Addressing Our Growing Racial Wealth Gap

In a welcome shift from typical race reportage, this Colorlines video series examines structural inequities influencing the lives of black men. As part of the series, Imara Jones and Tatiana Lam produced “A Concise History of U.S. Divestment in Black Men,” which outlines exactly how bad policy decisions left black men out of any economic progress made over the years.

At Demos, we agree. Policies do drive outcomes. For all Americans to have an equal chance in our economy, past policies that have widened the racial wealth gap must be closely examined and in the future, reimagined.



An ISAP policy brief outlines the biggest drivers of the racial wealth gap:

  • Years of home ownership
  • Household income
  • Unemployment which is much more prominent amongst African-American families
  • A college education
  • Inheritance, financial support by family or friends and preexisting family wealth

According to Race Forward, two-thirds of our media’s news coverage surrounding race tends to focus on individual instances of racism, a statistic they arrived at after compiling and systematically breaking down 1200 news articles from last year. They also found that one of the biggest traps news outlets fall into when it comes to reporting on race is their focus on individuals rather than systems even though the racial wealth gap in America today is worse than South Africa’s under apartheid. This is perhaps because anecdotes of racism are the easiest to recognize as well as the simplest to focus on and sensationalize.

The pervasiveness of these narratives in public discourse is also why individual stories of transcending racism and economic success are often used as proof that racism must not exist and that upward mobility must. We have a black president and Oprah is the richest woman in America so what’s all the fuss about? These successes or examples of economic prosperity contribute to the dangerously flawed narrative that everybody has an equal chance in our economy; if one person of color can make it, so can the rest of the community.

Our recent publication “The Racial Wealth Audit: Measuring How Policies Shape The Racial Wealth Gap” indicates:

The racial wealth gap, defined as the difference in median wealth holdings between groups by race or ethnicity, has consistently shown that typical white households hold multiple times the wealth of their African American and Latino peers. Today, the typical white household owns $8 in wealth for every $1 owned by African American and Latino households.

What’s left out of public discourse is systemic racism: past policies and resulting discriminatory practices in schools, workplaces and government agencies that routinely produce unjust outcomes for people of color widening the wealth gap.

What we have created is a society where communities of color are allowed to occupy some spaces, to vote, to have political rights, all substantial victories achieved by the civil rights movement of the ’60s. But these victories were largely in legal, political and to some extent in economic domains. With the narrative of multi-culturalism, talented people of color were allowed to rise within social, political and at times even economic institutions. The idea being that economic structures need not be changed if some people of color were able to achieve varying degrees of economic success. Vijay Prashad talks more about this as part of the counter-culturalist series currently running at The Asian American Writers Workshop. As Aziz Rana summarizes:

Prashad rejects contemporary cliches of diversity, multiculturalism, and post-racialism—his work pushes us beyond romanticized notions of racial, social, economic and gender-based ‘progress’ to illuminate the structural inequalities that define the daily lived experiences of marginalized peoples…

Demos emphasizes enhancing an analytic focus on the role of policy in shaping the racial wealth gap and introduces a policy analysis tool. The Racial Wealth AuditTM essentially provides the information necessary to identify and promote public policy decisions that overcome discrimination and the barriers to wealth accumulation rooted in history.

Enhancing an analytic focus on the role of policy in shaping the racial wealth gap will allow policymakers and researchers to make informed decisions about policies that may impact the gap, regardless of whether the policy has an explicit aim to affect wealth disparities.

Most policy development doesn’t involve an evaluation of the outcomes on racial and ethnic wealth disparities. The Racial Wealth AuditTM is the first research and measurement tool to bring racial and ethnic wealth analyses to the forefront of policy discussions. What’s more: the Racial Wealth AuditTM  can be used to compare several policy iterations within the framework of a broader policy proposal.

A shift in the way public policies are evaluated, formulated and discussed needs to reflect an awareness of structural inequalities that have worsened over the years due to bad policy decisions if we are serious about closing the racial wealth gap. Colorlines has taken note. Others should too.

How then do we make policies that don’t perpetuate issues of inequity?


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