For this week’s post, I wanted to highlight a study done by researchers at the Institute on Assets and Social Policy that was released recently.
The study found that the wealth disparity between White and Black households has more than quadrupled, regardless of whether a family (White or Black) is making a lot of money or a little bit of money. To understand the study, it’s important to understand the difference between wealth and income. Wealth refers to the total net assets to which a person has access (owning a house, a car, stocks, bonds, mutual funds, retirement accounts, etc). Income, on the other hand, is the amount of money that someone is making at any given time.
As such, the study found that the average White family has 18 times the wealth of the average Hispanic family and 20 times the wealth of the average Black family. This has been a problem for a while (as in 1995, White families had 7x the wealth of Black or Hispanic families), but the current economic crisis has brought the wealth gap to historic inequality.
That kind of disparity was hard for me to understand until I saw it in dollar amounts. The median white household today has a net wealth of approximately $113,000, while the median Hispanic family has a net wealth of $6,325 and the median Black family has a net wealth of $5,667.
Check out a great video from CBS News that highlights the problem.
Now the frustrating part of this study is that it should be a call to reform in the United States, a call for us to understand the root causes of this problem and look for just and equitable policies that can change this reality.
However, we list in a society that says that regardless of what racist or sexist policies exist, regardless of what weight history places on the current generation, or regardless of what sociological patterns exist, we live in a society of rugged individualists. If your net worth is low, it must be your fault. Thus, much of the commentary and commenting being done across the internet in response to this startling study has been placing blame on Black and Hispanic families for (among other things) not saving enough or for being too lazy (despite the fact that white and black families save at the same rates).
However, we do not live in isolation. We are a product of our history, and when one group of people has a 600 year jump on wealth accumulation (or even a 10 year jump), that makes for some drastic inequality, for wealth (not income) is what is passed from generation to generation.
For those who doubt the concept of white privilege, this is yet another example of the ways in which we, as white people, have a leg up. Our families have had, for the most part, significantly longer than families of color to accumulate wealth and invest our wealth in areas that are less liquid (in bonds as opposed to the housing market). As such, we have easier access to the ever-more-expensive world of college education, and we have more stability and safety during times of economic upheaval. Even our tax policy today is designed to benefit white folks, for our lowest tax rates are on investment or capital gains, which, according to this study, are primarily a tool of white wealth.
In this time of calls for economic reform, there is indeed a need for economic reform, reform that helps those who have been historically and are currently oppressed and discriminated against to accrue wealth in ways that will lead to a more just nation.