for employment – but it very well does exist.
We’ve all heard the studies of how the likelihood of getting a call back changes for the exact same job application when the person’s name “sounds” like the name of a person of color, as opposed to a “mainstream” Caucasian name. Even you mentioned in your responses of how you wouldn’t want to go to college in a place where 95% of the population was white – because there IS some level of treatment like an “other” that happens that shouldn’t (I went to college in a 96% white town, as a South East Asian…it wasn’t unpleasant, but you ALWAYS do feel like an outsider). I’m not even saying these treatments happen out of malice – people of color are routinely given more scrutiny by people in positions of color (I just heard about a study this week looking at kids in kindergarten, and even how at that age teachers unwittingly pay more attention to minority kids “acting up” while the levels of distress caused are pretty much the same with kids of all races).
So your proposition is a good one, no doubt – but it doesn’t need to be just one or the other, why not have some level of minority benefit as well. After all, racial diversity does benefit everyone, especially in an environment like college where you’re learning more about coexisting and other peoples’ ways of life for the first time. I find it very interesting that many people love to talk about people of color getting a “free ride” through various things in life, but have absolutely nothing to say about implicit systemic bias that has been proven time and time again. No matter how hard your life is, the truth is, in this country at least for now – ask yourself if your exact same life would be better or worse if you were white vs. black/brown/whatever…not just specific instances, but life in general. I’m yet to meet anyone who actually truly believes that being a minority gives them a leg up in life as a whole.
Interesting and controversial article! You’ve got some serious balls to tackle a subject like this.
As a minority, I’ve experienced racism from time to time in my life, but nothing like what’s been happening in the states. I’ve never been afraid for my life due to my race and I’m grateful for that.
I think you’re right, as Asians, we are more invisible than those who are black, who have to struggle on a daily basis with racism and discrimination.
I don’t know enough about AA to comment on whether replacing it with income/wealth quotas would help. But I do know that from friends’ experiences, growing up white and poor, still gave them many advantages over growing up poor and black. If you’re a kid and do stupid shit (because kids do that ALL the time), the cops might let you go if you’re white, but if you’re black…your life could be ruined.
That’s my 2 cents from my limited exposure to this subject, based on my friends’ experience so take it with a grain of salt. But as a result, it colours (no pun intended) my opinion on whether switching from race to income would actually help.
ZJ Thorne says
As a white woman, I have benefited far more from AA policies than most African American folks. The systems put into place to try to correct for hundreds of years of abuse were quickly transformed to make people like me better off. I also benefited from my immense poverty. I got some great scholarships to a fancy school because they wanted to have a diverse lived-experience. The fact that I was able to get into the school without the advantages of money and the safety money provided made me proud. I am more impressed by people who beat the system than rich folks who “get their due.”
There’s also really interesting research into the impacts of the stress of living with racism and in a racist country on the bodies and lives of people. The diseases linked to stress that are common for Black Americans are in fact less common in black people in other countries. Even just Canada has a major difference.
There is also a lot of new research into residual stress passed down through families in their DNA. If your grandfather was a sharecropper with PTSD from seeing lynchings, your body may very well experience similar reactions even if you are unaware of his story.
I am for race-based AA. I’m not opposed to poverty-based AA.
This is a complex issue, it needs lots of the political will to reform AA and other policies. The major underlying cause of the growing gap between the haves and have nots in the last 30 years are our current policies on public school funding. As we all know, the majority of public school funding comes from property taxes. Rich kids tend to live in more expensive zip codes, property taxes are higher and therefore the public school in these zip codes have more funds, able to hire the best teachers, provide extra-curricular, able to implement programs to help needy kids and to prepare them for college. Long Island, NY is an perfect example where teachers are paid on average $100K per year and able to produce quality kids year after year. Kids in these zip codes tend to perform better in exams and goes to college in record numbers. This is the case throughout the US, better zip codes = receiving a better early education. As a result, regardless if you’re white, black, brown or yellow, the zip code where you live growing up can pretty much predict your future. Of course, there are outliners but it takes greater effort and hard works.
Cash Flow Celt says
I was fortunate to be a good student when I went to school for economics. As such I was able to tutor multiple kids through my degree.
Being just a lowly bachelor’s candidate, I charged $35/hr. My best clients were seniors in high school taking their AP Economics to get into the best schools. I don’t believe I ever went into a home that was worth less than $450,000 – a large sum in Central Florida.
My “worst” clients – which were one offs who got one session and never came back – were almost always college students, or middle class families trying to afford it for their failing child.
Your point about tutoring is so unbelievably true.
I think the rationalization for AA is to give an edge to the minorities that were historically discriminated. These injustices in the past led many minorities to grow up in households that are poor, without role models etc. Now, AA has been in practice for more than a generation (generation defined 30 years)..so there are many (still a small percentage) from the minority groups that do have college-educated parents, grow up in nicer neighborhoods and continue to receive the benefits of AA. For e.g. Obama kids should not really get the leg up in admissions to college because they are African American :-)
This is actually a problem because colleges, employers etc prefer minorities that come through these circumstances because they do better on various metrics (test scores etc) relative to their minority brethren from the inner city. Thus, the truly deserving do not actually get the benefit, but the “rich get richer”.
While I agree with the philosophy of your argument to replace race-based quotas with income/wealth based quotas it is too much of a rip-and-replace solution. I am suggesting a smaller step by eliminating the benefits to minorities from “better” zip codes and giving that advantage to students from zip codes that are on lower socio-economic scale. In California this method is in practice (in some limited sense) when it comes to public school funding. The nearly 1000 school districts are divided into “basic aid” districts and needier distircts (forget the exact term) and public schools in richer communities get minimum funding and end up making up the balance in community fundraising.
Romeo Jeremiah says
I’m with Joan, Sam. To shift affirmative action from race to income ignores some of the main reasons why affirmative action policies were introduced in the first place; to attempt to correct a historical injustice.
Then, as many people have already pointed out, the racism in this country will likely only be amplified once your plan institutes an even greater disparate impact percentage on the existing minorities.
Good attempt at a solution but it’ll lead us to the same general outcome: race based injustice.
Financial Samurai says
Romeo! Missed you at Fincon in San Diego. I made sure Latisha wasn’t up to no good :)
I’m with you on the absolute need to correct a historical injustice. I do wonder whether we can take into account race as well as income as well. After all, this is a personal finance site, and not an anthropology site, so I’m always going to look at things from a financial angle.
College admissions decisions are not based solely on standardized test scores. You use Espenshade’s data, but in 2015, Espenshade was quoted as saying “I stop short of saying that Asian-American students are being discriminated against in the college application process because we don’t have sufficient empirical evidence to support that claim.” In the same article, (which is in the May 16, 2015 edition of the Harvard Crimson) Espenshade mentions that researchers do not have access to all the materials (essays, letters of recommendation, etc.) that are used in the college application process. Therefore, you have undermined your whole argument by using data that has a major blindspot.
I encourage you to conduct more research on race-based affirmative action. It is not about lowering qualifications for some groups (or raising them for others). Affirmative action is meant to encourage employers, universities, etc. to look for qualified applicants from marginalized groups. It is also not about earmarking a certain amount of spaces at universities or positions at corporations to particular races. The Supreme Court already did away with race-based quotas in the Bakke case in 1978. It is about attempting to right some of the wrongs that resulted from official and unofficial policies that were discriminatory toward marginalized groups including women, people of color, people with disabilities, and people who identify as LGBTQIA.
While I agree that people who are poor are in need of some assistance, I would not pit the need for class-based affirmative action against the existing policies focusing on race, gender, disability status, and sexual orientation. There is no reason why all of these policies cannot coexist. In fact, I am confused about why you singled out race-based policies.
Financial Samurai says
Thanks for sharing your thoughts. I sincerely hope Espenshade is right about no discrimination among Asian-American students. My time is over for trying to get into college or climbing the corporate ranks. My main concern now is for my future kid(s). One of my blind spots is that I’m hyper aware of Asian-American issues as an Asian-American person.
Here are some examples:
* The Department of Justice is suing Palantir for racial discrimination on 9/26/2016. In one case, according to the review, the 730-person applicant pool for an engineering position included 77 percent Asian candidates. Palantir, however, hired six non-Asian and just one Asian candidate. In another case cited by the Labor Department, a 1,160-person pool with 85 percent Asian candidates led to Palantir hiring 14 non-Asian and 11 Asian applicants. The likelihood of that happening from chance is one in 3.4 million, according to the lawsuit.
Another take: According to the lawsuit, Palantir looked at a pool of 130 applicants for its engineering intern positions: 73 percent of those who applied were Asian. Ultimately, the lawsuit says, the company hired four Asians and 17 non-Asians. “The likelihood that this result occurred according to chance is approximately one in a billion,” the lawsuit says.
I’m surprised by this statistic, and also shocked the government is actually fighting for Asian Americans. I don’t remember when was the last time this happened.
*A discussion on whether the Ivies discriminate against Asians due to the requirement for higher GPAs and test scores, quota limitation.. Here’s the official complaint against Yale, Brown, Dartmouth.
I don’t pretend I’ll be able to pass on genes smart enough for my child to get into an elite private school one day. All I hope for is that he has a similar chance of entrance if he works hard. I’m sick of just accepting the mantra, “Work twice as hard to get half as much,” whether it is true or not. But perhaps he will be more resilient and have more endurance than me since I’ve already lived my life.
The purpose of this article is to help people think about different perspectives. To have a conversation about why are things they way they are and potential solutions. It’s the best way I’ve found to create harmony. Just read the comments so far. No hate, just civil discourse. And, I haven’t had to delete any hateful comments either.
I’m still hoping someone who opposes changing affirmative action by race to income/wealth share a post on why, with their own unique story. I welcome such a post with open arms.
Thanks for your response. I’m an African American alum of one of the institutions listed in the complaint. As a result, the complaint and subsequent articles debating its merit made their way through my circle of friends a few months ago. We have been actively following affirmative action cases because of their obvious ramifications for our (unborn) children. The crux of the complaint is that the holistic admissions process is discriminatory to Asian students, but it still falls back on Espenshade’s research and a lot of Asian model minority stereotypes (which are also problematic https://www.huffingtonpost.com/sahra-vang-nguyen/the-truth-about-the-asian_b_8282830.html (I’m not always a fan of Huffington Post articles, but I did like the graphics in this one.)). If there is definitive evidence that Asian Americans are being discriminated against as a result of race-based affirmative action policies, then these policies should be reformed because they are still needed. There is a lot of research on employment disparities suggesting that even with affirmative action policies in place, African Americans are less likely to receive job callbacks than their White, Hispanic, or Asian counterparts even when their applications were equal (https://www.nber.org/digest/sep03/w9873.html). In addition, there was a new report by the Economic Policy Institute that showed that the racial wealth gap in the United States is larger today than it was over 30 years ago in spite of the presence of affirmative action policies and increased educational attainment among people of color (https://www.epi.org/publication/black-white-wage-gaps-expand-with-rising-wage-inequality/).
There’s always room for improvement, but I do not believe that an income-only model gets to the heart of the issue. I have read some of the comments on this blog and I saw that at least one person felt that affirmative action was the reason the people feel that Blacks and Hispanics are less capable employees or students. In reality, it is the other way around. Blacks, Hispanics, and other marginalized groups need policies like affirmative action to counteract the negative stereotypes (typically rooted in racism, sexism, etc) and years of troublesome policies and practices that prevent many people in positions of authority from seeing us as capable.
Financial Samurai says
Thanks for highlighting some of the research. I will have a deeper look for sure. I don’t believe one variable should be used to analyze a person. I do believe that the more we can talk about these important issues in a respectful and open manner, the more we will be able to solve problems or at least lessen the negativity and stereotypes.
I did my best to think about as many angles as possible before writing this post. At least some people can see one perspective from one Asian American. Now other people can see different perspective is from at least 50 other people in the comments section.
I’m looking forward to reviewing and publishing a post from Joan, one of the commenters who studied at Howard University after she speaks to her advisers. And if you would like to share your perspective, I welcome it as well in a formal post. You could help a lot of folks think different with my platform as it is relatively large.
Thanks. I would like to share my perspective in a formal post. My academic email is linked to my comments. I look forward to reading Joan’s post as well. Her reaction to “A Black Man” was similar to my own. In some ways I can empathize with him. It was painful when people would attempt to minimize my college acceptances (and other major milestones) by mentioning affirmative action and claiming I stole their spot–especially when many of the people complaining had grades and test scores that were lower than mine (meaning that even if college admissions were based purely on numbers, I still would have had a better chance for acceptance). Thankfully, I had a very knowledgeable mother who told me stories about her childhood as one of the few black children living and attending school in a predominately white neighborhood. She helped me to understand that affirmative action was more of a safeguard than a leg up. Thanks the her constant encouragement, I learned to tune out the criticism. After all, even if affirmative action did help me to get into an elite college, it didn’t earn any of my degrees.
I thoroughly disagree. I can’t even begin to expand on how immigrants do not have the same challenges as African Americans because I’m a black immigrant and I see the difference. I see people try to be nicer to me at work because at least I’m a foreign black. Being Asian or from anywhere else, you do not have an understanding of this touchy subject. My candid advice is to leave this for African American leaders to hash out with people in power.
No one is asking for a free ride but being born an African American in this country is the surest way to make sure you don’t reach your full potential in life. There are lots and lots of things in your way to ensure you don’t make anything of yourself, and just when you do, you may get pulled over by the wrong person.
Anything that tries to remedy this huge and embarrassing gap should not be opposed. The whole country will just have to deal with it.
Part of privilege is to be so high up there that you don’t have a clear view of such issues. You don’t understand this topic.
I agree. Only black people get discriminated in America. The discrimination against Asians, hispanics, Native Americans and others do not count as much.
If you are poor and not black you’re just gonna have to work that much harder.
What are some of the difficulties you have faith as an immigrant black person in America?
Feel free to ask yourself why you’re so quick to defend a system that has a long history of discrimination. I don’t wish to share my experiences with you, bye!
What does everyone automatically default to the idea that there are no racial differences in average intelligence and other behaviors – time preference, violence, athleticism, etc. – and that racial differences are limited to melatonin when all the new genomic science seems to point to racial differences that are unfortunately much deeper than this? If one truly believes in evolutionary biology, then one must acknowledge the possibility that some races are on average better at certain things than others. In particular, given the brain is a very energy intensive organ, it seems highly unlikely that it would be spared from evolutionary forces – i.e. “use it or lose it” – and different races were separated from one another since migrating out of Africa for tens of thousands of years, in different regions with different selective pressures. So if one believes in Charles Darwin and evolution, this is reality – read the 10,000 Year Explosion …perhaps we must acknowledge that North Asians are on average more intelligent than Europeans, who are in turn more intelligent on average than Hispanics, who are in turn more intelligent on average than Blacks….nobody wants this to be true, but sometimes we have to deal with the world as it is, rather than as we wish it to be.
Many people do believe there is an innate difference in intelligence and behavior among the different human races. Most people choose not to voice it publicly since it’s a taboo societal subject and not worth the hassle that comes along with it. A government policy has to benefit majority of people in that society enough so that people won’t riot and cause a chaos in society. It doesn’t matter all that much if it’s income or race based. However, if you look at people’s actual behavior, you’ll notice that as a group, the majority of people stick to their own race in their personal lives.
I hear you James. :) It really calls into question the degree to which we actually live in a free society if we cannot discuss empirical data and “go where the data leads” vs. succumbing to taboos out of fear of ad hominin, “name calling” attacks and “career-destroying” retaliatory strikes by the religiosity enforcers…speaking of causes of angst! And to think we believe we are so superior to North Korea where going against the “Great Leader” will lead to ruin, here if you go against the liberal egalitarian narrative the same thing will result. Very sad!
Here is one of the biggest drawbacks of affirmative action: When I was in high school in the late 1980s and early 1990s, I thought Hispanics and Blacks were dumber than average because they got preferential treatment and support from counselors and college admissions. If they weren’t, why did they get special treatment when we were all just kids studying the same thing? Almost everybody I talked to who is not Black or Hispanic thought the same way. Then we wondered why our Asian classmates didn’t get the same treatment. Then we saw them staying after school for hours and realized that there is a lot that can be said for a strong work ethic. They went to weekend school as well.
Until this day, it’s hard not to think about these two racial groups as being intellectually inferior and not as good in medicine, dentistry, and other important things due to the affirmative action, even if it’a not true. My type of thinking hurts them, but I can’t help it based on my experience growing up.
Ban preferential treatment based on race to minimize racism.
For every “winner” in this proposal there’s going to be a”loser” How do you propose to help the “losers?”
You can’t compare a poor kid to a rich kid. The rich kids will always have the advantage. Always have, always will. That’s life, and it’s the same in every country regardless of type of government.
A proposal like this will help the poor, hurt the middle class and have no effect on the rich.
Just my 2 cents.
Financial Samurai says
The poor – losing
The middle class – neither winning or losing, although many people think they are losing despite our standard of living never higher
The rich – winning
So how is it that strictly focusing on helping the poor is a bad thing? Helping the poor does not mean hurting the middle class. And despite having to score a 1,300 on your SAT if your family has a net worth between $3M – $5M to compete on ONE variable, there are plenty of other variables to compete on.
And if you can’t get into the top school of your choice over someone who is less wealthy, you still have a great chance of doing anything you want there are plenty of schools to attend.
Ms. Montana says
Poverty and the host of things that can go along with it are devastating to kids trying to get ahead no matter the race. We work with a lot of kids from very economically challenging situations, and honestly sometimes I feel so discouraged about their future options. When there is no heat, food or clean clothes in the house, it’s hard to give a good pep talk about studying for the ACT test. Getting into a good school seems ideal, but I would be thrilled if I could find a way for them to swing community college, then a state school.
Ken Crowder says
I believe it is important to clarify whether or not you are in support of government-mandated affirmative action and company/school/organization selected affirmative action. This is a HUGE difference as one allows for the personal liberties of institutions and one overrules them.
IMO, this is a productive line of thought that seems to have great merit in aiding disadvantaged people’s climb up the income ladder. The removal of “race” is a beneficial step in the right direction that individuals, schools, and organizations would benefit culturally if they decided to go down this road.
The key is to allow them to make that decision and not to force them into an action that they are not aligned with.
Limiting one person’s beliefs to promote another is not the role of government and is discriminatory in nature.
Great article as usual Sam!
I applaud you for having the courage to post your thoughts on the issue as well as a potential solution whether I agree with your thoughts and solution or not.
Great dialog in some of the comments as well.
Financial Samurai says
Dave, what are your thoughts and solutions? I hope to get a guest post from the community elaborating why affirmative action based off income and wealth is wrong.
This topic is important for everybody to discuss. We’d all like to think we live in a meritocratic environment, but it’s definitely not 100% the case.
Used to be against affirmative action but since my wife is a minority my kids will be able to check off a minority box. Now I see the light. Go affirmative action! Damn white peoples oppressing my kids!
Finance Solver says
I second the earlier comment that you should be president. Or at least an influential person in power!
I never realized how much money really gives an advantage to someone. If my parents hadn’t contributed to my college costs, I would be in a worse position, financial wise, than if they hadn’t. The amount you start off with matters significantly and I consider myself to be in a better position than someone who had to finance their college with debt. They may be smarter, better educated, or better all around, but I have a head start just because my parents were well off?! (something I don’t control nor was it earned).
You mentioned a lot of advantages to get into college as well. Some of my friends couldn’t afford a tennis racquet to play in high school. Less extracurricular activities = less competitive. That’s not to say poorer friends couldn’t make it to a top notch school but it’s harder for them to. That is not fair!
Pete A says
Hey Sam, long time reader here, first comment (about time!) – very poignant and thought provoking post.
Being in the health space myself, one thing I’ve thought a lot about is how poverty can have such a negative effect on health, too.
Stress, odd working ours, lack of sleep, poor nutrition, lack of basic health education… it goes on and on.
Speaking of disadvantage, how can anyone get ahead if they have poor health and low energy as a result?
Financial Samurai says
Good point. We seem to be having a health epidemic here where over 50% of the US population is overweight, which leads to complications down the road. But hopefully, as kids, we’re healthier b/c we’ve had less time to kill our bodies.
Mustard Seed Money says
Thanks for tackling such a controversial topic especially in light of the events that are going on around us.
I think income based affirmative action would/could be interesting on paper but I think with the majority in the US being white that this could further squeeze out minority applicants with similar backgrounds.
Malcolm Gladwell brought up an interesting point in David and Goliath about being a big fish in small pond vs. being a small fish in a big pond. He talks about a woman that went to an Ivy League where she loved math but got discouraged when she was surrounded by people that were better at math than her. It made her change her major and career completely. Looking back she wondered if it made more sense to go to a less prestigious school that she could excel at and get more of the professors time and attention. Which some would say he dances around affirmative action.
But before that he wrote Outliers which looked into race based admissions and said the students, both affirmative action and non-affirmative action, were virtually identical when they graduated in GPA and salary.
This is a rambling reply to say I don’t know but thanks for sharing your thoughts.
Financial Samurai says
“I think income based affirmative action would/could be interesting on paper but I think with the majority in the US being white that this could further squeeze out minority applicants with similar backgrounds.” – This is the problem w/ my proposal. So the solution is to focus on income based affirmative action and make sure there is a proper demographic representation of all races within this system.
“But before that he wrote Outliers which looked into race based admissions and said the students, both affirmative action and non-affirmative action, were virtually identical when they graduated in GPA and salary.” – Can you elaborate what you / Malcolm means by “virtually identical”?
If this is the case, then the solution is to send as many kids to college as possible versus the current ~35% college attendance rate.
Mustard Seed Money says
I believe that Gladwell’s point was that while affirmative action students may have lower grades and SATs when arriving that when they graduated from college that these students had similar GPAs (he didn’t provide a breakout) and salaries out of school.
Did it take into account drop out/transfer rates? I would expect anyone to make it to the end to be about par.
The Alchemist says
I have advocated for this approach for eons. Basing ANYTHING on race is, by definition, racism. The simple fact is that the folks who need help is the folks who are poor— and those may be of any race. Much fairer, in my opinion.
What about the Jews. Do you have any information on this minority?
I think maybe income should be a factor in admissions, it’s clear that wealth is a huge factor in future academic and economic success and it’s hard to argue that a guy from a wealthy black family needs some sort of leg up as opposed to someone from a poor white family. But at the same time, I think it’s hard to take people seriously when for 150 years blacks were property and then after that, second class citizens in most of this country, and all of a sudden, NOW we decide we want to be color “blind”. Well that sounds nice, but it would have been nicer if that were the case from the very beginning. Think about it this way, it’s like running a marathon where one person has a 50 pound weight tied to his waist. Halfway through the race you finally let the guy take the weight off and then blame the him for being behind and pretend the race was fair to begin with!
I think Asians American should be particularly sensitive to this fact, even though on the whole we have done well economically in this country. We have to remember that we are the beneficiaries of the Civil Rights movement and we wouldn’t have any of this economic success today without it. Has anyone wondered why even though there are a billion Chinese people on earth the Asian American population in the US is only about 5%? It was because of the Chinese Exclusion Act, which basically prohibited immigration from China and other Asian countries for like 75 years. Anyone want to guess when the Act was repealed? 1943. Does that shock anyone? My dad was born 5 years after that. This is not ancient history folks. So my only point is that this country was built on racial prejudice and discrimination. I’m not saying affirmative action is the best way to solve it, but to pretend that policies as recent as 50-60 years ago do not have an impact on racial minorities today is to deny the law of cause and effect.
Financial Samurai says
Good point about the Civil Rights movement helping all minorities find more equality in society.
I don’t think anybody is pretending that the injustices of the past haven’t had a clear and negative impact. If you only get to start 5 seconds after the gun has gone off in a 100M dash, you’re never going to catch up unless you work 5X harder, or your opponent trips, squanders, or gets lazy.
America is much more diverse now. The pivot to income and wealth can help more people. Isn’t helping as many people who need it the most important goal?