How to Solve Racial Disparity

Socioeconomic racial disparity has been making lots of headlines recently. Protests in New York and Ferguson have brought a new light to the discussion of race. I have pointed out in previous posts what caused disparity, but never offered a solution. I believe the current state of disparity is a storm of multiple policy failures, so there is no single pen swipe or new law that could do anything worth mentioning.

I think the current criminal environment is a result of policy failure causing economic distress. Thus, economic growth is the solution to solve the crime.

Changes must be first be made in education. I support a Friedman system. In short, all families would receive a voucher good for one academic year at a litany of what are currently considered public schools. You can take your voucher to any school, thus not restricting people to compulsory neighborhood schools.

If you want your child to go to a “private school”, then you would simply pay the added tuition costs. For example, if the voucher is worth $10K and the private school tuition is currently $15K, then the parents would only pay $5K. This reduces switching costs since parents will not be paying taxes for school and the entire $15K. I also support merit-based scholarships for those who qualify for a higher standard.

School choice is critical for long term success and economic growth. I believe this plan, which I have laid out in other posts, would increase competition amongst schools and result in an overall net increase in quality.

Minimum wages are a major stunt for long term economic growth, especially for low income minorities. Originally instituted to shield white labor unions from competitive black labor during the 1930s, the price floor on labor has created a gap in employment. In economic terms, the real minimum wage is zero, or unemployment.

Since it has been institutionalized for so long, the short term effects would be a rearranging of low wage earners. Many on the left fear of “slave wages” that would trap people in poverty. Current welfare programs are equally as much a poverty trap. This presents a unique opportunity to address both issues at once: alleviate government poverty traps and address concerns of starvation.

Our bloated welfare programs should be replaced with a reverse income tax. Workers with wages under X% of the poverty line would receive Y% of their income as subsidy. As you earn more, your income subsidy would decline, thus removing incentives to not advance.

One major cause of racial disparity is the destruction of family values. Single mother birth rates for blacks are over 75% in some areas. This can be attributed to the welfare state, which I have addressed, and drug prohibition.

Although it may seem counterintuitive, repealing drug prohibition would bring more long term stability to the black community. I do believe there would be some short term consequences, but this would be far less than the long term benefits.

For one, black males would no longer be jailed at astonishingly high rates, despite using drugs at about the same rate as whites. In the free market, drug sales would not be riddled with gang violence and destructive behavior, which would further reduce black incarceration over the long term.

In the current state of affairs, young blacks must choose between a job or selling drugs. For those in abject poverty, the choice is easy since selling drugs illegally is quite the lucrative business. This decision, which is the result of individuals responding to a given circumstance, conflicts with existing drug policy and begins the breakdown of family structure and high incarceration. Repealing drug prohibition would allow blacks to capitalize on the industry without being subject to gang and state violence. The same can be said for prostitution laws.

Ill-fate short term policy making will only perpetuate racial disparity. There has never been a single legislative pen swipe capable of alleviating racial disparity, as evident by any number of policies intended to that end.

Egalitarian policies meant to “help” blacks have failed to accomplish anything worth mentioning. Blacks would be better off with less government planning and more personal responsibility.

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