Black-White Wealth Gap Continues to Widen in U.S.
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From Meizhu Lui, writing in the Washington Post:
The euphoria of our gambling spree is over. In the harsh glare of morning, the hangover is tough. And the latest data are from 2007, so they don't even capture the worst of the decline.
The net worth of the average American family is less than it was in 2001. We borrowed more for that trip to Vegas than we brought home. Everyone knows this now.
But here's something being talked about much less: The gap between the wealth of white Americans and African Americans has grown. According to the Fed, for every dollar of wealth held by the typical white family, the African American family has only one dime. In 2004, it had 12 cents.
This is not just a gap. It's a deepening canyon.
The overhyped political term "post-racial society" becomes patently absurd when looking at these economic numbers. This week, experts on asset building in communities of color are meeting with members of Congress to talk about closing the wealth gap. While the government is rescuing failing financial institutions as a short-term measure, those at the two-day Color of Wealth Policy Summit will make the case that the nation's long-term economic future depends on the inclusion of all Americans in opportunities to build wealth.
Why such a big gap? The biggest predictor of the future economic status of a child is the net worth of the child's parents. Even modest inheritances or gifts within a parent's lifetime -- such as paying for college or providing the down payment on a home -- can give a child a lift up the economic ladder. And historically, white families have enjoyed more government support and tax-paid subsidies for their asset-building activities.
The market-worshippers' explanation for the persistence of the racial wealth divide is cultural: people of color -- most raised by those damn single welfare moms -- just don't have the boot-strapitude to make it in our ruggedly individualistic economy.
But as I explained in a piece titled, " The American Dream, or a Nightmare for Black America?," that narrative misses the importance of "inter-generational assistance" in terms of economic outcomes. Check out the highlights after the jump...
Joshua Holland is an editor and senior writer at AlterNet.