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Systemic Disadvantage

National Affairs

January 3, 2023

The term “systemic racism” freezes social, political, and policy conversation. As soon as the words are uttered, contending parties retreat to their respective corners to engage in a mutual misunderstanding guaranteed to produce anguish and anger on both sides. In a way, the resulting stasis serves the interests of both sides: Progressives are relieved of the burden of explaining the “systemic” side of the equation, while conservatives benefit from the moral outrage of being wrongfully accused of racial animus. It’s a win-win for the combatants, but a loss for everyone else — particularly low-income Americans of all races whose interests are often at stake.

Our racialized discussion of public policy creates plenty of problems, but its impact on our understanding of poverty is especially acute. While blacks are roughly twice as likely as whites to be below the poverty line, whites below the poverty line outnumber blacks 15.8 million to 8.6 million. Thus whites, by sheer weight of numbers, absorb the bulk of programs like the Supplemental Nutrition Assistance Program. At the same time, the relative intensity of black poverty has occupied, until very recently, disproportionate space in our public imagination.

Indeed, for decades, black poverty was one of the principal foils of American politics, while white poverty was rarely noticed. Yet a country can only ignore the obvious for so long. During the long recovery from the 2008 recession, poverty among America’s white population — and the family breakdown, educational failure, joblessness, and substance abuse associated with it — finally came to a full boil, fueling a new populism and significantly aggravating social and political tensions.

The increased salience of white poverty has been accompanied by a shift in political rhetoric among public officials, mainly on the right, seeking to make hay out of white grievances. After favoring racially tinged “cultural” explanations for black poverty (“welfare queens,” “loss of work ethic”) for decades, right-wing populists decided that when it came to white poverty, structural issues like trade and automation mattered. “Libertarian fundamentalists” and “cosmopolitan elites” pushing deindustrialization, rather than “culture,” were deemed the headwaters of white poverty for the simple reason that it’s easier to claim victim status when impersonal forces — not attitudes, habits, and behaviors — are responsible.

The truth, however, is that structure and culture work together to create, reinforce, and compound disadvantage. For minorities who are disproportionately poor, this dynamic is now understood as systemic racism — the way history, culture, laws, institutions, and even anti-poverty programs themselves combine to reinforce disproportionate levels of intergenerational poverty. The same factors, with the significant exception of race, affect low-income whites who find themselves trapped in poverty that transmits across generations. If we were to focus more heavily on the socioeconomic roots of poverty rather than on racial categories, it might be possible to fashion policies better tailored to the needs of the diverse populations that make up America’s poor.

Unfortunately, our polarized political environment creates incentive structures that encourage contending parties to double down on racial categories in order to motivate core constituencies. In a 50-50 nation, weaning ourselves from a racialized poverty debate will require overcoming that dynamic. We can begin that task by examining how the clash over race and poverty began, determining where the battle lines are drawn, and developing an alternative analytical framework that might give the nation a way out of its sociopolitical poverty cul-de-sac.


While systemic-racism analysis can be helpful in explaining why black Americans are disproportionately poor, the term itself is both misunderstood and manipulated for political advantage by both its proponents and opponents. As we’ve seen on college campuses, charges of systemic racism can be used as a way to shut down debate, stifle freedom of inquiry, and institute or perpetuate race-conscious policies. Conversely, for white Americans — especially those on the right — it is advantageous to define racism as narrowly as possible to mean explicit racial animus while ignoring or denying more subtle, implicit, and, yes, systemic forms of racial bias.

The U.S. Constitution and federal and state laws prohibit de jure racial discrimination and provide multiple avenues for acting against it. There are many “eyes,” both public and private, searching for signs of explicit discrimination, meaning that practicing it — or even appearing to do so — entails great peril. Corporate America — which is particularly conscious of the legal risk of engaging in, contributing to, or even permitting racial discrimination — goes to great lengths to identify and ban race discrimination while engaging in affirmative efforts to recruit and promote racial minorities. The abhorrence and anger with which most whites reject the charge of racism is a testament to how thoroughly bigotry has been delegitimized in American society.

De jure discrimination and explicit racial animus, however, bear little if any relationship to what systemic racism actually means. Systemic racism is impersonal and often unintentional, formed by layers of historical and cultural sediment that choke off social and economic opportunities. There is no such thing as a “systemic racist” — a man behind the curtain of society orchestrating a conspiracy to deprive people of their rights or access to opportunity. Systemic racism is far more subtle than personal racial animus, but it is nonetheless real.

Take something as mundane as swimming. Public-health and accidental-death data show that blacks drown at much higher rates than whites. If this were due to overt racism, it would mean that whites were actively encouraging black drownings. Explicitly racist theory, on the other hand, might posit that blacks drown because they are less “buoyant” than whites. Both of these explanations are obviously unreasonable and untrue.

By contrast, a systemic analysis would point to a substantial body of historical research that shows how the ancestors of enslaved Americans from West Africa had a vibrant swimming culture before they were kidnapped and sent to work in the Caribbean and North America. But once they were enslaved, slaveholders are believed to have discouraged them from learning how to swim as means of preventing escape. Even when slavery ended, Jim Crow apartheid in the South and widespread segregation of swimming pools virtually everywhere else cut off blacks’ access to swimming education and recreation. Their water activities were restricted to rivers, lakes, and ponds, which are inherently more dangerous than supervised public pools.

Once de jure segregation was outlawed, blacks continued to have limited access to swimming facilities as white populations moved to the suburbs and urban public pools began to close. In most major cities, the low ratio of public pools to residents became, and still remains, a barrier to blacks’learning how to swim. The risk and fear of drowning thus persists within black communities.

In short, long-dead formal discrimination perpetuated itself not through direct racism, but through systems of access, knowledge, culture, and capacity. This pattern of intergenerational disadvantage manifests in other areas as well: Education, home and business ownership, and wealth accumulation are all examples where historical economic and social deprivations have contributed to ongoing deficits and dysfunction. So while the perpetrators of de jure discrimination and their direct victims are either long gone or fading into history, the consequences of historical racism linger, leading to wide, continuing gaps between the races in family formation, physical health, educational outcomes, employment, police treatment, and wealth.


Since the civil-rights movement, America has made great strides in reducing overt racial hatred, driving much of what remains of it underground through a combination of laws and informal sanctions. Yet our habit of ferreting out racist actors to explain why racial minorities continue to face disadvantages has proven difficult to shake. Sadly, this misplaced focus has become something of an obstacle to designing public policies that expand opportunity and reduce inequality for all — black Americans included.

Recent advances in our understanding of racial bias have compounded the problem. As researchers have found, racism is not always overt; it also takes the form of implicit bias — attitudes that are not consciously held but nonetheless influence our understanding and actions. Implicit bias against racial minorities in America is well documented and continues to influence social and economic outcomes in a variety of areas, including education, employment, and criminal justice. Unfortunately, it also makes for a convenient scapegoat for those prone to searching for racism-based explanations for racial disparities.

One example occurred in a Brookings Institution analysis of data that purported to show race-based disparities between real-estate values of black- and white-owned properties. The authors of the study found that homes located in neighborhoods where the black share of the population is 50% or more are valued at about half the price of homes in neighborhoods without black residents. After applying 23 controls to the data in order to compensate for possible confounding factors, the Brookings researchers concluded that the white-black gap in home values was due to implicit racial bias among home appraisers.

The Brookings conclusion struck researchers at the American Enterprise Institute (my employer) as too simplistic. Brookings generously shared its data with the AEI Housing Center, which reanalyzed it with two additional controls: number of loans with only one buyer — a rough stand-in for families with a single head of household — and Equifax Risk Score, which assesses credit risk. These additional controls tested for the stability of the borrower (two borrowers default at lower rates than one) and the statistical risk of default among buyers. With these additional controls, the differences in home values between black and white neighborhoods were no longer significant. Furthermore, when predominantly black and white census tracts with similar numbers of single borrowers and similar credit-risk profiles were compared, AEI’s analysts found no difference in appraised value of homes. In other words, what the Brookings report attributed to racial bias among appraisers was, in the AEI analysis, actually due to socioeconomic differences — single-headed households and borrower risk — that had nearly identical statistical effects on home values across racial groups.

In this instance, a focus on racial bias led to a distorted diagnosis. If policymakers had adopted regulations based on this conclusion, they would likely have contributed to continuing racial disparities in homeownership. Artificially elevating the values of homes in majority-black neighborhoods would likely lead to higher rates of default among this population. Increased defaults damage credit scores, and low credit scores make it more difficult for individuals to borrow money in the future, thus helping perpetuate wealth gaps. When viewed in this light, it becomes clear that a policy meant to remedy racial disparities might have increased them over time.

The search for contemporary racist actors when socioeconomic factors are often the real culprits causes us to fall back on regulation, subsidies, and other coercive measures that are ill-designed to target the issues we are trying to address. Such policies not only fail to solve problems, they inhibit the development of responses that might actually promote social and economic progress.


Blacks in America face unique challenges due to racial discrimination and bias, both past and present. But they also share many other disadvantages with low-income whites.

Part of this overlap can be attributed to historical practices. Before the American Revolution, many whites were “exported” from Britain to North America as indentured servants or in lieu of punishment for criminal offenses. White women were frequently forced to marry, and were evaluated for their “breeding capacity.” Contemporary writers began to refer to these poor whites as “trash” or “lubbers” (i.e., clumsy, poorly educated, brutish). In her book White Trash, Nancy Isenberg notes that “white trash southerners” were thought to be a different “‘race’that passed on horrific traits, eliminating the possibility of improvement or social mobility.” Some elites envisioned the slavery of poor whites in addition to blacks.

The economic and social injustices experienced by poor whites, like those of many blacks, continue today. The Appalachian subculture, to take one example, has been synonymous in the popular imagination with poverty and social dysfunction for over two centuries. This historical association — and the bias that comes with it — remains with us, meaning low-income Appalachians often attract both class- and culture-based discrimination when they leave their native region. As recently as the 1980s, a large contingent of Appalachians migrated to Cincinnati, Ohio, in search of work. Upon arrival, they faced large-scale discrimination in employment and housing.

Low-income whites share other social experiences more commonly associated with blacks and other racial minorities. David Lapp, co-founder of Braver Angels and research fellow at the Institute for Family Studies, recalls the subject of police profiling frequently coming up during his interviews of low-income white Ohioans in 2010:

[P]olice misconduct was far from our minds. Our interviews were focused on young people’s experiences in relationships. But every now and then, someone would mention their distrust of the police. In our interviews about relationships and marriage, the sentiment bubbled to the surface enough that we wondered if there was a story there.

As Lapp would later learn, low-income whites are not far behind blacks in their negative views of law enforcement. While 79% of higher-income whites have a favorable view of the police, just 56% of low-income whites say the same. In the same survey, about 40% of blacks of all income levels report having a favorable view of the police.

The gap has to do with the way police interact with low-income populations in areas known for drug dealing and other illegal activity. People who are routinely pulled over for minor infractions, subjected to searches of their vehicles, handcuffed, and otherwise bullied or intimidated by police officers — as are both blacks and low-income whites — are understandably more distrustful of law enforcement than the average American.

Familial instability, once a harbinger of socioeconomic woes in the black community, has also grown significantly in the low-income white population. When Daniel Patrick Moynihan sounded the alarm over the breakdown of the black family in 1965, unmarried births among blacks in America had reached 24%. Rates of unmarried births among whites, which were 3.1% in 1965, have reached almost 30% as of 2018 — slightly higher than the rates for blacks when Moynihan issued his paper.

These disadvantages, combined with more recent economic and technological trends, have taken a particular toll on low-income whites. Such trends have likely contributed to the “marked increase” in mortality rates among middle-aged whites that economists Anne Case and Angus Deaton uncovered in a landmark study published in 2015. They attributed this increase — confined largely to individuals with a high-school degree or less — to a rise in what they call, in their 2020 book on the topic, “deaths of despair” — those tied to drug overdoses, alcohol poisonings, chronic liver disease, and suicide. The Centers for Disease Control and Prevention recently highlighted a narrowing of the gap in life expectancy between blacks and whites from 1999 to 2013 — a welcome development, to be sure. Unfortunately, Case and Deaton found that the narrowing for Americans between ages 45 and 54 “was largely driven by increased white mortality.”

Again, the examples above are not meant to downplay the effects of racism, systemic or otherwise, on the black community, or to draw an equivalence between the experiences of blacks and whites in America. It is undeniable that blacks have borne a litany of injustices — from forced immigration to chattel slavery to Jim Crow to racial discrimination — that other groups have not had to endure. However, the examples do illustrate that despite differences in race, low-income whites and blacks often face contemporary socioeconomic disadvantages and outcomes that are similar in substance, even if they vary by degree of impact.

Looking at these problems through a racial lens tends to misallocate limited resources to minority individuals who are already socioeconomically secure and thriving while overlooking millions of people who are technically part of the racial majority but, as demonstrated above, display many of the other markers of disadvantaged populations, such as family breakdown, propensity for criminal-justice involvement, exposure to substance abuse, and others. By focusing on poverty as a racial problem while leaving aside these challenges, we leave untouched the root causes of intergenerational poverty. A race-focused policy thus ends up wasting resources while extending the cycle of poverty and social dysfunction.

A systemic-disadvantage lens, by contrast, might be able to account for many of the actual sources of disadvantage that are not encompassed by race alone.


Systemic disadvantage seeks to encapsulate the society-wide sources of intergenerational poverty: the differences in family structure, neighborhood affluence, social capital, and educational access and achievement that help determine success or failure in America. While historical racism leads to certain disadvantages falling more heavily on minorities today, legal prohibitions and race-focused policies and programs have gone as far as they can to ameliorate poverty problems. What’s left to tackle are the far stickier challenges outlined above.

The sources of systemic disadvantage are varied and complex, but one of the most fundamental is changes to family structure. The impact of family structure on socioeconomic opportunity is pervasive, and the social science supporting the connection is unambiguous. From educational achievement to substance use to teen pregnancy to criminal-justice involvement, children raised in single-parent homes are at much higher risk of negative life outcomes than those raised in two-parent families. According to Nobel laureate James Heckman and Rasmus Landersø, even in countries with extensive social-welfare programs aimed at boosting equality, family stability plays a large role in perpetuating disadvantage.

Young people make decisions based on the models they see around them. If the shared social environment of a low-income community is characterized by births to unmarried mothers, educational failure, substance use, and lack of attachment to work, these behaviors become not just de-stigmatized, but normative. A vague aspiration for achieving positive life milestones is no substitute for lived experience.

Recent findings by Harvard University economist Raj Chetty demonstrate how this community effect works. Chetty and his colleagues show that economic connectedness, specifically between individuals with a low socioeconomic status (SES) and those with a high SES, strongly influences upward income mobility. In an earlier study of the Moving to Opportunity program, these researchers found that low-SES children who grow up in counties with connections to high-SES children have 20% higher incomes as adults than low-SES children who lack such social connections. These results also show that, in general, the younger children are when they make these connections, the more likely the income effect is to occur, thus reemphasizing the importance of early intervention in lives of the disadvantaged. The impact Chetty documents on upward mobility holds true across races.

Social connection between classes is not easy to build. Broken cultural linkages and memory have to be repaired, and social capacity has to be reestablished and strengthened. This is arduous person-to-person work that involves unwinding accumulated trauma in the lives of impoverished individuals and the communities in which they live while rebuilding (or, in some cases, building for the first time) the capacity for establishing and maintaining families and functioning neighborhoods. However, there are organizations that have successfully undertaken efforts to foster positive change.

One of the few rigorously evaluated programs for improving social, physical, and educational outcomes for low-SES children is the Nurse-Family Partnership (NFP), a program that deploys registered nurses to educate and mentor pregnant and parenting low-income mothers. The NFP was built on some 30 years of longitudinal data that documented not just the positive effects of the NFP approach, but the specific types of interventions that constitute a successful, evidence-based home-visiting model. A 2005 RAND Corporation study of NFP found returns of as much as $5.70 for every $1 spent, which were generated through avoided costs in government safety-net programs. It also found that high-risk NFP families required $34,000 less in government-program expenditures than similar families that did not participate in NFP.

In recognition of NFP’s success, Congress created the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program in 2010 to expand evidence-based home-visiting models via block grants to states. When evaluated, a majority of MIECHV programs have had positive, multi-dimensional effects on children, including lower levels of child abuse, improved school readiness, and greater economic self-sufficiency for their families.

Another promising model is that adopted by Friends of the Children (FOTC), an Oregon-based non-profit organization I have occasionally consulted that works alongside the most disadvantaged children in 29 sites across the country. FOTC’s mission is to break the cycle of intergenerational poverty through a paid-professional mentoring approach. FOTC staff provide long-term mentoring to children identified in kindergarten classrooms as being at the highest risk of negative adolescent and young-adult outcomes — namely substance use, early parenting, and dropping out of high school. In effect, FOTC deliberately “reverse creams” — that is, it recruits the children with the most risk factors and highest levels of negative behaviors that tend to ripen into negative adult outcomes.

Keeping in mind this high level of disadvantage, the outcomes FOTC is achieving are remarkable. Eighty-three percent of FOTC participants earn a GED or high-school diploma, while 92% go on to enroll in post-secondary education, serve in the military, or join the workforce. Ninety-eight percent avoid early parenting. Ninety-three percent avoid the juvenile justice system.

By focusing on disadvantage rather than race, FOTC finds itself working not just with black families, but with all sorts of disadvantaged communities, including Latino, Native American, and low-income white populations, all of which present a similar profile. That’s not to say that FOTC doesn’t take race-specific problems, including the effects of overt and systemic racism, seriously: It trains its staff in culturally relevant practices to try to ensure that its programs fully account for all the types of disadvantages its children and families encounter. At the same time, it remains attentive to the reality that disadvantage is not a race-specific problem.

Low-SES adults require a different set of strategies than children, which is where organizations like Employment Mobility Pathways (EMPath) come into play. A Boston-based non-profit, EMPath seeks to address the effects of long-term disadvantage on adults through its Mobility Mentoring program, which focuses on building the non-cognitive skills of its adult clients and their families. EMPath defines mobility mentoring as “the professional practice of partnering with participants so that over time they may acquire the resources, skills, and sustained behavior changes necessary to attain and preserve their economic independence.” EMPath uses a neuroscience-informed Bridge to Self-Sufficiency framework that helps individuals identify and leverage strengths to overcome persistent challenges that interfere with self-sufficiency and socioeconomic mobility. This approach helps boost education and earnings levels among participants while helping them establish self-sufficiency goals and plans.

All three of these programs share an intense focus on getting under the hood of systemic conditions and behaviors that help generate and sustain poverty. Each program seeks to break cycles of dependency by nurturing social connection, and each leverages research, data, and the growing scientific insights into brain development as the starting points of effective anti-poverty practices. Importantly, none of these programs focuses on race as the primary driver of poverty; instead, they focus on the dignity and innate capacities of all people irrespective of race.


Systemic-disadvantage analysis is not intended to diminish the historical legacy of racism, which can and does impose sometimes deadly disadvantages that disproportionately affect racial minorities. Nor does it entail a retreat from efforts to enforce laws against racial discrimination. Racial animus, which has made a comeback in the past decade, has to be explicitly and firmly opposed in American life precisely because it is such a durable feature of human behavior. The fight against racial hatred is never over.

Rather, systemic-disadvantage analysis is an effort to reframe our policy debate to focus on poverty as it exists today, not 50 or 60 years ago. AEI’s Bruce Meyer has found that in 1960, 30.8% of the American population experienced “consumption” poverty, or the inability to procure food, housing, medicine, and other basic essentials of life. Such conditions, if they prevailed today, would mean over 100 million Americans living in stark poverty. Yet the combination of economic growth and a robust federal safety net has reduced consumption poverty to 4.5% as of 2010 — an almost 90% reduction. That is a startling achievement, as well as a testimony to the power of free enterprise and American generosity. Decades ago, our society declared war on poverty; if we have not yet vanquished it, we have certainly had it on the run.

But a different kind of poverty stalks America today, one that arises from non-economic sources. It is a poverty of the mind, heart, and spirit as refracted through family and community relationships. This poverty is the product of sustained and grinding disadvantage embedded in the circumstances of daily life that saps the capacity of individuals to engage in the critical work of forming and building relationships, families, and communities that are strong enough to care for their members when they are unable to care for themselves. It is a kind of poverty that attacks not only our material well-being, but the intrinsic and inalienable core of who we are as human beings. This poverty disorients and distorts lives in ways that make escape extremely difficult.

This erosion of dignity, like most other social challenges, is felt most intensely among the poor. But make no mistake — it affects us all. By fostering a harsher, more polarized, and more callous society, it deadens our compassion and makes life harder for everyone. And it certainly does not respect artificial distinctions between people, including race.

Remedying systemic disadvantage is not the job of one political party or economic class; it calls for solidarity across parties and classes. It offers a case for broadening the capacity of all Americans to access the opportunity our great country affords. It represents a recognition that our future is one we will either enjoy or suffer together.

The case for de-racializing poverty through a systemic-disadvantage framework is an argument for taking poverty more seriously, not less. It should serve as the starting point of a renewed effort to better target our financial and social resources to those in need, regardless of their race.