Nation’s wealth gap worsens
Charlene Crowell | 5/10/2019, 6 a.m.
If you’re like me, every time you hear a news reporter or anchor talk about how great the nation’s economy is, you wonder what world they are living in. Certainly these journalists are not referring to the ongoing struggle to make ends meet that so much of Black America faces. For every daily report of Wall Street trading or rising corporate profits, you’re reminded that somebody else is doing just fine financially.
To put it another way, ‘Will I ever get past my payday being an exchange day … when I can finally have the chance to keep a portion of what I earn in my own name and see how much it can grow?’
When new research speaks to those who are forgotten on most nightly news shows, I feel obliged to share that news, especially when conclusions find systemic faults suppress our collective ability to strengthen assets enough to make that key transition from paying bills to building wealth.
“Ten Solutions to Close the Racial Wealth Divide” is jointly authored by the Institute for Policy Studies, Ohio State University’s Kirwan Institute for the Study of Race and Ethnicity, and the National Community Reinvestment Coalition. This insightful and scholarly work opens with updates on the nation’s nagging and widening racial wealth divide. It then characterizes solutions offered as one of three approaches: programs, power and process.
According to the authors, programs refer to new government programs that could have a major impact on improving the financial prospects of low-wealth families. Power refers to changes to the federal tax code that could bring much-needed balance to the tax burden now borne by middle- and low-income workers. Process refers to changes in the way the government operates in regard to race and wealth.
“For far too long we have tolerated the injustice of a violent, extractive and racially exploitive history that generated a wealth divide and where the typical black family has only a dime for every dollar held by a typical white family,” said Darrick Hamilton, report co-author and executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University.
From 1983 to 2016, the median black family saw their wealth drop by more than half after adjusting for inflation, compared to a 33 percent increase for the median white households. Keep in mind that these years include the Great Recession that stole nearly $1 trillion of wealth from black and Latinx families, largely via unnecessary foreclosures and lost property values for those who managed to hold on to their homes.
Fast forward to 2018, and the report shares the fact that the median white family had 41 times more wealth than the median black family, and 22 times more wealth than the median Latinx family. Instead of the $147,000 that median white families owned last year, black households had $3,600.
When Congress passed tax cut legislation in December 2017, an already skewed racial wealth profile became worse.
“White households in the top 1 percent of earners received $143 a day from the tax cuts, while middle class households (earning between $40,000 and $110,000) received just $2.75 a day,” the report states.