Institutionalized Racism

A Short History

Although with the passage of the Civil Rights Act in 1964 and the Civil Rights Act of 1968 (the Fair Housing Act), legal forms of racism were abolished, it didn’t end racism in the United States. David T. Wellman (1993, p. 20) defines racism as “Culturally sanctioned beliefs which, regardless of intentions involved, defend the advantages whites have because of the subordinated position of racial minorities.” When a system of power is in place, often those who benefit consciously and unconsciously find ways to keep that system in place.

The Emancipation Proclamation was issued by President Abraham Lincoln on January 1, 1863, but slavery was not legally and fully abolished in the entire United States until the 13th Amendment was ratified almost 3 years later, on December 6, 1865. Backlash and resistance resulted in Lincoln’s assassination and in the creation of what became Jim Crow laws and practices, which denied freed slaves anything approaching equal rights. Segregation, denial of voting rights, and intimidation kept blacks in much the same subordinate place they experienced as slaves (Brown, 2017; Blakemore, 2020).

The Supreme Court’s ruling in Brown vs Board of Education in 1954 declared racial segregation in public schools unconstitutional. In practice, many Southern states delayed for years in desegregating their schools. Some districts closed public schools rather than have to integrate black students. Meaningful large-scale desegregation did not begin until the Civil Rights Act of 1964 gave the federal government enforcement power by threatening to cut off federal funds to segregated districts. Even then, by 1968 (14 years later), only about a third of Black students in the South attended schools with white students. Full compliance never really happened—today, many schools remain highly segregated due to housing and district lines.

How Different Systems Work Together to Support Racism

Professor Tricia Rose (2016, 2024) has identified five social institutions that produce and keep racial inequality going, either intentionally or unintentionally. These can be imagined as “gears” that influence each other and work together to maintain the status quo. These are Housing, Education, Criminal Justice, Mass Media, and Wealth.

These institutions work together seamlessly to maintain the subordinate position of people of color. Housing disparity leads to low taxes, which leads to poor schooling, which leads to low education and dropouts, and blacks entering the criminal justice system. Because of the media and prejudice, they receive longer sentences and can’t get jobs when they’re finally released, which leads to poor communities, which leads to housing disparities.

Disparities

Wealth

Using the Federal Reserve’s 2022 Survey of Consumer Finances (SCF), the median (typical) family’s net worth in 2022 was about $285,000 for White families, $44,900 for Black families, and $61,600 for Hispanic families — meaning the median Black family had only about 15% of the wealth of the median White family in 2022 (Aladangady & Ciarli, 2023).

Persisting labor-market inequalities (pay gaps, occupational segregation, employment stability) reduce the ability of Black and Hispanic families to save and invest. Many federal tax expenditures and housing subsidies disproportionately benefit those who already own assets (disproportionately White households), which reinforces wealth concentration. (Urban Institute, 2024) Because Black and Hispanic families hold less liquid savings and less diversified asset portfolios, they are more likely to suffer lasting setbacks from recessions, health crises, or job loss. The pandemic and related stock-market rebound illustrated how asset composition affects who benefits from recoveries (Perry et al, 2024).

Housing

Homeownership is the single largest source of household wealth for most families. Historical policies (redlining, racially restrictive covenants, discriminatory lending, appraisal bias) and contemporary disparities in home values and homeownership rates have limited Black and Hispanic families’ ability to accumulate housing wealth (Perry Donoghoe, & Fields, 2024).

For decades, the Federal Housing Authority wouldn’t grant mortgage loans to people of color. They ranked all the neighborhoods in the country according to their loan eligibility, and black neighborhoods were marked red and assigned the lowest grade. Banks took up this rating system along with other institutions, which denied home and business loans to people of color. This was called redlining, and although it’s now illegal, the damage is still being felt today.

Blacks couldn’t get loans to buy property in their neighborhoods. White real estate owners held all the deeds. They were known as “blockbusters”. This is what created ghettos and generational poverty.

Education

Lower property values and the lack of thriving businesses meant that local taxes from these communities were very low. Investigations and analyses find that Black-owned homes are systematically undervalued by appraisers. Estimates frequently cited in policy pieces indicate that if the owner is perceived as a person of color, their property is valued 21–23% less than if the same house is perceived as being owned by a White person. This reduces sale proceeds and long-term home-equity growth for Black owners while assessments still produce higher tax burdens in many places (Perry, Donoghoe, & Fields, 2023).

Because U.S. public schools rely heavily on local property tax revenue, differences in local property wealth (values × tax rates) create large and persistent per-pupil funding gaps between predominantly White, wealthier districts and districts that serve majority students of color. (The Education Trust, 2022) This explains the poor quality of education available to people of color, with larger class sizes, less qualified teachers, higher turnover, as well as the inability to offer elective things like kindergarten and upper-level AP classes.

Black students are suspended from school at about twice the rate of White or Hispanic students. (Child Trends, 2019) In preschool, Black children are disproportionately represented among those receiving multiple out-of-school suspensions. For instance, for SY 2011-12, Black preschoolers accounted for 48% of preschool children receiving more than one out-of-school suspension, while they made up only 18% of preschool enrollment (Civil Rights Data Collection, 2019).

Expulsions also show sharp disparities. Black students are 13 times more likely to be expelled compared to White students. In older data (2007) from NCES, about 13% of Black students had been expelled at some point, compared to about 1% of White students and 3% of Hispanic students. Black students also tend to receive longer suspension durations than White or Hispanic peers for the same types of infractions in many settings (Brookings Institution, 2021).

Criminal Justice

Racial disparities occur throughout every stage of the U.S. criminal legal system, policing, charging and prosecution, plea bargaining, sentencing, and post-conviction consequences, producing dramatically different life outcomes for people of color compared with White people. Black and Hispanic people are arrested, charged, prosecuted, and incarcerated at far higher rates than their shares of the population would predict. They commonly receive harsher outcomes than White defendants. These gaps are not explained solely by differences in offending. Research repeatedly finds racial disparities after controlling for the type of offense, criminal history, and other case attributes, which points to the role of discretionary decisions. Authorities have wide discretion in choosing who to stop and search, what charges to bring, and in the negotiations for plea offers. Structural policies, such as sentencing laws and mandatory minimums, also create unequal outcomes (Prison Policy Initiative, 2023; Vera Institute of Justice, 2012).

Policing and arrest rates

Black Americans are stopped, searched, and arrested at notably higher rates than White Americans. For example, aggregated arrest-rate comparisons show Black residents often experience arrest rates that double those of Whites on a per-100,000 basis. (Prison Policy Initiative, 2023). These differences are especially stark for drug-related offenses. Black people are far more likely to be arrested for drug possession, despite similar rates of drug use across races, and despite the fact that rates of drug use across races are very consistent. Black people are roughly 3.5–4 times as likely to be arrested for possession of marijuana as White people, even where use rates are similar (ACLU, n.d.). Such disparities in stops and arrests feed disparities later in the system because arrests are the gatekeepers for prosecution (The Sentencing Project, 2023).

Prosecution and charging decisions

Prosecutors exercise enormous discretion at multiple decision points (whether to charge, what charges to bring, whether to offer diversion or a plea deal, and what sentence to recommend). Prosecutorial practices contribute to racial disparities. In many jurisdictions, Black and Latino defendants are more likely to be detained at arraignment, less likely to receive diversion, more likely to receive bad plea offers, and more likely to be incarcerated than otherwise similar White defendants. While results vary by office and offense, the overall pattern in the empirical literature is clear: prosecution decisions are an important mechanism through which racial disparities occur and are increased (Kutateladze et al., 2014; Vera Institute of Justice, 2012).

Sentencing disparities and term lengths

Racial differences persist even after conviction. At the federal level, the U.S. Sentencing Commission (2023) reported that—controlling for many legally relevant factors, Black male offenders received sentences about 13.4% longer than White male offenders (with Hispanic males also receiving longer sentences than White males). Similar patterns of lengthier sentences for Black and Hispanic people appear in numerous state-level studies and in research on specific offense categories, especially drug offenses. These sentencing disparities, multiplied across millions of cases, drive large differences in time served and long-term collateral consequences (U.S. Sentencing Commission, 2023).

The “War on Drugs” and its racialized effects

Policy choices since the 1970s and 1980s, collectively labeled the “war on drugs”—produced laws and enforcement practices that disproportionately targeted communities of color. Mandatory minimums, harsher penalties for certain drug formulations, expansive policing in low-income urban neighborhoods, and collateral events, like housing evictions for drug-related activity, all contributed to the rapid racialized growth of incarceration. An example of this is that penalties for crack cocaine, prevalent with Blacks and people of color, were 100 times more severe than penalties for cocaine, which was mostly used by White individuals, although the effects and dangers of both are equal. Michelle Alexander, in her book The New Jim Crow  (2010), argues that the war on drugs functioned as a system that, regardless of stated intentions, was really designed to continue the social and political control over Black communities that Jim Crow laws and practices accomplished after the end of legalized slavery. Other empirical work shows the disproportionate number of drug arrests and drug-related incarcerations among Black people despite comparable drug use rates (ACLU, n.d.; The Sentencing Project, 2023).

Multiple episodes, expulsions from society, and collateral consequences

Beyond time in custody, system involvement produces cascading effects. When individuals are arrested and incarcerated, the loss of employment, housing instability, exclusion from voting through felony disenfranchisement, and decreased wealth accumulation follow them for life.

Disparities are not limited to single events. Black and Latino people are more likely to experience repeated contact with the system—multiple arrests, recurring prosecutions, and longer cumulative incarceration—which compounds harms across the life course. These collateral consequences reinforce and reproduce racial inequality across generations. National datasets consistently document that people of color account for a disproportionately large share of those serving long or life-term sentences and of those subject to collateral legal disabilities (Prison Policy Initiative, 2023; The Sentencing Project, 2023).

References

1. Aladangady, A., Ciarli, T., & (or just use the corporate author if required) Board of Governors of the Federal Reserve System. (2023, October 18). Greater wealth, greater uncertainty: Changes in racial inequality in the Survey of Consumer Finances. Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/econres/notes/feds-notes/greater-wealth-greater-uncertainty-changes-in-racial-inequality-in-the-survey-of-consumer-finances-20231018.htm
2. American Civil Liberties Union. (n.d.). End the war on drugs. https://www.aclu.org/end-the-war-on-drugs
3. Blakemore, E. (2020, February 5). Jim Crow laws created ‘slavery by another name’. National Geographic. https://www.nationalgeographic.com/history/article/jim-crow-laws-created-slavery-another-name/
4. Brookings Institution. (2021). Racial disparities in school suspensions. https://www.brookings.edu/articles/racial-disparities-in-school-suspensions/
5. Brown, C. C. (2017). The Road to Jim Crow. Maryland Center for History and Culture/Johns Hopkins University Press.
6. Child Trends. (2019, March). Situations remain: Schools report fewer out-of-school suspensions, but gaps by race and disability persist. https://www.childtrends.org/publications/schools-report-fewer-out-of-school-suspensions-but-gaps-by-race-and-disability-persistCivil Rights Data Collection, U.S. Department of Education. (2014). School Discipline. https://www2.ed.gov/about/offices/list/ocr/docs/crdc-school-discipline.pdf
7. Kutateladze, B. L., Andiloro, N. R., Johnson, B. D., & Spohn, C. C. (2014). Cumulative disadvantage: Examining racial and ethnic disparity in prosecution and sentencing. Criminology, 52(3), 514–551. https://doi.org/10.1111/1745-9125.12047
8. Perry, A. M., Stephens, H., & Donoghoe, M. (2024, January 9). Black wealth is increasing, but so is the racial wealth gap. Brookings Institution. https://www.brookings.edu/articles/black-wealth-is-increasing-but-so-is-the-racial-wealth-gap/
9. Rose, T. (2016, January 29). How structural racism works [Lecture]. Center for the Study of Race and Ethnicity in America, Brown University / UCLA Department of African American Studies. Retrieved from https://afam.ucla.edu/event/structural-racism-works-tricia-rose/ afam.ucla.edu
10. Rose, T. (2024). Metaracism: How systemic racism devastates Black lives—and how we break free. Basic Books.
11. Sawyer, W., & Wagner, P. (2023, March 14). Mass incarceration: The whole pie 2023. Prison Policy Initiative. https://www.prisonpolicy.org/reports/pie2023.html
12. The Education Trust. (2022). Equal is not good enough: School funding inequities that shortchange students of color and boost affluent schools. The Education Trust. https://edtrust.org/resource/equal-is-not-good-enough/
13. Urban Institute. (2024). Nine charts about wealth inequality in America. Urban Institute. https://apps.urban.org/features/wealth-inequality-charts/
14. U.S. Department of Education, Office for Civil Rights. (2016). 2013–14 civil rights data collection: A first look. https://ocrdata.ed.gov
15. U.S. Department of Housing and Urban Development. (2020). History of fair housing. https://www.hud.gov/program_offices/fair_housing_equal_opp/aboutfheo/history
16. Vera Institute of Justice. (2012). Do race and ethnicity matter in prosecution? A review of empirical studies. https://www.vera.org/publications/do-race-and-ethnicity-matter-in-prosecution-a-review-of-empirical-studies
17. Wellman, D. T. (1993). Portraits of White Racism (2nd ed.). Cambridge University Press.