The Gap

Racial wealth disparities prevent minorities from achieving economic success

Kaitlin Green, Publication Editor

Though it may not be observed on a regular basis by students in Johnson County, there is a disparity between the wealth accumulated by white versus black Americans.

The racial wealth gap as it is experienced today stems from centuries of discrimination after the era of slavery.

Jim Crow laws imposed in Southern states ensured that while African Americans were deemed free, they could not gain or pass on wealth. This effectively caused discrimination in sectors such as housing and education, grouping white and black citizens into separate communities.

Consequently, the practice of redlining throughout the 1930s labeled neighborhoods predominantly filled with racial minorities as “dangerous” for potential investors. Though it was outlawed in 1968 with the Fair Housing Act, its effects live on in communities that continue to suffer from poverty because of the circumstances of their formations.

Essentially, up until the Civil Rights movement of the 1960s, segregation was so deeply rooted in society that closing the wealth gap was virtually impossible. The struggles, in return, continue in trends seen in modern-day society.

According to a 2019 survey of consumer finances by the Federal Reserve, “White families have the highest level of both median and mean family wealth: $188,220 and $983,400, respectively.” Comparatively, the source also cites that “Black families’ median and mean wealth is less than 15% than that of White families, at $24,100 and $142,500, respectively.”

This wealth gap is made even more evident when assessing absolute income mobility, which analyzes the fraction of children who are able to make more money than their parents did, essentially determining the following generation’s success.

Information published in a research article on Science.org found the rate of absolute income mobility had declined from 90% of children born in 1940 to only 50% of children born in 1980. Though a pattern for this trend could not be determined, the cause for this decline was attributed to the fact that Gross Domestic Product rates are distributed unfairly across earners, making the wealth gap even more prominent.

This claim can also be supported by information published by the Economic Policy Institute that states from 1979-2017 wages for the top 0.1% of earners saw 157.3% growth, while the bottom 90% of earners only saw 22.2% growth, which contributes to widening the distribution of wealth.

The racial wealth gap in the United States is an ongoing issue that stems from several facets of society — unlike promises made by the American Dream, minorities do in fact make less money than their white counterparts and experience more difficulty in accumulating wealth over time.

Though the situation is bleak, there are steps that can be taken to narrow the gap. While many solutions involve a reassessment of taxes on income or wealth, the goal ultimately becomes ensuring children who come from low-income families receive equitable resources and opportunities to achieve future economic success.