Abstract
While concern over social inequality is a deeply embedded aspect of sociology, wealth inequality is too often overlooked. As Thomas Shapiro contends in Toxic Inequality, a “pre-occupation with income” has perpetuated a lack of understanding of the role of wealth in social inequality (pp. 12–13). This book makes an important contribution to the growing scholarly literature and public awareness of the role of wealth in structuring social inequality and works usefully for teaching about wealth inequality (Baradaran 2017; Chetty 2018; Desmond 2017).
Income may be the most visible form of financial inequality, but wealth inequality profoundly shapes circumstances in which people live. In an increasingly unstable labor market, with stagnant wages and rising costs of living, the ability of a family to pass on wealth to the next generation becomes an increasingly salient indicator of that family’s social class position (Ehrenreich 1989; Linkon and Russo 2018). At a time when even students at a relatively affordable state university like ours take on student loan debt to attend college, inequality of wealth (and debt) are even more immediate issues.
Shapiro foregrounds wealth inequality and explains how wealth inequality emerges, how it intersects with racial inequality, and how it comes to be, as he describes it, toxic. Shapiro explains that he uses the phrase “toxic inequality” to refer to what he describes as “a powerful and unprecedented convergence: historic and rising levels of wealth and income inequality in an era of stalled mobility, intersecting with a widening racial wealth gap, all against the backdrop of changing racial and ethnic demographics” (p. 18). Shapiro describes how wealth-building is a pivotal component of the American Dream and how wealth is a resource that those with access to it can draw on to take opportunities, improve their chances for social mobility, and withstand financial hardship. He explains, “Beyond providing a safety net, wealth also allows people to improve their education and skills, buy a home, invest, start a business, and help other family members through tough times or to get ahead” (p. 33). The problem, of course, is that Americans have unequal opportunities to secure wealth.
The book challenges readers to reconsider how wealth structures overall inequality. For example, Shapiro explains that access to the kind of wealth that allows one to make a down payment on a modest home, attend two years at a community college, or start a business—about $14,000—is vastly unequal. Less than half (46 percent) of all US families and only about one in five African American and Latino families have adequate financial wealth for these kinds of mobility opportunities. (P. 33)
Putting the sociological imagination into practice, Shapiro delineates how slavery, Jim Crow laws, and discriminatory housing policies and lending practices combined with unequal treatment in the labor market have resulted in not just differential earnings patterns but also the accumulation of substantial, structural, racial wealth gaps. As Ms. Washington wrote in a summary of Toxic Inequality in a class paper, “Our history shaped who holds the most wealth, how they hold the most wealth, and why they hold the most wealth.”
The book is organized with an introduction, six chapters, and a brief methodological appendix. In the introduction, Shapiro introduces readers to several individuals and families whose circumstances are shared throughout the book. As Shapiro explains in the appendix, the first-person stories come from the Leveraging Mobility Study, which gathered interviews with families in various neighborhoods in the metropolitan areas of Boston, St. Louis, and Los Angeles, representing both white and black and both middle- and lower-income communities. Their stories are used to illuminate how the wealth gap structures overall social inequality and disadvantages many hardworking Americans, bringing Shapiro’s structural arguments into more immediate relief. For example, in the first chapter, Shapiro shares a story about Cindy and Keneysha Breslin, a mother and daughter, and how they are trying to save funds while working maintenance jobs, navigating welfare policies and social assistance programs, and cutting back on food.
In chapter 2, Shapiro discusses how the idea of the American Dream is rooted in home and community, and how class and race inequalities in homeownership exaggerate financial and social inequality. As he reveals, “The adage ‘wealth begets wealth’ is institutionally rooted in neighborhoods and housing markets for middle-class families” (p. 57). In chapter 3, Shapiro distinguishes between jobs through which people earn an income and jobs that “offer much more,” or those that build and preserve wealth (p. 89). Readers are able to see how increasingly prevalent low-wage, unstable jobs frustrate efforts at social mobility and wealth accumulation, including by having little to no paid leave, health care, or other benefits, like retirement plans. We read about Allison and David Ackerman, who managed to build wealth despite temporary unemployment, largely as a result of their accumulation of workplace-based retirement savings. Their account is contrasted with that of India and Elija Medina, who despite similar skill sets and gradually increasing incomes, were unable to accumulate similar wealth because of lower employer contributions to health insurance coverage and retirement accounts.
Chapter 4’s focus is on the inheritance advantage. Shapiro explains how the passing of wealth from one generation to the next provides some with “unearned advantages” and exacerbates racial inequalities in wealth accumulation (p. 123). Inheritance is not just for the elite but is quite common among those families able to secure at least some wealth. As Shapiro reports, “sixty-seven of the ninety-four home-owning families we spoke with between 2010 and 2012 had received family financial assistances in making the down payments on their homes” (p. 124). Shapiro underscores how the racial wealth gap is rooted in America’s history of racial inequality and connects the Jim Crow era to ongoing inequalities in homeownership and family wealth. He pointedly notes that “the legacies of residential segregation lived on in the wealth” that some families hold (p. 128).
Chapter 5 illustrates how government policy often supports those with wealth while disadvantaging those without, and that toxic inequality is not inevitable because it is driven by public policy choices. Explaining a wide variety of taxes, subsidies, and other policies, ranging from the Homestead Act of 1862 to social security, Shapiro zooms in on public investment in home ownership, noting that “one set of estimates calculated that the top 10 percent of taxpayers reaped 86 percent of the total distributed through the mortgage interest deduction” (p. 164). In chapter 6, Shapiro concludes with strategies for reform and reduction of toxic inequality. He grounds the possibilities of moving toward equity in two principles: wealth-building and racial justice.
Just as Green (2018) noted that Desmond’s (2016) methodological appendix in Evicted can be usefully studied in methodology classes, Shapiro’s brief methodological appendix describing the Leveraging Mobility Study, on which Toxic Inequality is based, could also be incorporated in an upper-level undergraduate or graduate-level course. This appendix details how the family interviews were collected by recruiting through day care facilities in communities with particular demographic characteristics in Boston, St. Louis, and Los Angeles. Students can reflect on the recruitment techniques, diversity of the families’ circumstances, and the results of the follow-up interviews gathered during the Great Recession.
As a professor and a student, we worked with Toxic Inequality in a 200-level Social Inequality class and found it to be a useful resource and accessible, engaging, and informative for students. Because of the book’s accessible style, engaging personal stories, and efficient summary of Shapiro’s substantial underlying research, we think this book would work well in a wide range of classes concerned with various forms of social inequality, from introductory- to upper-level classes in sociology to classes across other disciplines.
In your teaching, a great resource to pair with this book would be the episode “The Racial Wealth Gap” of Vox’s (2018) Explained series on Netflix. The episode illustrates many of the same structural mechanisms that contributed to the racial wealth gap and, among other engaging things, features senator Cory Booker recounting a story of how his family overcame housing discrimination. The episode also includes discussion of these issues from Mehrsa Baradaran (author of The Color of Money: Black Banks and the Racial Wealth Gap) as well as Shapiro. This book would also pair well with Desmond’s (2016) Evicted and/or his 2017 essay in The New York Times Magazine, “How Homeownership Became the Engine of American Inequality.” Toxic Inequality could be usefully combined with many TRAILS resources, but Brooks’s (2014) “Exploring Home Ownership, Residential Segregation, and the Growing Racial Wealth Gap” aligns particularly well as that resource has students engage with other materials and write a paper “summarizing the practices and policies” that have contributed to housing inequality, segregation, and the racial wealth gap.
Shapiro’s Toxic Inequality offers an accessible and informative perspective that refocuses discussion of social inequality on the important structural role of wealth (and debt) in shaping social inequality and along the way offers meaningful strategies for detoxification.