Melvin L. Oliver, Ph.D., joined the Ford Foundation in 1996 as vice president for asset building and community development. He also holds academic appointments as a professor at the University of California, Los Angeles, and director of the university’s Center for the Study of Urban Poverty. He recently spoke with National Housing Institute President John Atlas and Shelterforce Editor Harold Simon about the foundation’s community development work and the recent book he co-authored with Thomas M. Shapiro, Black Wealth/ White Wealth, a New Perspective on Racial Inequality.
John Atlas: Let’s start with your early experiences. Where did you grow up?
Melvin Oliver: I was born in Pittsburgh, Pennsylvania, a baby boomer in 1950. My parents moved to Cleveland when I was four, and that’s where I grew up. I went off to college in the midwest, Iowa, to a small, liberal arts, Quaker-affiliated school called William Penn College. I really got a different world view in a rural area. Then I did my graduate work at Washington University in St. Louis, Missouri. My first job was at the University of California, Los Angeles, where I stayed for 17 years.
Atlas: You have a family?
Oliver: My wife Suzanne is a second year student specializing in work with the elderly and social policy in Fordham University’s social work program. My two step-sons, David and Brian, are in law school.
Atlas: How did your parents influence you?
Oliver: My parents were a major influence. My father was a working class guy who learned a skill, auto body repair, at age 11 and did that his whole life – had a seventh grade education. He was always working for someone, always working. My mother had a ninth grade education and was a day worker, essentially, cleaning people’s homes, baby-sitting. So I made a giant move from my family of origin in terms of social mobility.
Atlas: Brothers and sisters?
Oliver: I have a sister who was raised in the South, and I was raised by my mother and father in the North. My parents were very high on education, even though neither one had it. I only had one mantra growing up, “you’re going to college,” whether I wanted to or not. My father was a minister who never had his own church, and I was deeply immersed in Baptist community life, which is where I got a great deal of my sense of values and my “Protestant” work ethic. When I was about 11 years old, I was called into service – my father was superintendent of the Sunday school – to teach the five and six years olds. That’s where I think I got my love of teaching, the only thing I ever wanted to do, which I had the opportunity to do as a university professor.
Atlas: What kind of neighborhood did you grow up in?
Oliver: I grew up in three different places I can really think of as neighborhoods. The first had an extraordinary group of young kids. At that age, from about six to twelve, the most important things in life were baseball, football, basketball. This group would get up every day in the summer and think about how to find a baseball field.
Atlas: What was the ethnic makeup of these friends?
Oliver: All black. I grew up in an all black neighborhood.
Atlas: Were your close friends imbued with the idea that they were going to college?
Oliver: Practically all of us ended up going to college. Many have ended up in very interesting careers geared toward helping our communities. One of the people in this group, Greg Watson, is the head of Dudley Street Neighborhood Initiative now.
We stayed in touch with many of those people. I moved to another, much more upwardly mobile neighborhood. That neighborhood is very interesting, because it had a street-to-street character.
Atlas: What city was this?
Oliver: Cleveland. That street had all homeowners and a very strong sense of community: there were block clubs, people knew each other. The street next to us had a significant number of renters, and therefore was much less stable. The kids on that street were so different from the kids on our street. On our street, kids who came out of the neighborhood became doctors, lawyers, investors, a clinical physiologist. On the next street, I can go and find some of those same kids there, and they have not had that kind of social mobility. In fact, they’re a little worse off than their parents.
As I started reflecting on this as a scholar, I came to a startling conclusion about the importance of homeownership, for one thing, in creating stability, but also the importance of a certain kind of community in which people look after each other. I think we call it in the literature “Guardian Behavior.” It was the kind of neighborhood where none of us could walk down the street and do anything bad, because everyone served as a parental figure. If they did not tell you that you were doing the wrong thing, they would tell your parents. On the other hand, the next street was free-play; you could do anything on that street and no one would say anything to you, and if they wanted to, they didn’t know your parents; they weren’t connected to the community.
Atlas: You became a teacher. Your reputation was as an excellent professor; the Carnegie Foundation named you California Professor of the Year in 1994. Do you miss teaching?
Oliver: I miss it tremendously. I have such an interesting job now, but I miss the give and take you have with undergraduates. Undergraduates have a way of asking questions no one else would think of, and are not fearful of showing their ignorance. Undergraduates, in a course on poverty, often ask the obvious questions that stump you. They lay bare your assumptions. That keeps you on your toes. There’s also a way in which, as they uncover layers of meaning and understanding, their excitement is just visible. And it’s contagious. Graduate students want to hold back; they don’t want you to think they’re learning anything new.
Atlas: Why did you come to the Ford Foundation?
Oliver: In my academic position I was involved in research, teaching, and university professional service that I saw as leading to some kind of social change. I look back on that as the equivalent of an artist’s painting; the painting was a nice canvas, but rather small. The opportunity to make things happen was narrow. The Ford Foundation gives me the opportunity to work on a canvas that is so much larger, to have a much greater reach toward the kind of social change I can support.
Black Wealth/White Wealth
Atlas: Let’s look at your book. Two-parent, two-paycheck black families have dramatically closed the income gap between blacks and whites. The civil rights movement proved that if we did remove barriers impeding black participation in the economy and society, blacks would have achievements equal to whites. And many have, at least for two-income families. But now you come along and write this book and say, “not so fast.” You show that we have to look at wealth as well as income. Why?
Oliver: This book has some personal origins that led me to much larger questions. It became a personal odyssey, initially growing out of my increasing dissatisfaction with my own economic and social position as a highly educated African-American, a person with a two-income family, and someone with the same income as similarly educated white colleagues. I increasingly saw my life chances as far, far less than those of my colleagues. It really burnt me, because I was running as hard, I was doing all the “right things,” as they were. And I just didn’t feel like I was sharing in fruits as abundant as theirs.
I’m talking about some basic things, like the neighborhoods we lived in. I was living initially in a mostly working class, integrated community 30 miles from campus, in Pasadena. And my colleagues were living in upper middle-class, mainly white communities 15 to 20 minutes from the university. I didn’t have kids, but if I did, my kids would have ended up going to schools with much less academic rigor. I might have even had to send them to private school. My other colleagues were living in communities that had good schools, or they were in a position to afford private school.
Atlas: Somehow this got to the issue of wealth?
Oliver: That’s right. I had to say, what is different? Why am I not able to do this? One thing I concluded was that I was a first generation middle class black person who really brought to my present social status no assets from my family’s wealth, that is, stored-up economic resources passed on from generation to generation, or used within a generation to help one’s children consolidate their social mobility, by purchasing education, a first home. Many of my colleagues were able to buy homes because of a transfer of assets before the death of their family for the downpayment on those homes.
I said, we need to explore the distribution of these assets, and to understand historically why that has happened. My co-author is really crucial to this, because he brings another side of the equation: a very familiar sense of how people who have assets have opportunities to increase them.
Atlas: On page 12 you say, “Disparities in wealth between blacks and whites are not the products of haphazard events, inborn traits, isolated incidents or solely contemporary individual accomplishments. Rather, wealth inequality has been structured over many generations through the same systemic barriers that have hampered blacks throughout their history in American society; slavery, Jim Crow, so-called de jure discrimination, and institutional racism.” Why is it important to look at these historical facts today?
Oliver: Because when you look at the income differences, you see some differences that are persistent. When you change the lens and look at wealth, the differences are so much greater that it’s a whole different gestalt. What accounts for that? One could say this is just another reflection of the inborn differences between these groups: that these groups have very different sets of abilities, which accounts for the very different outcomes. But if you look historically at wealth, which is a much better indicator of economic status than is income, you see “the historical trail.” When you talk only about present income, people can always say, “If they just had a job, they would have the same income.” But wealth is not just what you’re able to accrue in your own lifetime. There are very different structured opportunities for groups and people to accumulate wealth that have created this massive difference. [Looking at these factors] forces you to change your whole mode of analysis. That’s one of the crucial public policy changes needed: to stop just looking at a slice of history, at what’s going on now, and to instead look at the scope of history and see the accumulated advantages or disadvantages for various groups.
Atlas: Your chapters on wealth and inequality in America are particularly devastating, because they document how it’s possible to work hard and play by the rules and still not get ahead, especially if you’re African-American. On page 90, you say that nearly three quarters of black children grow up in households with no financial assets. “Nine in ten black children come of age in households that lack sufficient financial reserves to endure three months of no income at the poverty line, about four times the rate for whites.” You look at blacks and whites of similar socio-economic characteristics – education, job, family status, etc. – and paint this alarming racial gap in wealth.
Oliver: People who have read the book, especially African-Americans, say, “its a story I knew in my gut, but I didn’t understand how it worked.” You start off with two folks very similar and ask, “Who accumulated wealth in what period? Who was able to pass that from generation to generation?” That gives you a sense of the differences at the end.
It’s the opportunities that one group had vis-à-vis another over time that has helped these differences to be cemented in the social structure. While African-Americans had 200 years of slavery, white Americans, especially white males, were able to take advantage of public policy decisions that enabled them to get a wealth holding stake in this country. For example, the movement west gave people a chance to not buy land, but have land they could just step on and say, “I’m going to build a house; I’m going to use my hard-earned sweat equity and create a wealth stake.” African-Americans didn’t have that because they were in slavery.
Atlas: What about the new immigrants? We often hear about ethnic groups, particularly Asian ethnic groups, that come here with nothing and all of sudden are building businesses and developing assets.
Oliver: I’m sure your readers know the suburbanization story well. It’s one in which the federal government allowed the development of a strong middle class by subsidizing the mortgages of millions of Americans moving into new suburban housing. One of the real tragedies is that African-Americans didn’t have the opportunity to take advantage of those loans because of the racial restrictions in place. For example, in 1950, a family in Philadelphia could buy a three-bedroom home and pay less for a mortgage and utilities than they could for rent in an inner-city apartment. That family was able to buy in a place like Levittown, outside Philadelphia, for about a $6,000 a year mortgage; 40 years later, those homes are worth $250,000-$300,000. In 1950, no black people were allowed to buy in Levittown.
Atlas: That takes it up to our generation.
Oliver: That’s right. That is a wealth holding stake, used to help those families consolidate their status and their children’s status for generations, that African-Americans haven’t been able to be a part of.
Atlas: One solution you and the National Housing Institute/Shelterforce have in common is mortgage interest deduction reform. [See Shelterforce 79, 80, and 85] In at least three places in the book, on page 43, 41, and 183, you talk about the mortgage interest deduction, and what a regressive tax policy it is.
Oliver: We’ve had a period of about 20 years in which we’ve been on our heels around the issue of taxation, trying to defend things we think keep some progressivity in the tax structure. Now we have to start being on the offensive, and the mortgage interest deduction is one way to do that.
One of the things the American public is tired of is, “Oh, we’re going to give more money to the rich.” Instead of worrying about how we get more money from the rich, I think we need to make the terms: how do we make it fair?
Atlas: Do you think this issue is ripe for a strategic public education and advocacy campaign to reform the mortgage interest deduction in a progressive way?
Oliver: It’s possible.
Atlas: This is a big item – $50, $60, $70 billion dollars. This issue is similar to what Professor William Julius Wilson talked about in an interview in the spring 1997 Ford Foundation Report. He says we often propose small solutions that might be politically expedient, instead of pushing for larger solutions that will really solve problems. Wilson advocates a large-scale public jobs program – the “neo-WPA” – and says anything less is just tinkering around the margins. This also seems to be the case with any attempt to reform the mortgage interest deduction to dramatically affect housing and tax policy.
Oliver: Right. If you don’t keep big ideas alive, then the people who will always win are those people whose big ideas [maintain the status quo]. As long as we stay on the level of just expediency, we end up winning one here, losing one there, and never having a good sense of where we are going.
The other thing we need to think about is, if we want to get rid of something, what do we replace it with? That’s one of the things wrong with the left – we’ve had a critique, but not a programmatic one. What ideas do we have to make equity a reality and justice affordable? If we have those ideas, we need to discuss them in as wide a circle as possible, test them, and when appropriate, promote them in the public policy arena.
The Role of the Ford Foundation
Atlas: Let’s talk about the role of the foundations, which have potential clout. We don’t see many of the more progressive foundations willing to help generate public education campaigns, PR, and promote one or two good ideas.
Oliver: A lot of right-wing institutes and foundations have been very bold. A major critique of progressive foundations is that we have been less involved in promoting ideas. It’s a fair critique.
Atlas: Reducing poverty is at the core of the Ford Foundation’s work. Some academics and opinion makers have proposed replacing the role of government with private charity and churches. Do you agree with that?
Oliver: No. I don’t agree with it personally, and the foundation is very concerned about that, because we know the needs are far too great for any private responsibility to fill the role government should be playing. We’ve consistently said we are not shadow governments, but we provide R&D [research and development] for society; we want to try ideas that can work and be leveraged to a larger level, whether that be the government, or government-private partnerships. The nonprofit world cannot meet the needs as they exist today.
Atlas: If we’re going to change the public discussion away from this present conventional wisdom of “let the charities do it,” don’t foundations have to play a larger role in advocacy, education, and organizing?
Oliver: You’re exactly right, and foundations, especially liberal foundations, are starting to recognize that more. Advocacy is becoming more central in what we support. We’ve had a very healthy discussion about organizing at the Ford Foundation. We’re very concerned about organizing communities, because one thing that’s been lacking is a true grassroots response to the government’s abandonment of its responsibilities.
Atlas: What does organizing mean?
Oliver: It means educating, giving an outlet, helping communities respond to some of the issues they face. Those are challenges we hope to play a part in addressing – through our grantees, through what we support.
We spent 35 years supporting community development corporations [CDCs]. We’re proud of that; they’ve made real contributions. But over the past 15 years those valuable institutions have become much more technically oriented and less engaged with the people in their communities. We need to make that link more organic, support their engagement with communities by organizing the communities around them.
Atlas: Certainly the Ford Foundation has done a remarkable job in creating CDCs. What you’re expressing I would characterize as problems of success.
Oliver: There are some areas we’ve moved out of, because we feel like we’ve done the yeoperson’s work in that area, and the area now has some independence and can graduate to self-sufficiency.
We want to challenge CDCs to be more successful, because we think that’s a very important institution with great potential, but not just technical. There are challenges CDCs can be part of addressing that they are not, partly because they haven’t had the push to do it. It’s also because they haven’t been responsive to what the neighborhoods need, so the neighborhoods can say, “Its wonderful to have housing, but we need some jobs.” And CDCs have to then look at that as something to address.
We’re constantly re-evaluating our programs for CDCs. We think this is a crucial period for [their] development. The two issues we’ve concentrated on are fiscal funding and human resource needs, and now we’re very concerned with how we can help CDCs connect with the communities around them.
Atlas: Let’s get into the issue of social capital raised by Robert Putman and others.
Atlas: But Putman and others argue that it won’t do us any good to put economic resources into a communities if there’s no social capital, no level of trust in local institutions’ capability to invest economic resources in a way that grows the community.
Oliver: I don’t think it’s a chicken or an egg argument. If you say there’s no use putting resources into a community, then you will never get social capital there. You have to have a strategy for communities even when they aren’t full of good social capital, because you’re not going to get people to organize around these issues unless there are some resources that can make a difference.
The idea that urban areas lack any social capital is one of the urban myths. I did a study in Los Angeles on social networks in black communities, and I found there are social networks very similar to the networks Italians have had in their communities, others that we’ve celebrated as being vibrant. But the resources that flow through the network aren’t sufficient to allow people to really engage those communities.
Atlas: If you had to choose how to target your money in a way that made an impact, would you address family breakdown, crime, and the lack of social capital, or unemployment and economic issues?
Oliver: I would go toward the latter, but in such a way that says there are a host of economic problems, some of which we know no amount of resources will reach. I cannot change the distribution of jobs in the national economy. A CDC has no control over that. But a CDC in a region in which jobs are unfairly distributed, and people in low-income communities have no access to those jobs, might be able to strategize about how to link employers with folks in the community. We have to get CDCs to think strategically about what they can address, and to understand intellectually, theoretically, and politically what we have to change on a larger scale.
Atlas: Most people think poor people have no assets. You don’t agree. Can you talk about this idea of building assets – educational assets, financial assets, natural resources – that you have written about?
Oliver: Asset building is a really a paradigm shift in thinking about poverty. We’ve been so oriented toward the poverty line and income definitions of poverty. The problem with this is that once you get people over this imaginary line, you’re done – you’ve solved it. Of course, every time there’s a recession, people just fall right back into poverty. So you’re like Sisyphus pushing the rock up the hill. The notion of asset building is much more enduring in trying to reduce poverty.
An asset is something with inter-generational consequences. I like to point to one that social scientists know much about – education. The best predictor of having an education is your father or mother’s education. Assets also are attributes that help people deal with the ups and downs of the national economy. Assets are resources that are in communities, natural resources in communities. I’ve been struck in the Ford Foundation by our international work, because I realized how transferable my notions of asset development are to work in community-based management of natural resources, the environment, and development. Natural resources – for example, land, water, air – are the main assets many people have in less developed countries. They are crucial for survival, and, like financial assets, have the potential for intergenerational transfer. The challenge in these settings is to work with poor and disadvantaged communities to gain access to, own, control, and derive the benefits of natural resources in their communities. When this occurs, communities can maintain themselves and look forward to self sufficiency.
An asset perspective also changes your view of poor people. Once you view them as problems, you’re always looking at the problems. If you view people as assets, you’re looking at what [is already working that] needs to be developed to help them.
One of the questions I ask every time we talk about a grant is, “What are the assets we’re building here? What’s the potential for the inter-generation transfer? Are we building something of enduring value?” With our economic development program, how do we get durable economic improvements, not improvements that are going to disappear when the business cycle goes south?
Atlas: Can you point to your favorite project at the Ford Foundation?
Oliver: My favorite project is the IDA (Individual Development Account) [See Shelterforce #89 and #106], which I promoted in my book. It has really given a shot in the arm to thinking about how we get a number of actors – CDCs, women’s self-help groups, father programs – thinking about this notion of financial stability. Giving people some financial reserves allows one to think about their future, as opposed to income, which comes in and goes out. Once you have a stake, then you can think, “If I have a little more, I can get a house. If I have a little more, I can help my kids go to college.”
I also see this as my first foray into large governmental policy, because I think everyone should have access to an IDA.
Atlas: Is there a way of tracing how families move up the economic ladder using IDAs?
Oliver: We have started a demonstration project, in which we’re going to follow 2,000 families from around the country. This is our foray into a big policy area. But first I want to have the data to demonstrate that this actually does matter, that we have behavioral changes associated with it, that it really does boot people up and forward.
Along side of that, I want to create an education program around IDAs, thinking about IDAs as a redistributional issue, a program that can be used when you’re talking about large tax changes.
Atlas: This seems a cutting-edge issue. Who else is doing this?
Oliver: We’re partners with the Joyce Foundation and one other foundation. The interesting thing about this idea is that it has an attraction on cross-ideological grounds; you can build a consensus on the idea. But the idea has a more penetrating value than some conservatives see on its face, of actually trying to address the issue of justice in tax policies. We’re not thinking about this as something the foundations are going to fund; this is something we see as a potential government policy, one that has widespread appeal and is universal.
Atlas: This could fund job creation, education, and homeownership?
Atlas: Some people are talking about welfare reform in this same context. What is your view of the welfare reform program – is it consistent with the idea of asset development?
Oliver: Those of us on the left have had a very difficult time defending welfare. Therefore we allowed the welfare reform debate to get out of our control. We didn’t like welfare as it was, we don’t like the new welfare, but now it’s time to deal with it.
We’re all very concerned that, come two, four, five years, there will be a lot of misery and pain for people who’ve been pushed off. A number of foundations are trying to track that. We decided to do some things that are a little more limited. We’ve been concerned, for example, with the issue of fathers who have not been able to keep up court-ordered child support payments. The new welfare legislation essentially criminalizes that behavior. It also criminalizes women who are not willing to say who the fathers are. We’ve been engaged for the past three or four years in anticipating some of the legislation around that, and have really created a whole field of community-based organizations trying to bring these fathers and mothers into a relationship in which the state won’t be involved but fathers can claim the fatherhood of their babies, work with community-based organizations on paying child support, and have access to job training programs. This is something a little narrower but still important.
Atlas: Does the Community Reinvestment Act [CRA] have a role to play in asset development and strengthening CDCs?
Oliver: Since I’ve been at the foundation, we’ve thought a little more about the CRA than in the past. We have been trying to provide alternative banking options for low-income communities with our work on community development finance. We’re now in the middle of rethinking some of our work in housing. One thing I pushed us to look at a little more is [promoting] homeownership, and that gets to the issue of financing. That’s where I think we may end up with some engagement around the CRA.
Atlas: The liberal foundation world and a lot of people involved in anti-poverty activities have promoted multi-culturalism, which, others argue, emphasizes our differences and not what we have in common. Do you agree with that?
Oliver: I don’t agree. Multi-culturalism has become a negative for some people because in the past the conversation has been dominated mainly by white intellectuals, pretty much all male, who have mostly been comfortable saying exactly what they want to say. Multi-culturalism has allowed a range of voices, and that can lead to a lot of cacophony. But I’m not sure multi-culturalism is a failure. It has created movement, and certainly a lot of discomfort. This is a stage we have to go through. I find it heartening that the center of the multi-culturalism debate now is talking more about our similarities than our differences.
One of the things about the book I like to say is that I came to it through the front door of race and left through the back door of class. By looking at race, I got a better sense of the class structure of society, and how race fits into it. The proposals at the end are not just oriented toward increasing access to wealth for African-Americans, but for all Americans who are low-income and assetless.