So black Americans started off generations behind, only to encounter the redlining and racially restrictive housing covenants of the early-to-middle 20th century, which prevented the sale of many homes to black Americans, and isolated them together in communities that lost value as white residents fled to the suburbs. After the broken promise of “ 40 acres and a mule” to newly freed slaves, virtually nothing was done to endow black Americans with a share of the wealth generated by centuries of slave labour – the same labour that, directly or indirectly, helped to build most of the wealth enjoyed by white Americans. Take homeownership, which has long been the primary means by which Americans of modest and middle-class income are able to build generational wealth. African-American households are making ‘middle-income money’ – but have the wealth of a white high-school dropout Dedrick Asante-Muhammad Both were intentional,” said Dedrick Asante-Muhammad, a senior fellow at Prosperity Now and one of the report’s authors.
“The middle class didn’t just happen by market forces, and the whiteness of the middle class didn’t just happen by market forces. The authors cite the legacy of discriminatory housing policies, an “upside down” tax system that helps the wealthiest households get wealthier, and the economic effects of mass incarceration as among the root causes for the discrepancy.
“If the racial wealth divide continues to accelerate, the economic conditions of black and Latino households will have an increasingly adverse impact on the economy writ large, because the majority of US households will no longer have enough wealth to stake their claim in the middle class.” With the US set to become “majority minority” by 2044, researchers say this spells major economic peril for the nation. Figures are in 2013 dollars and exclude durable goods Source: Edward N Wolff, Household Wealth Trends in the United States, 1962-2013. “At that point – just three years from now – white households are projected to own 86 times more wealth than black households, and 68 times more wealth than Latino households.” “By 2020, median black and Latino households stand to lose nearly 18% and 12% of the wealth they held in 2013 respectively, while median white household wealth increases by 3%,” the report states. Latino-Americans, who are also experiencing a sustained downward wealth slide, will hit $0 about two decades later, according to the study by Prosperity Now and the Institute for Policy Studies. A new report calculates that median wealth for black Americans will fall to $0 by 2053, if current trends continue. It’s important to me.”īut Hamilton is in the minority, in execution if not intention. And it’s working: a decade after she began working with a financial coach, she is on track to have a positive net worth by March 2018. “$50 is definitely not my goal, but it’s all I can do with the money that’s going out,” Hamilton said. Working as a medical office manager and earning her college degree, the mother of five manages to squelch away $50 a month by furiously clipping coupons and being “extremely frugal”. Now 48, Hamilton is on the path to a different reality. Three years from now, white US households are projected to own 86 times more wealth than black households
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