An economy that’s rigged to benefit the richest 1% has left most of America behind. While wages for workers have remained flat for decades, expenses for health care, housing, and most basic needs have risen. Alongside record concentrations of income and wealth at the top, America’s racial wealth divide has persisted – or worsened.
As people of color make up a larger share of the diversifying US population, that persistent racial wealth divide is bringing down America’s median wealth. But while wealth at the middle falters, it’s skyrocketing at the top.
In other words, the 1% are profiting off ongoing racial economic inequality.
All this is happening against a backdrop of seemingly good economic news. Black and Latino unemployment rates reached historic lows in 2018, and median income has slowly inched up for all households in the last few years.
But measures of wealth – what you own minus what you owe – tell a very different story. Those were our findings in Dreams Deferred, a new study on the racial wealth divide for the Institute for Policy Studies.
Since the early 1980s, median wealth among Black and Latino families has been stuck at less than $10,000. The median Black family today owns $3,600 – just 2% of the $147,000 of wealth the median white family owns. The median Latino family has assets worth $6,600 – just 4% of the median white family.
In other words, the median white family has 41 times more wealth than the median Black family and 22 times more wealth than the median Latino family.
“Median wealth” refers to the household at the exact middle of wealth distribution – with half of households above and half below. That’s different from “average wealth”, which skews the numbers by including the wealth of the richest 1%. (Average white wealth, for example, was $930,000 in 2016. But the ordinary white person isn’t close to being a millionaire.)
Changes in median wealth give us a multi-decade understanding of economic security and well-being. Since 1983, median wealth for all US households declined by 3%, adjusting for inflation. Over this same period, the median Black family saw their wealth drop by more than half.
Meanwhile, the number of households with $10m or more skyrocketed by 856%.
If the trajectory of the past three decades continues, by 2050 the median white family will have $174,000 of wealth, while Latino median wealth will be just $8,600 – and Black median wealth will head downward to $600. In fact, the median Black family is on track to reach zero wealth by 2082.
While the middle stagnates and the very top skyrockets away, there’s also surging growth at the bottom end of the spectrum.
A growing number of households are “underwater” when it comes to wealth. The proportion of all US households – of any race – with zero or “negative” wealth (meaning their debts exceed the value of their assets) has grown from 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% of Black families and 33% of Latino families have zero or negative wealth, compared to just 15.5% of white families.
These racial wealth divisions are damaging to the economy as a whole. Low levels of Black and Latino wealth, combined with their growing proportion of the population, are a significant contributor to the overall decline in American median household wealth.
Meanwhile, efforts to close the racial economic divide have been thwarted by the larger economic inequalities surging through the economy. Billionaire-bankrolled outfits like the Koch network, for example, have invested heavily in politicians that have made the tax code more unequal than ever.
Public policies aimed at reducing both overall inequality and the racial wealth divide in particular will be critical to creating a more equitable economic system. Such policies could include the expansion of first-time homeownership programs and the creation of a “baby bond” program, to seed an asset account for each newborn.
But we also must address the overall challenges of inequality with policies to raise the minimum wage and expand health care, while taxing the 1% to fund education and infrastructure that create an economy that works for everyone, not just the super-rich.
Dedrick Asante-Muhammad and Chuck Collins are co-authors of the report, with Josh Hoxie and Sabrina Terry, Dream Deferred: How Enriching the 1 Percent Widens the Racial Wealth Divide, published by the Institute for Policy Studies
- “I imagine you already know that I am much more socialistic in my economic theory than capitalistic… [Capitalism] started out with a noble and high motive… but like most human systems it fell victim to the very thing it was revolting against. So today capitalism has out-lived its usefulness.” – Letter to Coretta Scott, July 18, 1952.
- “In a sense, you could say we’re involved in the class struggle.” –Quote to New York Times reporter, José Igelsias, 1968.
- “And one day we must ask the question, ‘Why are there forty million poor people in America? And when you begin to ask that question, you are raising questions about the economic system, about a broader distribution of wealth.’ When you ask that question, you begin to question the capitalistic economy. And I’m simply saying that more and more, we’ve got to begin to ask questions about the whole society…” –Speech to Southern Christian Leadership Conference Atlanta, Georgia, August 16, 1967.
- “Capitalism forgets that life is social. And the kingdom of brotherhood is found neither in the thesis of communism nor the antithesis of capitalism, but in a higher synthesis.” –Speech to Southern Christian Leadership Conference Atlanta, Georgia, August 16, 1967.
- “Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children.” – Speech to the Negro American Labor Council, 1961.
- “We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values and other things. We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed. America is a hypocritical nation and [we] must put [our] own house in order.”– Report to SCLC Staff, May 1967.
- “The evils of capitalism are as real as the evils of militarism and evils of racism.” –Speech to SCLC Board, March 30, 1967.
- “I am now convinced that the simplest approach will prove to be the most effective – the solution to poverty is to abolish it directly by a now widely discussed matter: the guaranteed income… The curse of poverty has no justification in our age. It is socially as cruel and blind as the practice of cannibalism at the dawn of civilization, when men ate each other because they had not yet learned to take food from the soil or to consume the abundant animal life around them. The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.” – Where do We Go from Here?, 1967.
- “You can’t talk about solving the economic problem of the Negro without talking about billions of dollars. You can’t talk about ending the slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because you are messing with folk then. You are messing with captains of industry. Now this means that we are treading in difficult water, because it really means that we are saying that something is wrong with capitalism.” – Speech to his staff, 1966.
- “[W]e are saying that something is wrong … with capitalism…. There must be better distribution of wealth and maybe America must move toward a democratic socialism.” – Speech to his staff, 1966.
- “If America does not use her vast resources of wealth to end poverty and make it possible for all of God’s children to have the basic necessities of life, she too will go to hell.” Speech at Bishop Charles Mason Temple of the Church of God in Christ in support of the Memphis sanitation workers’ strike on March 18th, 1968, two weeks before he was assassinated.
GOP lawmaker actually claims that whites were lynched in ‘nearly equal numbers’ to blacks ‘for being Republican’
On Monday, a GOP state representative in Colorado decided to celebrate Martin Luther King Day by posting a video to Facebook from the state House floor, during which she shared…
“We have come a long way on that arc since the reconstruction, when whites and blacks alike were in nearly equal numbers lynched for the crime of being Republican,” said Rep. Lori Saine, who originally gave the speech on Friday:
Saine claims that she gave the speech in part to protest to the chamber’s refusal to allow a fellow Republican, Rep. Perry Buck, to consider her resolution honoring Dr. King, which she claims was because the civil rights icon “didn’t represent her heritage.” Both Saine and Buck, however, were permitted to cosponsor the resolution put forth by Democratic Reps. Jovan Melton and Leslie Herod.
Saine is badly wrong on the facts of lynching. According to the NAACP, of the 4,743 recorded lynchings between 1882 and 1968, 72.7 percent of victims were black.
Additionally, it is wrong to say that these people were lynched for “being Republican” — they were mostly lynched for pursuing or supporting black civil rights, or to send a message to those who did. Many of them may well have been Republicans, which in the Reconstruction era was the party pushing civil rights. But the party has a substantially different membership base and platform today than it did back then.