Racial wealth gap is growing wider

White families now have almost $250,000 more in assets than black families, a divide that has almost tripled in 25 years, a study finds.

By Aimee Picchi Feb 27, 2013 2:43PM

Young man with head in hands (© Arthur Tilley/Workbook Stock/Getty Images)A "toxic inequality" between the haves and have-nots is hurting the U.S., with one issue in particular affecting American households: a widening racial gap between white and black families, according to a new study from Brandeis University.

 

The so-called wealth gap between whites and blacks has tripled over a 25-year period, according to the report, which looked at the same set of families from 1984 to 2009. The study found that white families in 2009 had assets worth $236,500 more than the wealth of black families, up from a gap of $85,000 in 1984.

 

The study found "little evidence to support common perceptions about what underlies the ability to build wealth, including the notion that personal attributes and behavioral choices are key pieces of the equation."

 

The income gap between white and black families has been noted before, with the U.S. Census Bureau finding in 2010 that the median income of black households was $32,068, compared with $54,620 for non-Hispanic white households.

 

But the Brandeis study looked at the reasons for the growing wealth gap, and it concluded the inequality is largely due to home ownership, income, family inheritances and education.

 

Here's how these four factors play out:

 

Home ownership: Because of the greater likelihood for family assistance and inheritances to help with down payments, white families start acquiring homes eight years earlier on average than black families.

 

In the recession, borrowers of color were more likely than whites to lose their homes because they were "more likely to receive high-interest risky loan products," the study found.

 

Income: Income gains for whites had more of an impact on their wealth, with the study finding that every $1 increase in income over the 25-year period added $5.19 in wealth. For blacks, $1 only added 69 cents of wealth.

 

The reason? Discrimination in hiring, training, promotion and benefits have "made it much harder for African-Americans to save and build assets." As a result of fewer work benefits such as retirement plans, black families tend to use wealth to cover emergencies, while whites are able to save and invest, the study found.

 

Inheritance: Whites were five times more likely to inherit than black families, with whites also receiving 10 times more wealth than blacks when they did, the study found. 

 

Education: College completion gaps are growing, with fewer blacks finishing college because of financial strain that forces them to leave school. About 80% of black students graduate with debt, compared with 64% of white students. 

 

So what's the solution? Public policy can help close the racial wealth gap, such as ensuring fair housing and lending policies, the study suggests. This divide spells potential problems for the U.S. economy as a whole, the study's authors said.

 

"Our economy cannot sustain its growth in the face of this type of extreme wealth inequality," Thomas Shapiro, director of Brandeis' Institute on Assets and Social Policy and a principal author of the study, told BrandeisNOW.

 

More on moneyNOW

30Comments
Feb 27, 2013 7:05PM
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Well the property value in my neighborhood has declined ever since more blacks and minorities started moving in. I can say that they dont like doing yardwork, and wont even hire the Mexicans to do it for them. I myself do my own yard and always have. They move in, let the house and yard get run down, then bitch about the shitty place they live in when in fact they helped create it. And the reason Blacks have a problem getting raises or promotions is because most of them dont deserve it. All the ones I have ever worked with, spend more time trying to figure out how to get out of doing their job instead of just doing it. Then if they get fired over it, it's always because they were black. Bottom Line:  A large majority of blacks created this problem that all blacks have to deal with, even the hard working ones and thats a shame but it is what it is.
Feb 27, 2013 6:46PM
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So, what now?  Higher taxes?  Give my job to a person of color?  Should I feel guilty for working so long and hard?  Is it our schools fault for not educating our children?  The black parents fault?  What!?  I have a feeling, that the biggest problem is our horribly broken education system that can't keep these kids in school, and I'm sure that the same education system doesn't teach the basic life skills of, saving, spending, investing.  It's sad as hell.
Feb 27, 2013 11:04PM
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I am a young hispanic female and reading this it makes sense. I grew up in a mostly white community, went to a mostly white school, but my parents were raised in a bad part of town in Jersey. They could of easily chose to raise me in the same environment and they didn't. They never finished high school and had me when they were only 18. They chose to do what was best for me and moved to an area where I could stand a chance. I was the first in my family to graduate high school, bought a house when I was 22 and have owned 3 different vehicles none of which were ever repossessed. Why? Because my parents taught me the skills to be successful and chose to not allow me to grow up in a bad environment. Now, I am not racist by any means but I am so sick of the mostly blacks playing the "white man keeps me down" card or blaming it on they don't have the same opportunities that whites do. After high school, I've noticed more and more the ignorance that gets spewed from all races. All races feel like they are superior at one point or another. But every time I hear crap about slavery or the whites owe me something its stupid. If you want to better yourself, then do it. If you want your kids to have a good life, get off your **** and do something about it. Its ridiculous that racism still even exists. And what really boils my blood is when there is a black person who want's to better them self they are immediately called a wanna be white person. Its all stupid to me. Stop acting like a thug, stop feeling like you have to live in the projects, stop trying to act like half of the un talented hip hop artists that are managing to make millions and do what you have to in order to get where you want to be. My husband and I just went shopping and you had these 4 teenagers, all black, wearing their stupid baggy pants, their cellphones blasting music through out the store, acting like they are cool. Then you had their parents being loud and Im sorry "ghetto" because things weren't given to them. I know I am ranting, but this topic goes for both sides so stop making it about one race or another.
Feb 27, 2013 11:00PM
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Spike Lee and Bill Cosby got it right: black people need to get over it and look in the mirror - and meet the problem head on.  As long as you want excuses, you will forever be disappointed.  The black family is an oxymoron - not much family structure or support.  Yet the beat goes on making bad choices and expecting equal outcomes.
Feb 27, 2013 11:45PM
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I bet that the person who wrote this cry baby article is (1) liberal (2) a democrat (3) is white and has a guilt problem (4) was probably brain washed by college teacher idiots

 

   If you really think about why this is won't take much brain power

 

(1)  most black famlies are raised by one bread winner

(2)  most blacks in big cities--chicago--philly--baltimore--detroit--cleveland--pittsburg--wilmington--camden--memphis--wash dc--detroit---etc; etc; etc are on welfare or

(3)  drugs--gangs

(4) welfare

 

are you beginning to see the picture here-----I know quite a  few black families that make over $200k a year and both parents work   So get off the bullcrap float of blame whitey

Feb 27, 2013 11:58PM
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....."Any man who thinks he can be happy and prosperous

          by letting the Government take care of him; Better take a closer look

               at the American Indian..''...

 

                                     HENRY FORD

Feb 27, 2013 10:19PM
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a gap? yeah there's a gap , It's in the black brain....It's a ****ing gap so wide that you couldn't cross it with a space ship!! Blacks been here for 15 generations and still can't assimilate themselves in this society, the way the use the english language hasn't changed in almost a hundred years. they use the excuse that "whitey" the blue eyed devil keeps them down, yet other races come here, and almost immediately fit in the japanese, the indians, the russians, the spanish, out of all the races we have here, the blacks, hands down, no doubt are the most problematic humans on the planet. and yet we cater, bend over backwards, compromise, And still when we try to explain our position were still racist, honkies, no! i have I have no guilt over blacks.
Feb 27, 2013 9:02PM
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Honestly Whitney4ever. That's the best you could come up with.....
Feb 28, 2013 1:45AM
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How come all these FACTS about how bad things REALLY are, only come out now, AFTER the ELECTION?  All these were facts BEFORE the election.  If the MEDIA had told us all these truths BEFORE the election it might have made a difference.  They blatantly kept the truth out of the news and kissed OBAMAS A*S so he could get elected AGAIN!  He is ruining life for blacks, whites and business owners, the middle class, you name it......we ALL are taking a hit.
Feb 27, 2013 7:06PM
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My response was directed at MZ Speechless
Feb 27, 2013 5:28PM
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Really speechless at the ignorance that I have read thus far from the comments. moving forward, I am a black female with a BA in Economics and a MBA who grew up in a 2 parent household and went to predominantly white schools and can say that there are some contributing factors to the  wealth gap. I was never encouraged to save when growing up and many of my white friends were. Another reason are many blacks move into predominately black neighborhoods which unfortunately statistically the property value increases at a much slower rate than white counterparts. Also yes in many instances hiring discrimination still exists. I am not bitter that I have to work twice as hard to be recognized of my achievements at work but it is my reality. The media also plays an enormous role in the stereotypes of black people in the U.S.  but yet we allow it with the degrading behavior we portray in music videos and reality shows but there are many honeyboo boos and Jersey Shores type whites in the US but yet they are glorified.  hypocrisy and ignorance is still very alive in America from the comments that I see..Lord help us!

Feb 28, 2013 4:06AM
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I see all of these racist comments. While some so called " blacks" can be held in contempt, of course I see whites and not surprisingly hispanics taking up arms for battle against "blacks". White folks never take responsibility for anything bad that they have done that is bad. Read a history book, if they haven't changed it to their benefit.

America is inherently racist. Always have been, always will be. To the hispanic woman who posted that her parents pulled her out of a bad environment. Well your people are adding to the problems of this country. Believe me all mexicans are not workaholics either. I live near some. They are on welfare. The house they live in is run down and over populated. If you can pass for white, that maybe why you are doing so well now. White folks don't like your kind either from what I can see. They use your people.

Then the Obama card gets pulled. What is Obama really doing for "blacks"? Nothing from what I can see. Fighting for illegal immigration, putting white and hispanic women on the supreme court, filling his cabinet with white folks, etc....  Let's all remember that it was not only "blacks" that put him in office. A lot of whites and hispanics put him in there twice.  African Americans will never see justice in this lifetime. I speak from experience. I have worked all my life. Owned two homes and I have seen the injustice in the military, and in the corporate world.  Let's face it this world is lost already. I say enjoy it while you can here on earth, because all of this will pass away. Most of you will never have it this good again. If you can really call it good?

Feb 27, 2013 11:24PM
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Some decent rhetoric, except maybe your's ABS...You just need to grow up, quit being so hateful.

 

LiberalCommie....Still trying to figure out what you are talking about in your little Fantasy World..

BTW....THEY WERE NOT CALLED INDIANS, AND THIS WAS NOT CALLED AMERICA..

Maybe you are speaking to the so-called lost tribe of israel..??...Anyway bullshidt.

 

The rest which relates to the plight and differences, between minorities and whites; As we know and call it in the U.S.(the rest of the World, many places whites are the minorities.)

Overall I find the Story(article) and the Studies somewhat disturbing...And I really, nor many can figure out what can be done about it...There have been many attempts, that have failed or not followed through to fruitation...??

Feb 28, 2013 12:08AM
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Uncle Sugar....No, I was answering to what some guy said in a REPLY to the Whitney4, person.

 

He/she was LiberalCommie something ???

Feb 27, 2013 9:11PM
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If whites stop ripping off people lying taking money from from each other waiting for their parents to die so they can get what they stole from others they would be in the same situation as most blacks.  Money do not come easy and when you are looked at as lazy and useless by the whites and not given the equal opportunity to show your worth what the heck do you think is going to make you money because if a white man thinks he can control every dang thing. You know that blacks were set back so many years it will take a lot more to get on slightly ahead we are all not down there a a lot of us who live comfortable lives.  Stop judging a few as a whole. If so all you whites posting these negative thoughts of yours are all methyl heads and druggies who beat their wives and seclude them in the house cause they don't work and you want to control them as you think you can control everything else, and you take from whomever you kind to make a dollar over charge people liars and cheats. You fear the black man cause he is strong and you think you can take his pride but has been proven wrong if you had to go through what they have you would not last a year you would just shot yourself and call it quits. Their is nothing that make you better then them or anyone else but that you started from the beginning of time being controlling taking others ideas and making money on it and passing it on to your generation. Although most are ignorant you think your words are and negativity will bring someone to the point of giving up but you are wrong money and power is not something that one gets unless they are taught how to get it the wrong way. Most of you will all be revealed and will know what it is to struggle cause you are definitely not living in a time where you can do wrong and get away with it.  Knowledge is a powerful tool and we now have that tool and you hate that you can no longer kill us for opening a book cause we can freely open a book use a computer and learn as you were given that opportunity at birth. Do you honestly think a white man went in the kitchen and fried some chicken and created a secret recipe call KFC chicken heck  heck no his slave did he took the recipe, and what about Aunt Jemima Syrup the proof is on the bottle she invented did, and Uncle Ben rice the proof is on the package where is their ancestors inheritance they left behind in the hands of the greedy white mans ancestors. Think about it Blacks had to be creative to make their life comfortable and whatever they created was taken.

Feb 27, 2013 3:35PM
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The racist far right is going to weigh in and act like thet`re objective,We can see through

their bitter and hate agenda.Name more than 2 black Republicans.The lights arn`t

diming with your thinking.

Feb 27, 2013 3:35PM
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THIS IS VERY SIMPLE, WHITES HAVE BEEN THIEVES FROM THE TIME THEY STOLE AMERICA FROM THE INDIANS....THEY ACQUIRED THEIR WEALTH BY STEALING FROM OTHER NON WHITE RACES FOR THEIR OWN PROFIT. THIS OLD "MONEY" IS THEN PASSED DOWN FROM GENERATION TO GENERATION WHICH WILL CONTINUE THE 'RACIAL" WEALTH GAP BETWEEN BLACKS AND WHITE. SO, YOU SEE; WHITES HAVE ALWAYS THOUGHT OF THEMSELVES AS SUPERIOR AND BELIEVED THEY ARE THE ONLY ONES WHO SHOULD LIVE THE "CREAM OF THE CROP" LIFESTYLE.....THE END!


 

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