During the Great Recession, the wealth gap between whites and African-Americans nearly doubled, leaving white with nearly 22 times as much in household wealth. According to a new study from Brandeis University’s Institute on Assets and Social Policy, this merely exacerbated a much longer trend during which the wealth of whites exploded while that of African-Americans stagnated:
In 2009, a representative survey of American households revealed that the median wealth of white families was $113,149 compared with $6,325 for Latino families and $5,677 for black families.
Looking at the same set of families over a 25-year period (1984-2009), our research offers key insight into how policy and the real, lived-experience of families in schools, communities, and at work affect wealth accumulation. Tracing the same households during that period, the total wealth gap between white and African-American families nearly triples, increasing from $85,000 in 1984 to $236,500 in 2009.
The report shows that the disparity is driven by “policy and the configuration of both opportunities and barriers in workplaces, schools, and communities that reinforce deeply entrenched racial dynamics in how wealth is accumulated.” For instance, whites are far more likely to receive familial assistance when buying a home (due to previously accumulated wealth), therefore allowing them to purchase a home earlier and hold it for longer. They are also more likely to live in a place where home equity rises more quickly. The same familial advantages allow whites to graduate college with far less student debt. All of this compounds on an already existing disparity, making it that much harder for African-Americans to catch up.