black wealth statistics, black economic issues
A person wealth is the value of all their assets minus their debt (Global policy solutions, 2014)[1].
Assets include life insurance, pensions, cash-on-hands, retirement plans, bank accounts, home, land, stocks, and bonds. Etc
In the United States and almost everywhere in the world, Black and brown people are at the bottom of the table in terms of wealth distribution. The US federal reserve board survey (2019) tells us that Black people have a median household wealth of $24,100 while Whites have a median of $188,200.
This staggering economic disparity has been a problem since the country’s establishment and is only getting worse. In the past 10 years, median Black wealth has decreased by 66%.
In addition to this problem systemic racism prevents Blacks from accumulating wealth in the first place.
To combat this alarming trend and increase Black economic stability across all social classes it is imperative to take steps to educate black populations on financial literacy and provide them with more access to resources.
Global policy Solution / Racial wealth Gap
Section 1: The Current Status of Black Wealth – (Case study: USA)
The wealth gap in America is larger than ever, and it’s not getting any smaller.
The average white family has 16 times the wealth of the average black family, and 18 times that of the average Latino family. We can see the wealth disparity has been accelerating, but this is not new.
According to the Federal Reserve, black Americans have recently lost half of their wealth in just two generations. This is a devastating statistic because it means that even when blacks are working hard, they are still less likely to accumulate wealth.
This gap has existed for decades and results from a variety of factors: low education levels, high unemployment rates, income inequality, lack of access to traditionally wealthy neighbourhoods and jobs, and discriminatory lending practices.
It’s clear that we need to act now if we want to close this gap. But how? What can be done? And what will the future hold for black wealth?
Section 2: What the Future Holds for Black Wealth
Black wealth is on the rise. Black people are making more money than ever before and more of them are receiving inheritances for the first time in centuries.
Yet, while their bank accounts are growing, they’re not saving enough to protect what they’ve earned.
As an illustration the number of African Americans with at least $1 million in assets grew by 52% between 2005 and 2015, according to research from the Pew Charitable Trusts.
Nevertheless, these investors aren’t saving enough to protect their wealth -39% of black millionaires surveyed said they had less than $100,000 in liquid assets.
Black people are less likely to have a financial safety net in place in the event of an emergency. This is because for generations, they were unable to build wealth because of the barriers that existed when it came to employment, education, and housing.
Section 3: Steps to close the gap
There are four rules that minority groups need to follow to build wealth.
The first is ensuring they have a diversified investment portfolio, not just investing in stocks, but also in bonds and real estate.
Second, is saving early and often as possible by depositing a certain percentage of their income into long-term savings accounts.
Third, investing time by learning about finances and how money works.
Finally, if achievable it is advised to have a financial advisor who can assist with investments decisions.
Additionally, governments should put in place structured wealth-building policies to address the racial wealth gap (Global policy solutions, 2014).
Section 4: Conclusion
Anecdotal evidence points to not much progress in the wealth gap, while more comprehensive data reveals some hopeful trends.
The black American community is one of the most economically insecure communities in America and elsewhere. For example, African Americans still earn less than $40K on average while whites earn $60K on average. Black wealth continues to be surpassed by white wealth and overall economic mobility is retarded by institutional racism.
Despite recent statistics that show that some improvement has been made in the economic mobility of African Americans, there are still many disparities when it comes to education, health care access and employment rates.
However, there have been several studies analysing the role of race in building wealth, the conclusion being that despite these disadvantages, African Americans still manage to build wealth at a rate that is comparable to Whites.
The current black wealth statistics are very concerning, but there is hope for the future. To improve the current situation, we need to increase the power of minority-owned businesses.
If they succeed, this will help provide jobs and generate revenue which can then be used to invest in other minority-owned businesses.
