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What is Systemic Racism?

With the recent explosion of the Black Lives Matter movement across the world, the phrase ‘Systemic Racism’ has been used repeatedly in protests, speeches, Instagram posts and tweets. But what is systemic racism and why is it important for us to understand its reality?


Systemic/Institutional Racism, in short, is the racism that exists within and influences social, political and legal institutions, across government and private bodies. In a subtle way, the inequalities in the system continue to victimize People of Colour (PoC) – especially Black communities. A key result of this is that these communities remain trapped in the circles of poverty and violence.


To quote sociologist Eduardo Bonilla-Silva “The main problem nowadays is not the folks with the hood [referring to the KKK], but the folks dressed in suits”.


This article explores three main areas of systemic racism against Black people in America, that is rooted in their dehumanization and forced disempowerment.


Housing Segregation:


Government policies and the prejudice of homeowners and real estate agents have led to the modern-day segregation of African-Americans into neighbourhoods of lower economic value.


In the 1930s, the U.S. Federal Housing Administration (FHA), along with the Home Owner’s Loan Coalition (HOLC) started the process of redlining. This was where they would colour code residential maps in order to help the government decide which neighbourhoods would make good investments. Predominantly African-American neighbourhoods would be coded red, and described as having an ‘undesirable population’, making it harder for these communities to obtain mortgages, as their neighbourhoods would not be eligible for FHA backing.  Neighbourhoods that were coded red and yellow continue to be underdeveloped to this day.


The government also built segregated housing in the 1930s and blocked African-Americans from the new suburbs and new forms of mortgages even after the housing boom post WW2. This meant that many Black communities were trapped in poorly designed housing that were poorly maintained by the government. Even today Black people in America are shown fewer homes by realtors than White people, and gentrification acts as 21st century segregation. This is where there is increased investment in historically disinvested neighbourhoods, as they are more relatively affordable, and cities have been revitalising these neighbourhoods to attract more investment. While this sounds positive, it leads to the physical displacement of primarily Black communities who are pushed out by wealthier White investors, and cultural displacement. Instead, cities should financially invest in these Black communities that have been historically disinvested in and ensure that they are not displaced as a result of revitalisation schemes.


As a result of all these racist policies, the average African-American household was only worth $17,000 in 2016, while the average White household was worth 10 times that. These policies and government institutions have purposely withheld access to wealth and housing to Black communities. This creates a vicious cycle where Black people, who have historically been restricted to all-Black housing areas of lower value continue to be denied loans and mortgages because of resulting poverty and low house value. This leaves them trapped in the poor areas that are often plagued by poorly funded schools and public institutions.


Access to Education and Employment:


Black children are more likely to attend under-resourced schools, because most schools rely on local property taxes for funding. Due to housing segregation, housing values in Black neighbourhoods are much lower, leading to less funding for schools. This lack of access to high-quality schools leads to a lack of access to high-quality universities and jobs. Therefore, housing segregation not only reduces wealth, but also income-generating opportunities.


Once Black students overcome these challenges and achieve a university degree, they are still twice as likely to be unemployed as all other graduates. This can be explained by the race discrimination during the hiring process. For example, a recent study found that job applicants with White-sounding names would get called back 50% more times than applicants with Black-sounding names, even when their CVs are similar. This may be because of untrue stereotypes, such as that Black people are lazier, less professional etc., which have been built up by society to keep them economically disempowered. These stereotypes also mean that Black graduates are less likely to get higher paying jobs, causing a wage gap between White and Black Americans.


Injustice in the Criminal Justice System:


Recent protests and videos have brought to light the double standards that are rife in the American justice system.


One of the clearest examples of this is the fact that African-Americans make up 40% of the prison population even though they only constitute 13% of the country’s population. This is because they are more likely to be stopped and searched (30% more likely to be pulled over by the police) and are 20% more likely to be convicted and receive 20.4% longer sentences for the same crimes. Black people are easily convicted and receive long sentences even for minor offenses, while many White criminals are released for major offenses. Higher conviction rates may be because of implicit biases in predominantly White jury and judges, and Black people may get stopped and searched more because of biases within the police force, where a Black man is automatically considered more dangerous. These biases emerge from the consistent dehumanizing of Black people by society, from the times of slavery when they were reduced to property, to now when Black people are forced into boxes, such as ‘thugs’, ‘criminals’ etc. This is a clear demonstration of racism embedded into a system that is supposed to uphold justice.


Unchecked police brutality is another symptom of a racist criminal justice system. Too many police officers have killed unarmed Black Americans, and too many families continue to grieve without justice.


The increased incarceration of Black Americans serves to disempower them even after they are released. A criminal record can reduce the likelihood of a call-back by nearly 50%. This negative impact is apparently twice as large for African-American applicants, according to the NAACP, serving to further reduce employment opportunities for African-Americans. Secondly, released convicts do not have the right to vote. Therefore, the unjust increased imprisonment of Black people leads to their disenfranchisement. Disenfranchisement is not only limited to the effects of the criminal justice system: studies report that African-American voters are 4 times as likely to report difficulties voting than White people.


Our role:


Although this article focuses on systemic racism in America, systemic racism exists globally in similar institutions. As future economists and businesspeople it is important for us to be aware of the reality of systemic racism when creating national and business-level policies. Only when we understand how PoC, and Black people in particular, are disempowered by systemic racism, can we use our platforms and positions to empower them, financially invest in them, and begin dismantling these systems and institutions.

“Not everything that is faced can be changed, but nothing can be changed until it is faced” – James Baldwin.


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