The wealth gap between blacks and whites in the U.S. has increased nearly threefold since 1984, according to an eye-popping new research.
The new study, which followed “nearly the same” 1,700 working-age households
over a 25-year period reported that the racial wealth gap just about tripled
from 1984 to 2009, jumping from $85,000 to $236,500.
The median net worth of white households in the study grew to $265,000 over
the 25-year period, compared with just $28,500 for black households, the study,
conducted by academics at the Institute on Assets and Social Policy at Brandeis
“In gross terms, there is no question that the difference in median wealth
between America's white and African-American households has grown stunningly
large,” wrote the authors of the study, titled "The Roots of the Widening Racial
Wealth Gap: Explaining the Black-White Economic Divide.”
"The gap presents an opportunity denied for many African-American households
and assures racial economic inequality for the next generation," wrote co-author
According to the study, a $1 increase in average income over the 25-year
study period generated $0.69 in additional wealth for an African-American
household, compared with $5.19 for a white household.
The differences in homeownership were also dramatic. Rates for white families
were nearly 30% higher than those for black families, and white families were
shown to buy homes, on average, eight years earlier than black families.
White families were also “far more likely” to receive family assistance or
inheritance that helped with covering larger down payments, according to the
study, which pointed a finger at suspect government policies that enabled these
stark differences to occur.
"Public policies play a major role in widening the already massive racial
wealth gap and they must play a role in closing it," said Dr. Thomas Shapiro,
director of the IASP and a principal author of the report. "We should be
investing in prosperity and equity, instead we are advancing toxic inequality. A
U-turn is needed."
The increasing gap could have ramifications that hurt more people than just
those in the black community.
"Wealth – what we own minus what we owe – allows families to move forward by
moving to better and safer neighborhoods, investing in businesses, saving for
retirement and supporting their children's college aspirations. Our economy
cannot sustain its growth in the face of this type of extreme wealth
inequality,” Shapiro said.
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