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one in six in 1983 to one in five households today. Families of color are much likelier to be in this precarious financial situation: 37 percent of Black families and 33 percent of Latinx families have zero or negative wealth, compared with 15.5 percent of White families. By 2060, the combined Black and Latinx percentage of the population is expected to rise to 42.5 percent. Low levels of Black and Latinx wealth, combined with their growing proportion in the population, are a significant contributor to the overall decline in American median household wealth. Plainly, these racial wealth divisions are damaging to the economy as a whole.

HOW THIS HAPPENED This disturbing inequity was no accident. It’s the result of systemic factors and deliberate government policies — both past and present. In the overall economy, the growing shift of financial rewards to capital investors, and away from workers, is a key culprit. This creates an increasingly regressive economy that leaves those with few assets further and further behind. The racial wealth divide, of course, has its own deeply rooted causes. Historically, the divide was maintained even when the economy was going strong and we had progressive investments in lower-income and working-class people. This racial divide was maintained by excluding African-Americans and other communities of color from public investments. For example, a generation of White families were able to purchase their first home between 1946 and 1966 with government-subsidized mortgages such as those provided by the Farmers Home Administration, Veterans Administration, and Federal Housing Administration insurance programs. People of color were almost entirely excluded from these mortgage programs — and so lost a generation or more of opportunity to build wealth. Past discriminatory housing policies continue to fuel an enormous racial divide in homeownership rates. Meanwhile, an upside-down tax system helps the wealthiest households (who are overwhelmingly White) get wealthier while providing the lowest-income families (who are disproportionately people of color) with almost nothing.

The 400 wealthiest Americans now have a combined wealth equal to that of nearly two-thirds of the US population. Just three of those billionaires — Jeff Bezos, Warren Buffett, and Bill Gates — have as much wealth as the entire bottom half of US households combined.

The median White family now has 41 times more wealth than the median Black family, and 22 times more wealth than the median Latinx family.

WHAT CAN BE DONE Building an inclusive middle class hinges on our ability to adopt targeted and effective programs that address the specific needs of low-wealth communities. This approach will strengthen the American middle class as a whole and make our middle class much more racially and ethnically inclusive. Such policies could include the expansion of first-time homeownership initiatives for those who were denied access

The median Black family is on track to reach zero wealth by 2082.

CONSCIOUS COMPANY MAGAZINE

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Q2 / SPRING 2019

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Profile for Conscious Company

Conscious Company Magazine | Spring 2019  

The Q2/Spring 2019 issue of Conscious Company is all about the racial wealth gap, diversity as a competitive differentiator, game-changing f...

Conscious Company Magazine | Spring 2019  

The Q2/Spring 2019 issue of Conscious Company is all about the racial wealth gap, diversity as a competitive differentiator, game-changing f...