By Mikel Kwaku Oshi Holt
If you’re waiting for the wealth disparity between Blacks and Whites to change anytime soon, you have a looooooong wait!
A new study provides a timetable for when Black Americans will reach economic parity with White America.
Unfortunately, you won’t live to see that day. Nor will your children. Or their children. Or theirs.
According to the new report, it will take 228 years for a Black family to accumulate the same wealth as a White family, and that is if the “average Black family” wealth continues to grow at the same pace it has over the past 30 years.
Yes, you read that correctly. It will take us two and a quarter centuries to catch up to our White counterparts. That’s 83,220 days or 11,856 weeks, whichever calculation rocks your boat.
The report, “The Ever-Growing Gap: Without Change, African-American and Latino Families Won’t Match White Wealth for Centuries,” provides an eye-opening analysis of where Black and Hispanic Americans are on the economic ladder as compared to White America.
Our situation is not by happenstance. Institutional racism was a defining factor in creating the wealth gap, but so was a desire by the few to control the resources of the many.
Like it or not, that’s the essence of capitalism, the economic system that undergirds our experiment in democracy, and brought us slavery, apartheid and a permanent underclass.
It is the system that has resulted in less than one percent of the population controlling most of the country’s wealth.
In an article published by Diversity Inc., the author of the report, Chuck Collins, said Black America would reach economic parity with White America, “if we stay on the current trajectory, with modest gains in average Black wealth, we (Black America) will not attain racial wealth parity (for 228 years).
“Wealth is a multi-generational measure of well being,” he explained. “Wealth, what you own minus what you owe, is where the past shows up in the present—where the legacy of racial discrimination in wealth building is reflected in people’s bank accounts.”
Using data from the Federal Reserve’s Survey of Consumer Finances, the investigators analyzed wealth accumulated data and trends during a 30-year period, from 1983-2013.
The analysis provides projections about trends during the next three decades.
Interestingly, the report surmises that Hispanic families will accrue wealth equal to Whites in about 84 years.
That’s not surprising given that the federal data does not include the financial status of illegal aliens, but does factor in people who speak Spanish as a first or second language. That means, I assume, Whites with Spanish surnames and the ability to avoid discrimination as a result of their appearance and articulation.
That is in sharp contrast to projections for Black America, particularly given that White wealth has grown by 84% over the last three decades, which is three times the rate of growth for African American families.
Put into numbers even Donald Trump (who thinks he is going to get 27% of the Black vote) can understand; while White households average wealth will increase $18,000 during the next 30 years, Black households will see an increase of only $750.
White households have an average wealth of $656,000, compared to Latinos, $98,000, and Black households, $85,000, Collins revealed.
So, what will the economic disparity picture look like in 2043 when it is projected that America will become a majority minority country?
The report theorizes the gap between White and Black wealth will have doubled!
Black wealth in 2043 will average $107,950 and Latino wealth is estimated to be $165,620. The average wealth of White families will be $850,030.
And we’re not talking about the handful of White basketball players either. The report is talking about the Whites who barricade their suburban communities to stop the spill over of crime, and the folks who listen to Charlie Sykes on the radio.
In the Diversity Inc., article, Collins called that disparity a “human and policy created disaster.”
He also pointed a finger at political decisions—or indecisions—that facilitated the disparity.
Housing policies in the 1940s were orchestrated to widen the economic gap between White and minority households. But it wasn’t entirely racial, as the policies also benefitted the wealthiest at the expense (no pun intended) of the poor.
If you don’t know, one of the most significant wealth building investments a person can make is homeownership. If you recall our local history, the open housing marches of the 1960s were waged to end legalized segregation and housing covenants that restricted Black Milwaukeeans from building homes of value in areas beyond the ghetto.
Insurance redlining was another impediment to upward mobility, and thus wealth building.
“The U.S. government has actively promoted homeownership, especially since the mid-1940s,” Collins explained, “with substantial tax incentives and subsidies. As a result, between 1940 and 1965, the homeownership rate went from about 45% to over 65%.
“Because of racial discrimination in mortgage lending and residential segregation, Black and Latino Americans were unable to take advantage of these major wealth-building programs.”
The wall built around Milwaukee’s central city, and the redlining was not unique to Brewtown.
Various reports, including one by the National Community Reinvestment Coalition, reveal policies similar to what Milwaukee experienced around the country. In essence, Jim Crow married Auntie Apartheid to keep us powerless and poor and shut the barnyard door behind them.
“Whites got the express train to wealth, with homeownership rates today of 72%,” Collins explained. “Meanwhile, the homeownership rate for Black (Americans) is 41%.”
And a large percentage of homes owned by Black Americans are less expensive, thus reducing attainable wealth.
While I’m sure Collins didn’t vote for socialist Bernie Sanders for president, he does believe a remedy to systemic racism is to “redirect the massive wealth building subsidies that currently exist.”
“The government spends billions of dollars to help individuals build wealth.
“(Last year), we spent $660 billion in tax breaks for homeownership, retirement incentives, college savings and more. The problem is most of the benefits of these subsides flow to those who already have substantial wealth.”
As an example, Collin offered “someone with $1 million in income will get $147,000 in tax breaks while a family with $50,000 annual income will receive $174 in benefits.”
Collins notes several federal programs that reinforce the housing investment gap, programs that have been fortified by Republicans and Democrats since the Civil War. And not by coincidence, all congressmen are wealthy, even Sanders. And despite their rhetoric, are not working hard to have the majority of Black people join them at the country club. And if you can’t figure that out, remember Democrats created Obamacare and then passed a law to exclude them from it.
He suggests capping the deduction and redirecting the incentives to those who have been historically excluded from wealth and asset building programs.
“These subsidies are upside down,” he asserted.
“I hope that there is a majority in Congress—after the fall elections—(receptive to) an evidence-based approach to understanding what policies reduce racial wealth disparities and which worsen them.
Of course, that sounds too much like right given today’s political climate and tomorrow’s reality.
Why? In truth both parties are aware of the disparities. But the Republicans—the party of the rich—are proponents of the status quo. And Democrats, the party of poverty, get their support from special interests that make their livings off poor people.
And in truth, even if the politicians worked as hard for the poor as they do for themselves by changing laws and policies as Collin’s suggest, there are a myriad of other factors that contribute to the wealth disparity besides housing.
The figures are somewhat skewered by the fact that less than one percent of Whites own nearly 70% of America’s wealth.
And even Bernie Sanders would not have been able to orchestrate a direct redistribution of wealth.
Vestiges of apartheid, frequently and numerous obstacles to the success of Black businesses and a Black unemployment rate that is three times that of Whites also contribute to the wealth disparity.
Black homeownership peaked during the height of our industrial boom. The closing of major factories in Milwaukee in the 1970s saw a proportionate loss of middle class jobs, and resulted in the destabilization of the Black community.
And lastly, and probably more important—or at least significant—is the impact of far too many in our community subscribing to the philosophy inherent in the “culture of poverty.”
That culture is reinforced by poor educations, financial illiteracy and family dysfunctionality. That latter factor provides a rarely acknowledged but critical explanation for the poverty dilemma: Black poverty is directly linked to the absence of Black men—preferably husbands—in the households.
Two incomes, even at a preferred minimum wage of $15 per hour, would make a family “middle class,” economically if not culturally.
That’s the double-edged sword that contributes to the purest example of wealth disparity in this country. When Black men were kicked out of the home in the 1970s, Uncle Sam moved in.
More next week.
By Mikel Kwaku Oshi Holt