Wednesday, June 16, 2010

The Racial Wealth Gap Increases Fourfold in One Generation

In a recent research and policy brief, the Institute on Assets and Social Policy (IASP) at Brandeis University discusses its finding that the racial wealth gap has increased fourfold over the past generation, from $20,000 to $95,000.

IASP’s data highlight a significant growth in assets among white families between 1983 and 2007, with the greatest wealth accrued to highest income whites. During this time period, however, high-income African American families’ wealth grew only 25% as much as middle-income white families’.

The disparity in income growth was accompanied by a disproportionate increase in the negative wealth, or debt burden, of African American families. In each year of the study, at least 25% of African American families had no assets.

The expanding racial wealth gap indicates that public policies to support family asset-building and economic mobility are not fully addressing the problem. The data show that job achievement alone cannot predict family wealth holdings; universal policies do not necessarily translate to universal wealth-building outcomes. To close the racial wealth gap, IASP argues, asset-building policies must be revisited and targeted to families of color whose economic security has remained more tenuous than their peers in the workforce.

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