Excerpt from Josh Hoxie, in Newseek, Dec 2017
Wealth, the basic measure of how much a family owns minus how much they owe, is concentrating in fewer and fewer hands — and those hands happen to be overwhelmingly white.
A report I co-authored, The Road to Zero Wealth, shows that the typical black family saw an inflation-adjusted decrease in their household wealth from $6,800 in 1983 to just $1,700 in 2013. Over the same period, the typical white family household wealth increased from $102,200 to $116,800.
Our report predicts that if that 30-year trend continues, median black family wealth will decrease to zero by 2053 — a single generation from now.
The next generation could look very different if Democrats prioritize the economic concerns of the community most responsible for sending Alabama’s Doug Jones to the Senate.
More than nine out of ten black voters cast their ballot for the Democrat, and turnout among black Alabamans was greater than any special election in state history.
This happened despite significant and well-documented efforts to suppress voter turnout in the state.
If congressional Democrats have any success in blocking the harmful economic policies put forth by Donald Trump, it’ll be largely thanks to these black voters in Alabama — who just tightened the GOP’s already slim Senate majority down to 51-49. But simply blocking bad policy isn’t enough.
Democrats should champion programs that promote black homeownership and a strong social safety net for low-wealth families. (Republicans, for their part, could become a less lily-white party by taking the same advice, although their willingness to do so at present appears remote.)
Homeownership, a key benchmark in financial security, is heavily skewed along racial lines. Seven in ten white families own their own homes, compared to just four in ten black families.
A recent study from the Institute on Assets and Social Policy at Brandeis University showed that the biggest current public subsidy for homeownership — the home mortgage interest deduction — overwhelmingly benefits white households, wealthy ones in particular.
The study shows that while black households make up 13 percent of the population, they receive just 6 percent of the benefits of the deduction. That effectively costs $4.8 billion in lost housing investments for black families.
As Matt Bruenig and Ryan Cooper of the People’s Policy Project point out in a recent report, electing Democrats — including the first black president, for that matter — has not guaranteed policies that benefit for black families.
They point out that black home equity dropped by $16,700 on average over the Obama years, largely the result of housing policies put in place to protect financial institutions at the expense of homeowners.
The racial wealth divide is driven by public policy, not by individual actions.
Some of this public policy is historical. Just 2 percent of subsidized Federal Housing Administration home mortgages issued in the wake of World War II went to non-whites, for just one example. Some is current, like the racially skewed home mortgage interest deduction.
Congress has the opportunity to pivot towards addressing the racial wealth divide rather than continuing to oversee its expansion.
They should start by doing no more harm and scrapping the Trump tax cuts — a gift to the ultra-wealthy at the expense of everyone else, which would only make our growing economic inequality worse.
But beyond that, poor Americans and people of color deserve a bold vision for restructuring the economy to benefit the low-wealth families who’ve been left behind.
It’s time to stand up for a serious and straightforward agenda that addresses rising racial inequality head on.
Josh Hoxie directs the Project on Taxation and Opportunity at the Institute for Policy Studies. He’s a coauthor of the 2017 study “The Road to Zero Wealth: How the Racial Wealth Divide is Hollowing Out America’s Middle Class.”