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As we celebrate Black History Month, we can take pride in the progress we’ve made while also acknowledging how far we have to go. It is our core value that a vital part in learning about Black History is also understanding the long lasting events of the transatlantic slave trade; the over three generations of purposeful and systemic genocide, raping, stealing, and pillaging of Nigerian, Malian, Ghanan and other men, women, children, doctors, business owners, scientists, and leaders and enslaving them for the profit of white men. Even though the achievements of our most precious historical figures like Frederick Douglass, Harriet Tubman, Sojourner Truth and more are nothing sort of miraculous it can be easy to forget that the effects of U.S slavery continue to impact the descendants of those African slaves continue through today. The road to undoing slavery in America is still a vibrant and real issue in present day.
Understanding the Racial Wealth Gap
- The median white household will own 86 times more wealth than its black counterpart, and 68 times more wealth than its Latino one.
- The median white family has more than $100,000 in additional wealth than the median black family.
- It will take approximately 228 years before black families have as much wealth as white families right now if no policy change happens.
Who is impacted:
- Extremely poor black families.
- Black families with graduate or professional degrees have $200,000 less in wealth than similarly-educated whites. These black or Latino college graduates don’t even have as much wealth as white high school dropouts.
- Similarly, two-parent black households have less wealth than single-parent white households
Why Wealth is Important
Wealth is a crucially important measure of economic health. Wealth allows families to transfer income earned in the past to meet spending demands in the future, such as by building up savings to finance a child’s college education. Wealth provides a buffer of economic security against periods of unemployment, or risk-taking, like starting a business. And wealth is needed to finance a comfortable retirement or provide an inheritance to children. In order to construct wealth, a number of building blocks are required. Steady well-paid employment during one’s working life is important, as it allows for a decent standard of living plus the ability to save. Also, access to well-functioning financial markets that provide a healthy rate of return on savings without undue risks is crucial.
About The Racial Wealth Gap
Failures in the provision of these building blocks to the African-American population have led to an enormous racial wealth gap. The racial wealth gap is much larger than the wage or income gap by race. The wealth gap measures the difference between the median wealth of blacks versus the median wealth of whites. Almost all studies calculate wealth by adding up total assets (e.g., cash, retirement accounts, home, etc.) then subtracting liabilities (e.g., credit card debt, student loans, mortgage, etc.) The resulting figure is your net worth. Until the 13th Amendment in 1865, slavery legally prevented blacks from building wealth. Until the Civil Rights Act of 1964, Jim Crow laws continued segregation in the south. They detailed what jobs blacks could take and how much they could be paid. They created indentured servitude. They restricted where blacks lived and traveled. Public parks, transportation, and restaurants were segregated. Even some towns were off limits to blacks.
These laws were violently enforced by the Ku Klux Klan and lynchings. Between 1880 and 1950, white mobs lynched blacks at least once a week for some perceived breach of the racial hierarchy. Most of the lynchings took place in small southern towns where poor white farmers perceived blacks as an economic threat. In 1935, the Social Security Act excluded farm workers and domestic workers from accruing benefits. At that time, most blacks still lived in the South, and they were illiterate. That meant they were more likely to be farm workers and domestic workers. As a result, two-thirds of blacks never received Social Security’s wealth-building opportunities.
- According to the New York Times, for every $100 in white family wealth, black families hold just $5.04.
- The Economic Policy Institute found that more than one in four black households have zero or negative net worth, compared to less than one in ten white families without wealth.
- The Institute for Policy Studies recent report The Road to Zero Wealth: How the Racial Divide is Hollowing Out the America’s Middle Class(RZW) showed that between 1983 and 2013, the wealth of the median black household declined 75 percent (from $6,800 to $1,700), and the median Latino household declined 50 percent (from $4,000 to $2,000). At the same time, wealth for the median white household increased 14 percent from $102,000 to $116,800.
- The gap is worsening. Between 1983 and 2013, white households saw their wealth increased by 14 percent. But during the same period, black household wealth declined 75 percent. Median Hispanic household wealth declined 50 percent.
“Black and brown people of color have been systemically and systematically prevented from building wealth as a collective in the U.S”
About 29 Days of Little Known Facts About (Black) American History
29 Days of Little Known Facts About (Black) American History is an annual blog campaign curated by 540WMain that has a mission to promote and share little known facts about Black Americans everyday throughout the month of February. Now in it 3rd year the campaign highlights the life and work of past and present day Black Americans that are overlooked or underrepresented in our conversations about American history.
540WMain will celebrate its 4 year anniversary with a party and extravaganza on Saturday June 20, 2020. In just four years the organization has become a pillar in the Susan B. Anthony neighborhood and a convener and curator of important and vital community conversations, classes, and programs. Your financial support helps us scale up this work in 2020 and beyond with a year long fundraising goal of $40,000