New Charity Official Seeks to Close the Wealth Gap

By Cassie J. Moore

In the early 1970s, Meizhu Lui took a major detour from her intended career path. She held a master’s degree in Russian language from the University of Illinois at Urbana-Champaign yet was unable to find a job that took advantage of those skills. When she was 27, she and her husband divorced, and she needed to find work to support her 7-year-old son.

She landed low-wage food-service jobs — first at Dunkin’ Donuts, and later at Boston City Hospital.

Ms. Lui, now 63, says that while she took the hospital job out of necessity, she decided to stay because she liked her co-workers. But she didn’t like how they were treated by their employers, so she decided to become a union activist.

That experience, along with the discrimination she saw her father, a Chinese immigrant, face at work as she grew up in Ann Arbor, Mich., helped propel her to her new position as director of the Closing the Racial Wealth Gap Initiative, at the Insight Center for Community Economic Development, in Oakland, Calif. In her job, Ms. Lui works from Boston and earns an annual salary of $87,000.

The goal of the project, which is financed entirely by the Ford Foundation, is to close the gap that exists between whites and minorities when it comes to savings and financial assets by advocating for public policies that help poor people to save and build wealth.

As the economy continues its downward spiral, and the number of Americans working jobs that pay wages below the poverty line grows quickly, Ms. Lui says the work she is doing to help poor minority workers save money is more crucial than ever.

“This is part of the reason for this implosion — the rules are all sort of fixed in favor of those who already have, as opposed to helping those who don’t have, get ahead,” she says. “And if we look at our history, the times our economy has done the best are times when we have helped those without get something.”

Roger Clay Jr., president of the Insight Center, said he decided to elevate Ms. Lui’s position from manager to director after he found out she was interested in the job.

“She has one of the best reputations out there in the world on this issue,” he says.

Mr. Clay points to Ms. Lui’s accomplishments at her last job — where, as executive director of United for a Fair Economy, in Boston, she developed the Racial Wealth Divide program, among other projects, and wrote the book The Color of Wealth: The Story Behind the U.S. Racial Wealth Divide, along with four other women.

In an interview, Ms. Lui spoke about her new role.

What is one of your main goals?

We really want to increase the level of conversation. There’s a recognition that there are racial disparities, but people don’t really want to talk about it, it’s not a comfortable topic. So we need to figure out how to talk about this in a way that helps the mainstream of the country understand that this isn’t about giving a handout to a special-interest group or something like that, but we really need to do this if we are going to build our whole economy and maintain competitiveness in the global marketplace.

What are some challenges that you foresee?

Certainly we see the implosion of the economy going on around us even as we speak, so it’s really a very unusual, unique moment in U.S. history. And it seems like there’s a real challenge in that when people feel squeezed, they really just look at their own situation, and it’s hard for them to look around and see what’s happening to other people. So we really are going to have to make the argument very strongly that we’re all connected and that you can’t save yourself without righting the entire boat.

What kinds of economic policies will you be working toward to close the wealth gap?

It’s actually very expensive to be poor. You don’t get the better interest rates and so on that wealthier people have. So one of the successes already has been taking the earned-income tax-credit refund check and putting some of it directly into a bank account. It was a campaign that was successfully waged by the National Community Tax Coalition. With a bank account, you can get prime loans as opposed to predatory loans and aren’t subjected to the high interest rates at the local check-cashing joints. For many people that’s the first time they’ve had a bank account, and it starts them on a savings pattern.

Looking at the home mortgage-interest deduction, that’s a major benefit to people, but if you are making so little money that you don’t file a tax return, you don’t get that benefit because it comes in the form of a deduction. So another idea is to make that a refundable credit as well. A lot of solutions could come through the tax code.

The tax code is a way that higher-income people get these incentives to build wealth. We have asset-building programs for wealthy people, such as tax deductions for retirement accounts, or 529 accounts [to save for college], or tax breaks for income on capital gains, but we really don’t have anything for low-income people. In fact, we put barriers up.

Those of us looking at what’s going on right now are really in favor of investing at the base, because that’s where people will start to build small businesses or come up with innovations and inventions, and do all kinds of entrepreneurial things, as opposed to thinking that it’s going to trickle down. We’ve tried that a few times and that doesn’t work.

You have described yourself as a “professional troublemaker.” Why?

I got my start in the social-justice nonprofit world because I could see what was happening to my own family, probably first of all with my father, who came to this country in 1920 when the Chinese exclusion laws were still in effect.

And I know that he worked really, really hard and yet I saw white men pass him by on the promotional ladders, and saw that he got passed over a lot and I didn’t really understand why. For his generation, because he was not even allowed to become a citizen until the 1950s, he felt that just even having a small toehold was good enough for him, or he felt fortunate to even have that much. But for me, being American born, I was like, “Wait a minute, this really is not acceptable.” And [felt] that we really should have full equality.

Then, I became a single mother when my son was about 7, and once again I found myself in a difficult job market and pounding the pavement and again faced discrimination at the job. I was at a Dunkin’ Donuts and the manager said, “Chinese are good workers, aren’t they?” and I knew that I was going to be in for a rough ride.

It’s that kind of thing that makes me understand the roots of the racial wealth gap, that there’s still discrimination, first of all, but there is also just the way that the rules of the game have been mapped out that don’t allow people of color, no matter how hard they work, no matter how upstanding they are, and no matter how hard they try to do the right thing, they still can’t be equal. I feel like we need to create the country that really was promised in the early years, a country where everyone has that right to pursue opportunity and life, liberty, and the pursuit of happiness.

When you speak to people about building their savings, what are some key ideas you share with them?

One is to understand the importance of wealth. Many people don’t really understand what wealth is, even — they see it as stuff. And consumerism is not the way to get ahead or to have any kind of financial stability. So simply putting some money aside, before you even have a chance to spend it, is so important.