African-American’s Vanishing Wealth
Hundreds of studies have highlighted the widening wealth and income gap between African-Americans and many other groups. The unfortunate reality is that gap is larger than thought and getting even bigger. Oliver and Shapiro (1995), in their seminal work on wealth and income disparities, provided the sources of the wealth differences between blacks and whites. They identified some of the serious impacts of low wealth on the wellbeing of African-American families. The most substantial were the lack of decent and safe housing and education, poor health and many other correlated factors.
According to a recent study by the Institute for Policy Studies report Dreams Deferred, “between 1983 and 2016, the median black family saw their wealth drop by more than half after adjusting for inflation.” The report also shows that, “compared to a 33 percent increase for the median white household.” This reality is horrific for the black community and has a detrimental impact on future generations. The report also finds that, “the median black family today owns $3,600 — just 2 percent of the $147,000 of wealth the median white family owns.”
I did a video to highlight these important facts and identify potential solutions.
The massive wealth gap between African-Americans and whites leaves blacks much less prepared for an emergency and with fewer resources to invest in their own future. Moving into a different neighborhood, starting a business, sending a child to college or generally improving their lives is limited by both the wealth gap and the inability to access resources. African-American financial and economic mobility is substantially hampered and remains a sticking point.
We believe that education is one of the tools that can be used to address this situation. Incentivized education is the key.