Since the start of slavery, racism has cost Black Americans an estimated $70 trillion. Today, due to centuries of discrimination, the racial wealth gap between Black and white Americans is cavernous. The Brookings Institution has estimated that Black Americans own about one-tenth U.S. wealth compared to white Americans — $17,150 for Black families compared to $171,000 for white families.
The gap persists at every income level and it goes without saying that this is bad for Black families and individuals. But this type of racial inequality is bad for the broader US economy, too.
What do Americans need to know to dissolve the racial wealth gap?
Closing the gap will take more than simply transferring wealth to Black Americans (in the form of reparations and otherwise); it also requires dismantling the underlying structural inequalities that preserve the racial wealth gap — things like lending practices that lead to discriminatory denials for home and business loans, or persistent undervaluing of homes in Black neighborhoods.
Shawn Rochester, author of “The Black Tax: The Cost of Being Black in America,” is available to walk you through his new economic framework for transferring wealth to the Black community. Known as PHD: purchase, hire, deposit, the idea is to “create jobs, create and expand businesses, and provide capital in the Black community.”
As we approach National Financial Awareness Day on August 14th, I’d love to connect you with Mr. Rochester for an in-depth conversation that covers what “the black tax” is and its effect on the Black community while also tackling the financial principles and practices needed to build a solid financial future starting now that will last for generations.