The chart is from a sobering new report from the Institute for Policy Studies: The Ever-Growing Gap: Without change, African-American and Latino families won’t match white wealth for centuries.
Key findings from the report:
- Over the past 30 years, the average wealth of White families has grown by 84% — 1.2 times the rate of growth for the Latino population and threetimes the rate of growth for the Black population. If the past 30 years were to repeat, the next three decades would see the average wealth of White households increase by over $18,000 per year, while Latino and Black households would see their respective wealth increase by about $2,250 and $750 per year.
- Over the past 30 years, the wealth of the Forbes 400 richest Americans has grown by an average of 736% — 10 times the rate of growth for the Latino population and 27 times the rate of growth for the Black population. Today, the wealthiest 100 members of the Forbes list alone own about as much wealth as the entire African-American population combined, while the wealthiest 186 members of the Forbes 400 own as much wealth as the entire Latino population combined. If average Black households had enjoyed the same growth rate as the Forbes400 over the past 30 years, they would have an extra $475,000 in wealth today. Latino households would have an extra $386,000.
- By 2043 — the year in which it is projected thatpeople of color will make up a majority of the U.S. population — the wealth divide between White families and Latino and Black families will have doubled, on average, from about $500,000 in 2013 to over $1 million.
- If average Black family wealth continues to grow at the same pace it has over the past three decades, it would take Black families 228 years to amass the same amount of wealth White families have today. That’s just 17 years shorter than the 245-year span of slavery in this country. For the average Latino family, it would take 84 years to amass the same amount of wealth White families have today — that’s the year 2097.
A Post-Racial Society With a Racial Wealth Divide?
From the transcript:
HOXIE: Historical policy definitely has played a role in contributing to the racial wealth gap. And one of the interesting things about studying wealth is that it’s really where the result of past policy meets the present that’s impacting people’s lives. So income can tell us a snapshot of where people are at right now, but wealth really gives us that longitudinal view. And as you pointed out, the historical public policies in this country have contributed directly to the growing racial wealth gap we’re witnessing today. And unfortunately, current policies that we have right now also contribute to the racial wealth gap we see today.
Just one example of that is the tax expenditures that we see come out of Congress year-in, year-out, which now total over half a trillion dollars, $600 billion, to be exact. So we’re seeing this money come out that’s designed to be helping people generate wealth. It’s for retirement savings, it’s for home ownership, it’s for things like saving for your child’s college. But the problem is that it’s being skewed into fewer and fewer hands, people at the tippity-top of the economic spectrum who don’t need huge subsidies in order to maintain or generate wealth. People at the bottom are not getting the same amount of help, or anywhere near the amount of help that people at the top are getting.
BROWN: And your report notes that, that there has been tremendous accelerated wealth, growth by the top 1 percent of Americans. You cite the Forbes 400 and you say that they have seen wealth gains of over 700 percent in the last 30 years. I’m curious, because most of the Forbes 400 are white Americans, now, if you were to somehow exclude these very wealthy hundreds of people from this equation, does that change the wealth gap at all? Does that shrink it between when you’re looking at average black, white, and Latino families? Or is the gap still about the same?
HOXIE: Well, it’s certainly true the wealth has concentrated over the past 30 years in an incredible amount into the tippity-top of the economic spectrum. The Forbes 400, as you mentioned, had an average wealth gain of over 700 percent. For context, that’s 10 times faster than the rate of growth for an average Latino family and 27 times the rate of growth for an average black family. So no doubt that money has been concentrating significantly.
And to you direct question, I think there is a role that money concentrating at the top plays in driving the averages up for white families. Because if we look at the median income, or median wealth, excuse me, black wealth over the past 30 years for the median family has actually gone down. So we talk a lot in this report about the average family which, you know, the statistical average is being pulled up by those at the top, and the same is true for white families.
Now, the median white family has gone up, but less than the average, which implies that the top of the spectrum is pulling up that average. But for the black median family and for the Latino median family those rates have been going down. So what we’re seeing is that a typical family that you see on the street is not doing as well as they were 30 years ago when it comes to generating and maintaining wealth.
What more to say?