Accounting for Privilege

For our wedding last year, my partner McCaila and I decided to forgo traditional registry gifts and raise money for the Durham Community Land Trustees. DCLT is building a more equitable Durham by providing permanently affordable housing through rentals and home ownership. Please read up on their work, which they can explain better than I can.

What I can explain is how difficult it is for them to create equitable access to housing. McCaila and I own our house and wanted to raise money so that other neighbors could own as well. Several relatives gave a donation and then wrote us a separate check of equal (or greater) value “just for us.” Our parents donated to the registry and wrote us separate checks to help us with wedding expenses. All told, we raised $25k for DCLT, which is half the capital needed to finance development of one house. The thing is, our parents’ second checks, the ones to us, were much larger than their donation checks. Inequality compounds itself.

At the risk of appearing ungrateful, I’m going to point out that a newly married, college educated couple that owns their own home doesn’t need help paying for their wedding, not in the way that our neighbors need that money. A donation of $200 or even $500 is a generous donation — when measured against typical donations from upper middle class folks to popular causes. But that amount is wholly inadequate to allow my neighbors access to real estate. DCLT’s families are effectively outbid by families like mine. Our charity is dwarfed by our unearned wealth.

This is why it is so hard to create economic equity. Progressive liberals with big hearts will donate hundreds to worthy anti-poverty programs — while gifting thousands to their children. Most people really will take care of their friends and neighbors in a pinch — but do not happen to have friends or neighbors who are materially poor. And since affordable housing for the poor is only affordable as long as prices don’t get bid up too high, our purchasing power itself undermines our neighbors’ access to affordable rentals and home ownership. There is no rising tide to lift all boats in real estate. Equity isn’t possible unless the privileged give up a large measure of their privilege.

What would it take to create equitable access to quality housing? My experiences lead me to believe that I am the beneficiary of vast unearned resources and advantages that give me the power to displace less-resources people while increasing their rents. To create equity, the solution has to be of the same magnitude as the problem. The problem is equally that my neighbors have so little, and that I have so much.

As an exercise, I decided to start tallying my unearned wealth and financial privilege that resulted in home ownership at 30 — while many of my neighbors are still renters at 40 or 50. Counting only what I did not earn myself, and adding in what I earned because of unearned privileges, I could start to get a sense of the size of the solution to create economic equity for my neighbors.

Let’s start with childhood allowance. For about 10 years growing up I did weekly chores around the house and received a $10 weekly allowance. Many kids in my situation did the same chores without an allowance because it wasn’t in their parents budget. So, Allowance: $5200 unearned.

When I got a little older, Ihad a paper route, mowed lawns, and sold candy bars to fund my millionaire dreams. These are opportunities that are open to many children to some degree, maybe just not to the degree available to me. This is because I grew up in suburban Massachusetts where the lawns were large and neighbors easily earned in the top 20% of US household incomes, and their affluence made it easier for me to sell newspapers and candy. So, I’ll prorate my actual earnings by the difference between median US income and income in my neighborhood, a 5/8th multiplier, and call the remaining 3/8 unearned privilege. Self-employment =$11000. $4100 unearned, $6900 earned.

I consistently worked during high school, first at a local supermarket, then as a camp counselor and lifeguard. Being very generous with myself, I will say that earned all this money with my own hard work. $8000 earned.

Then I went to college and continued to work as a counselor and lifeguard (and research assistant) during the summers and winter break. $9000 earned.

So, by my calculations, by the time I graduated college, I had about $24,000 in earnings and $8000 unearned economic privilege. Accounting for investment earnings on unearned assets (I bought my first mutual fund at 8 years old) call it $9000. Considering that I graduated college with about $15000 in saving, plus owning a car, all that basically checks.

My car. That’s how i got too and from work and school. That’s how I got to summer college classes to graduate with a dual degree in 4 years. How does my car fit into privilege?

In one telling, I bought the car my junior year with earnings from my candy business. $3300 cash. In another telling, my dad paid for the tax, title and registration ($400 unearned) and then paid for the insurance all through high school and college ($10,000 unearned). We bought the car after I totaled an old family car in an accident, which explains why my insurance was so high. But having the car paid off and having insurance allowed me to focus on school and work. And focus I did: I graduated first in my class in high school and college. Debt free, because my parents also paid for my tuition, room, and board for 4 years ($110,000 after an equal amount in scholarships). Accounting for the interest I would have paid on the loans if I financed it myself, that’s $147,000 from my parents. Tuition + car expenses = $157,400 unearned.

At age 22, I had (at least) $166k in unearned asset privilege, while having earned just $24k. A portion my earned assets was only possible because of the unearned assets. And that was about 9 years ago. In the interim, my parents have written me checks for moving expenses, buying furniture, Christmas & my birthday, my wedding, etc. I can think of $13,000 in these “little gifts” off the top of my head. Over these 8 years, I earned $420,000 in wages, saved and invested about $80,000 of it, and “earned” another $50,000 in investment returns — investments that were only possible because I wasn’t paying for student loans and loan interest — that is, unearned. $420k earned, $63k unearned.

Which brings us to when I purchased a house with my wife a few days after my 30th birthday. $444k earned, $229k unearned. At this point, I had a total of $190k in savings, investments, and retirement funds. Which means, over the course of 8 years living on my own, I actually had less wealth than just a limited estimate of my unearned assets. I’ve always thought I was good with money, but I’m in the red, and everything I have left at the moment is unearned. Damn. I didn’t even pro-rate my wages by the racial and gender wage gap, I didn’t account for 6 of my 7 jobs being hired and managed and given performance reviews and raises by a white man. I didn’t account for the fact that a “median” working teenager contributes to his family’s finances rather than receiving. I didn’t account for the educational resources my parents gave me so that I could earn another $100k in scholarships over 4 years. I didn’t account for graduation presents or the $1000s in rewards I’ve “earned” on my credit cards — rewards that are paid for in part by bank fees on low income families. What separates me from my neighbors, currently renting sub-standard houses and not having the privilege to fix up and own, is at the very least $229k in unearned wealth, assets, and privilege. At most, well, i can’t begin to account for what I have that’s unearned. But, if I want to live in an economically equitable society, at a minimum, I have $229k to contribute to less economically privileged people. Considering this sum an endowment earning 7% interest per year, I owe $16k year, at minimum, indefinitely.

I donate to worthy causes all the time. $100 here and there. Last year, McCaila and I had combined donations of $14,000, mostly to DCLT and mostly giving away the money that was given to us. So, I’ve never transferred anywhere near the amount of money needed to create economic equity in my corner of the globe.

How much do you give? How much do you owe?