So, we have been thinking about this one for a while, and it has driven us crazy here at Blackeconomics.com. There is a need for a measure (and index) of the long-term, economic structural bias in society against Black people and Black economic achievement. The index could be used to discuss the long-term effects of racial bias in society on Black economic outcomes in the United States.
During the period from 1865 to 1910, Black people were mostly farmers and domestic servants. But we were also small business owners and craftsmen. Then, in 1910 to 1930, during the first wave of the Great Migration, African Americans moved North to work in factories as the industrial economy expanded. During early 20th century, we worked service jobs, farmed the land, bought homes and survived. It was a period of lynchings and racial terrorism. But we still raised kids and gave them an education in life.
So in 2025, looking back, it is hard to explain or relate to just how bad things were for Black people and people in general during the late 19th century and early 20th century when discussing economics with people. We want to explain how limited Black economic prosperity was during the 19th and early 20th century. When people got up before dawn to work 6 days a week and didn’t have cellphones. My mom told stories of eating “grass” sandwiches during the depression.
We need a measure of economic bias against African Americans in society
In order to measure the gains of Blacks in the US, we have to look at how far we have come. We need a measure of how far away or how close african americans have come to realizing the American dream.
In many of our discussions and analyses, we need a log-term economic structural bias rate (a discount rate) to adjust for Black economic achievement. We need an economic measure that holds up from 1865 to 2025. It has to describe how bad times were economically during reconstruction and the Jim Crow era, but also capture the gains and improvements from the civil rights era and the post-Reagan era.
Such a rate is inherently utopian. What would black economic progress look like if Reconstruction had succeeded? What if there was no backlash to reconstruction? What if discrimination against Black people and women had ended during the 1920s? What if people could vote? What if there was no discrimination against Irish immigrants or Jewish people? It is close to impossible to imagine, and yet we must make the calculation.
During our analysis of missing black doctors, it would have been easier to take the African American population at the time and simply multiply it by the structural economic bias rate to calculate the missing Black doctors. What if we could apply the discount rate to black wealth creation? Black business creation? Sadly, no index exists.
Possible Variables to use in calculating the Black Bias Discount Rate
We currently don’t have the bandwidth / capacity to gather the data right now. But we have long thought about some of the variables we might consider including are:
Black employment and wages
Black employment. Employment compared to population
Black doctors, nurses and teacher employment
Wages and wage discrimination historically. Yikes
Black Wealth Measures
Black income and Black wealth
Black housing ownership and Black land ownership
Black poverty
Black millionaires over time
*** Chance of getting a home mortgage. chance of getting a farm loan by year
Black political power Measures
Black voting, Mayors, representatives. Total numbers, budgets controlled, black workforce, black contracts
Black businesses
Black business formation, by sector and industry. Black entrepreneur with employees greater than one.
Black education
Black literacy rates
Black high school and college graduation rates
Black crime rates
Discrimination Measures
Black lynchings and racial terrorism
Housing discrimination. Racial segregation.
Employment discrimination
Discrimination against immigrants like the Irish
Opportunity
Opportunity over time. This one is crazy. And close to impossible to measure. Could I start a business? Could I become a doctor? How hard was it? How were my chances in 1920 versus 1970? This one might a measure of the other variables. Check Raj Chetty and Shapiro’s research.
Black instituions and networks. Black fraternaties.
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Discussion
Constructing such an index of long-term economic bias is beyond our current capabilities. The index requires the work of multiple economists at the MS thesis level or a PH.d dissertation. However, there is some good news. The reparations movement in California and elsewhere has started down this path. In addition, Darity and others, have done some work but mostly focused on housing as a key wealth builder. We need a similar triste on Black employment and labor.
Note: In 2025, in the “Great Debate”, Booker T Washington vs. W.E.B Du Bois, We are currently on the side of Du Bois. You must secure political power to protect economic power. But during 1980s to 2010s, we thought that in a “stable” political environment, given guaranteed political rights, you needed Black economic power.
Now, in the trump era, the pendulum has swung back. You need basic political power to guarantee economic power. That is the philosophy of Booker T Washington. Funny how things change in the current political environment.
Why the Black poverty rate is important
So basically, we give up. We cop out. We will use the US Black poverty rate as our measure. We use the Black poverty rate for several reasons.
One, the Black poverty rate captures a lot of other important variables: unemployment, income, and wealth. And income is a proxy for education. Poverty is also a measure of opportunity in society to earn a decent income.
Two, the poverty rate also represents how America is treating it’s citizens in a broader way.
In lieu of an actual calculation, we are going to use the US Black poverty rate as our measure of discrimination in US society. Black poverty is the best “quick proxy” for the long-term economic structural bias in US society against African Americans in US society. The measure is publicly available.
Summary
We are going to use the Black poverty rate as our key measure of Black economic injustice. We will also consider the Black unemployment rate and the Black wealth rate as our long-term measures of long-term economic structural bias in US society. We don’t really have anything better.
Research note: How far back does each series go?
Version 4.0