Racial Wealth Gap Widens

Recently in the Washington Post,  Meizhu Lui, director of the Closing the Racial Wealth Gap incense and moneyInitiative,  notes the widening racial wealth gap in the U.S. (Creative Commons License photo credit: Kevin Cortopassi ).   Citing the Federal Reserve’s new report Survey of Consumer Finances,  Lui writes:

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.

In her thoughtful and well-researched piece, Lui mentions a couple of pieces of social science research about this racial wealth gap.   Given that owning a house is the surest path to wealth for most Americans, she notes the racial disparity in the kinds of home loans whites and blacks have access to, citing a Harvard University study showed that in Massachusetts, a high-income African American was more likely than a low-income white borrower to get a subprime loan.

The other research Lui points to is one that highlights the structural advantages that whites have historically been given in housing: in Ira Katznelson’s “When Affirmative Action Was White.” In his research, Katznelson examines the white advantage built into the GI Bill after World War II in which white GIs received government-subsidized home mortgages, but soldiers of color were excluded. Of the 67,000 mortgages issued under the GI Bill in New York and northern New Jersey, 66,900 went to white veterans.

That’s how structural inequality in home ownership – and then, in turn wealth – gets put in place and reinforced.  Through policies that systematically benefit whites and harm people of color excluded from those policies.   Undoing those structural advantages is going to both a clear understanding of racial inequality and a concentrated effort to dismantle it.