The Roots Of The Widening Racial Wealth Gap: Explaining The Black-White Economic Divide

THOMAS SHAPIRO, TATJANA MESCHEDE, SAM OSORO - INSTITUTE ON ASSETS AND SOCIAL POLICY

27 February, 2013

Growing concerns about wealth inequality and the expanding racial wealth gap have in recent years become central to the debate over whether our nation is on a sustainable economic path. This report provides critical new information about what has fueled the racial wealth gap and points to policy approaches that will set our country in a more equitable and prosperous direction.

New research shows the dramatic gap in household wealth that now exists along racial lines in the United States cannot be attributed to personal ambition and behavioral choices, but rather reflects policies and institutional practices that create different opportunities for whites and African-Americans. So powerful are these government policies and institutional practices that for typical families, a $1 increase in average income over the 25-year study period generates just $0.69 in additional wealth for an African-American household compared with $5.19 for a white household. Part of this equation results from black households having fewer opportunities to grow their savings beyond what needed for emergencies.

Continue reading this report from The Institute on Assets and Social Policy in its entirety below:

The Roots Of The Widening Racial Wealth Gap: Explaining The Black-White Economic Divide