Fixing The Racial Wealth Gap?

The St. Louis Fed reported that income and wealth gaps between Black and white households have hardly narrowed since 1956, and the size of those gaps is shocking. In America, the net worth of a typical white family is approximately $162,00, while the typical Black family has $16,000 and the typical Hispanic family as about $21,000.

The wealth gap and income gap align with the rates of college attendance and college graduation, the study found. Whites are more likely than blacks to attend college, and while 22.8% of Blacks between the ages of 25-29 have graduated from college, that is true for 42.1% of whites. But college is not enough to explain the gap because Black college graduates then have higher unemployment rates and, when they find a job, lower pay. 

A new report issued today by the Roosevelt Institute for Black History Month, authored by Anne Price, says though higher education is still vital, there is a need to rethink current approaches to racial wealth inequality. Twice as many white families have retirement accounts as Black families, and usually hold much higher amounts. Providing access to a national savings plan might help with some of the financial disparities at retirement. The new report emphasizes that the racial wealth gap requires a focus on structural problems, including improved wages and working conditions and more protective labor laws.

See Naomi Cahn, Fixing The Racial Wealth Gap?, Forbes, February 5, 2020.