Author Topic: White Families Have 20 Times the Wealth of Black Families  (Read 755 times)

Offline Reginald Hudlin

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White Families Have 20 Times the Wealth of Black Families
« on: July 31, 2011, 07:58:51 am »
White Families Have 20 Times the Wealth of Black Families: How Racism's Legacy Created a Crushing Depression In Black America
 
That wealth gap has widened into a yawning chasm in recent years. In 2007, white families, on average, had 10 times the accumulated wealth of black families earning the same amount. That was significant, but then, between 2005 and 2009, the average white household's wealth dropped by 16 percent, while the average black family's dived by 52 percent, and, as the New York Times reported, by 2009, the “median wealth of whites [was] 20 times that of black households.” As a result, we now have “the largest [racial] wealth disparities in the 25 years that the [Census] bureau has been collecting the data.”

It’s crucial to understand the relationship between wealth accumulated over generations and one's economic prospects today. Central to that relationship is the concept of “intergenerational assistance.” That’s a fancy way of saying that a person’s chances to advance economically are very much impacted by whether his or her family can help get him or her started on the path to prosperity.

Think of the difference it makes when a young couple’s parents can give them a down payment on their first home—that couple starts building equity right out of the starting gate, instead of throwing away money on rent. Small businesses don’t begin with a good idea; they begin with an idea and start-up capital. If you’re already established, you can get that cash from a bank or find an investor. Before then, your best chance is to hit up your family for a loan. The wealthy don’t pass on their status to their kids through inheritance alone; they also do it by smoothing the way for their children's ascent to the top of the pile.