The Racial Wealth Divide in Trump’s America

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(Photo: Ellie / Flickr)

The majority of Black and Latino voters didn’t pull the lever for Donald Trump last November. He is, however, the president — and thus has the power to leave a lasting effect on the trajectory of their lives.

Trump has recently made headlines for making significant reversals in policy positions on issues ranging from immigration to the national debt ceiling. Perhaps, he could change his tune on how he addresses the growing racial wealth divide as well.

Will the already deep racial wealth divide grow wider under Trump, or can we begin to close it?

Recently released figures from the Census Bureau show that Black and Latino families saw a slight uptick in their household income last year. They still lagged far behind White families — with median households earning more than $ 10,000 less than their White counterparts. The racial income gap did get a bit smaller over the very short term.

Unfortunately, the long term trends go in the other direction.

A just released report I co-authored titled “The Road to Zero Wealth” looks at trends in household wealth, which includes the total sum of a families’ assets minus their debts. Wealth, not income, is the better measure of long-term financial stability.

The median Black family today has just $ 1,700 in wealth, with Latino families not far ahead at just $ 2,000. White families, meanwhile, own more than $ 100,000. That gap is staggering.

And it’s getting worse.

The report looks at racial wealth data over the past 30 years to project what we can expect in the future if current trends continue. By 2020, the end of Trump’s first term, median Black and Latino households stand to lose nearly 18 percent and 12 percent of the wealth they held in 2013, respectively.

Median White household wealth, on the other hand, looks set to increase 3 percent.

At that point, White households will own 85 times more wealth than black households, and 68 times more wealth than Latino households. That’s in just three years — let that sink in for a moment.

Looking a bit further into the future, Black families are projected to own no wealth at all by 2053. By that point, our country will be majority non-White, but Whites and non-Whites will be farther apart than ever.

That’s assuming nothing changes. If Trump moves forward with the policies he campaigned on, especially his tax “reform” plan, the gap surely grows.

Trump’s tax plan is heavily skewed toward providing massive tax breaks for the ultra-wealthy. Half of the proposed cuts will go to millionaires, according to the Institute on Taxation and Economic Policy. Less than 5 percent go to families with household incomes below $ 45,000.

Perhaps more insidious is Trump’s plan to eliminate the federal estate tax, also known as the inheritance tax. This levy applies exclusively to the wealthiest 0.2 percent of households and is intended to curtail the growing concentration of wealth in families like, say, the Trumps.

Fortunately, the president has other options. He could choose to expand, rather than abolish, the estate tax.

He could also address the deep disparities in homeownership — and particularly in the mortgage interest deduction in the tax code, which benefits the wealthy and those who already own a house. Thanks to generations of discrimination in housing and credit, black families trail whites in homeownership by a margin of over 30 percent.

Unfortunately, it’s unlikely Trump changes course. While the president is nothing if not mercurial, his commitment to protecting the wealth of the already wealthy has remained steadfast.

That the vast majority of the nation’s wealth is, and always has been, held in predominantly white hands at the expense of non-whites hasn’t concerned him. Perhaps, however, he’ll change his mind.

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Racial Inequality Is Hollowing Out America’s Middle Class

Kenneth Worles Jr. / Institute for Policy Studies

America’s middle class is under assault.

Since 1983, national median wealth has declined by 20 percent, falling from $ 73,000 to $ 64,000 in 2013. And U.S. homeownership has been in a steady decline since 2005.

While we often hear about the struggles of the white working class, a driving force behind this trend is an accelerating decline in black and Latino household wealth.

Over those three decades, the wealth of median black and Latino households decreased by 75 percent and 50 percent, respectively, while median white household wealth actually rose a little. As of 2013, median whites had $ 116,800 in wealth — compared to just $ 2,000 for Latinos and $ 1,700 for blacks.

This wealth decline is a threat to the viability of the American middle class and the nation’s overall economic health. Families with more wealth can cover emergencies without going into debt and take advantage of economic opportunity, such as buying a home, saving for college, or starting a business.

We looked at the growing racial wealth gap in a new report for the Institute for Policy Studies and Prosperity Now.

We found that if these appalling trends continue, median black household wealth will hit zero by 2053, even while median white wealth continues to climb. Latino net worth will hit zero two decades later, according to our projections.

It’s in everyone’s interest to reverse these trends. Growing racial wealth inequality is bringing down median American middle class wealth, and with it shrinking the middle class — especially as Americans of color make up an increasing share of the U.S. population.

The causes of this racial wealth divide have little to do with individual behavior. Instead, they’re the result of a range of systemic factors and policies.

These include past discriminatory housing policies that continue to fuel an enormous racial divide in homeownership rates, as well as an “upside down” tax system that helps the wealthiest households get wealthier while providing the lowest income families with almost nothing.

The American middle class was created by government policy, investment, and the hard work of its citizenry. Today Americans are working as hard as ever, but government policy is failing to invest in a sustainable and growing middle class.

To do better, Congress must redirect subsidies to the already wealthy and invest in opportunities for poorer families to save and build wealth.

For example, people can currently write off part of their mortgage interest payments on their taxes. But this only benefits you if you already own a home — an opportunity long denied to millions of black and Latino families — and benefits you even more if you own an expensive home. It helps the already rich, at the expense of the poor.

Congress should reform that deduction and other tax expenditures to focus on those excluded from opportunity, not the already have-a-lots.

Other actions include protecting families from the wealth stripping practices common in many low-income communities, like “contract for deed” scams that can leave renters homeless even after they’ve fronted money for expensive repairs to their homes. That means strengthening institutions like the Consumer Financial Protection Bureau.

The nation has experienced 30 years of middle class decline. If we don’t want this to be a permanent trend, then government must respond with the boldness and ingenuity that expanded the middle class after World War Two — but this time with a racially inclusive frame to reflect our 21st century population.

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Honor Juneteenth by Closing the Racial Wealth Divide

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(Image: Khalil Bendib / OtherWords.org)

On June 19, 1865, Union soldiers arrived in Galveston, Texas. They carried some historic news: Slavery had finally and completely ended, they declared. All of America’s enslaved people were now free, some two and a half years after President Lincoln’s Emancipation Proclamation.

That day in June would soon become “Juneteenth,” a holiday still celebrated in communities across the United States.

African Americans have now been free from slavery for over 150 years. Over the course of those years, the United States has made some appreciable and even impressive progress. In 1964, passage of the Civil Rights Act toppled Jim Crow. A year later, the Voting Rights Act challenged discriminatory voting laws.

We’ve even seen the election — and re-election — of the nation’s first black president.

So why, amid all this progress, does the Juneteenth holiday still resonate so powerfully for so many Americans?

Because Juneteenth reminds us how far we have yet to go. Racial inequality remains one of the top issues of our time. Black households, research shows, continue to lag economically behind their white counterparts, in both income and wealth.

Last summer, the Institute for Policy Studies and the Corporation for Enterprise Development explored that inequality in a report called the The Ever-Growing Gap, which focused on the essential role wealth plays in achieving financial security and opportunity.

Over the past 30 years, the report found, the average wealth of white families grew at three times the rate of growth for black families. If those trends continue, black families would have to work another 228 years to amass the amount of wealth white families already hold today.

That’s almost as long as the 245 years that legal slavery stained colonial America.

Over the course of those years, slave labor built the backbone of America’s economy — and gave white families a 245-year head start on building household wealth and overcoming economic insecurity.

Juneteenth helps us remember this history — and we need to remember.

The conventional narrative around wealth building in America simply ignores slavery and its aftermath. Those with more than ample wealth, the narrative goes, fully merit what they have. And others merit less.

“Most people look at the story of inequality through the lens of deservedness: People get what they deserve,” writes my colleague Chuck Collins in his book Born on Third Base.

The standard narrative, he says, implies “that people are poor because they don’t try as hard, have made mistakes, or lack wit and wisdom.” And the rich, the same story goes, have worked “harder, smarter, or more creatively.”

This “deservedness” narrative never acknowledges the discrimination and other barriers that have blocked black economic progress, or the public policies that have kept these barriers intact — things like housing and employment discrimination, mass incarceration, and tax policies that favor the wealthy over poor people of all colors.

It’s time to take a close look at federal policies and the role they play in keeping the growth of black wealth stagnant. This Juneteenth, let’s rededicate ourselves to closing the racial wealth divide.

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U.S. Anti-war, Climate Justice, Racial Justice, Women’s, Immigrant Rights, Economic Justice Movement Leaders All Oppose Trump’s $54 Billion Increase in Pentagon Budget

FOR RELEASE APRIL 4, 2017

Media Contacts:
Phyllis Bennis, pbennis@ips-dc.org, 202-309-1377
Domenica Ghanem, domenica@ips-dc.org, 202-787-5205

A coalition of leaders in the anti-war, civil rights, immigration, climate,  women’s, and faith movements have come together to denounce Donald Trump’s proposed $ 54 billion increase in the military budget.  The broad-based #No$ 54BillionforWar Campaign includes city-based resolutions against increased military spending.

We are launching this campaign on April 4th, 50 years after Martin Luther King’s profound speech “Beyond Vietnam: A Time to Break the Silence speech,” a speech that recognized the urgent need to end militarism and war. King called for a revolution of values, affirming that “a nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.”

The Trump administration’s budget does exactly that. It takes money from urgent social needs to feed the already-bloated Pentagon budget. It proposes to compensate for the additional $ 54 billion by slashing the budgets of the Environmental Protection Agency (even threatening to shut down its already under-funded environmental justice office), the Department of Health and Human Services (slashing family planning and anti-violence-against-women programs), the State Department (thus privileging war over diplomacy), and foreign aid funds (so that the wealthiest country in human history turns its back on the world’s most desperate).

Full statement and partial list of signatories:

“Our environmental and human needs are desperate and urgent. We need to transform our economy, our politics, our policies and our priorities to reflect that reality. That means reversing the flow of our tax dollars, away from war and militarism, and towards funding human and environmental needs, and demanding support for that reversal from all our political leaders at the local, state and national levels.

We and the movements we are part of face multiple crises.  Military and climate wars are destroying lives and environments, threatening the planet and creating enormous flows of desperate refugees. Violent racism, Islamophobia, misogyny, homophobia and other hatreds are rising, encouraged by the most powerful voices in Washington DC.

President Trump plans to strip $ 54 billion from human and environmental spending so as to increase already massive spending on the military. The plan raises Pentagon spending to well over 60 cents of every discretionary dollar in the U.S. budget — even as Trump himself admits that enormous military spending has left the Middle East “far worse than it was 16, 17 years ago.”  The wars have not made any of us safer.

Washington’s militarized foreign policy comes home as domestic law enforcement agencies acquire military equipment and training from the Pentagon and from military allies abroad. Impoverished communities of color see and face the power of this equipment regularly, in the on-going domestic wars on drugs and immigrants. This military-grade equipment is distributed and used by many of the same private companies that profit from mass incarceration and mass deportation.

Using just a fraction of the proposed military budget, the US could provide free, top-quality, culturally competent and equitable education from pre-school through college and ensure affordable comprehensive healthcare for all. We could provide wrap-around services for survivors of sexual assault and intimate partner violence; replace mass incarceration with mass employment, assure clean energy and water for all residents and link our cities by new fast trains. We could double non-military U.S. foreign aid, wipe out hunger worldwide. The list of possibilities is long.

Instead, the Trump administration plans to take much of their $ 54 billion gift for the Pentagon from the budgets of the Environmental Protection Agency (even threatening to shut down its already under-funded environmental justice office), the Department of Health and Human Services (slashing family planning and anti-violence-against-women programs), from the State Department (thus privileging war over diplomacy), and foreign aid (so that the wealthiest country in human history turns its back on the world’s most desperate).

Among those most desperate are the 24 million refugees who have been forced out of their homes and countries, more than at any time since World War II.  Instead of cruel Muslim bans and cuts to the already meager number of refugees allowed into the U.S., we should be welcoming far more. Alleviating the refugee crisis also means working to end, rather than escalate, the wars that create refugees, and supporting human rights defenders in their home communities.  That means more diplomacy and foreign aid, not more military spending.

With its hundreds of billions of un-audited dollars, the military remains the greatest consumer of petroleum in the United States, and one of the world’s worst polluters. The US needs new green, sustainable jobs across our economy targeted to people facing the highest rates of unemployment and low wages. Military spending results in an economic drain.  Clean energy production creates 50% more jobs than the same investment in military spending.

The U.S. military also serves as a security force protecting the extraction and transport of fossil fuels domestically and from the Middle East and other parts of the world. U.S. military force thus enables the continued assault on the planet and some of its most impoverished inhabitants by ensuring the supply of cheap fossil fuels, all while subsidizing some of the largest corporations in the world.

A December 2014 Gallup poll showed people in 65 nations considered the United States far and away the largest threat to peace in the world.  If the United States was known for providing clean drinking water, schools, medicine, and solar panels to others, instead of attacking and invading other countries, we would be far more secure and face far less global hostility.

We can do this. Reverse the flow. No walls, No War, No Warming!”

Available for interviews:
Phyllis Bennis, New Internationalism Director, Institute for Policy Studies, 202-787-5206 or cell 202-309-1377, pbennis@ips-dc.org
Basav Sen, Climate Policy Program Director, Institute for Policy Studies, 202-787-5215 or cell 202-997-0479, basav@ips-dc.org
Judith LeBlanc, Caddo Tribe, Native Organizers Alliance, 917-806-8775, judithleblanc1@gmail.com

Partial list of signatories*

Michelle Alexander – author of The New Jim Crow
Lindsey Allen – Rainforest Action Network
Olivia Alperstein – Progressive Congress
Medea Benjamin – CODEPINK
Phyllis Bennis – Institute for Policy Studies
Basav Sen – Institute for Policy Studies
John Cavanagh – Institute for Policy Studies
Regina Birchem – Women’s International League for Peace & Freedom
May Boeve – 350.org
Jaron Brown – Grassroots Global Justice Alliance
Peter Buffett – American musician, composer, author and philanthropist
Leslie Cagan    – Peoples Climate Movement NY
Daniel Carrillo –  Enlace
Reece Chenault – US Labor Against the War
StaceyAnn Chin – Poet
Jamie DeMarco – Friends Committee on National Legislation
Michael Eisenscher – US Labor Against the War
Zillah Eisenstein – International Women’s Strike/US
Eve Ensler – V-Day and One Billion Rising
Jodie Evans – CODEPINK
Laura Flanders – The Laura Flanders Show
Jane Fonda – actress & activist
Jeff Furman – Ben & Jerry’s
Dan Gilman –  Veterans For Peace
Eddie S. Glaude Jr. – Princeton University
Rafael Jesús González – poet Xochipilli, Latino Men’s Circle
Stephanie Guilloud – Project South
Saru Jayaraman- Restaurant Opportunities Center United (ROC-United)
Chuck Kaufman – Alliance for Global Justice
Naomi Klein – author, This Changes Everything
Lindsay Koshgarian – National Priorities Project
Judith LeBlanc – Native Organizers Alliance
Annie Leonard – Greenpeace
Mairead Maguire – Nobel Peace Laureate
Kevin Martin – Peace Action and the Peace Action Education Fund
Maggie Martin – Iraq Veterans Against the War
Michael T. McPhearson –  Veterans For Peace
Stephen Miles – Win Without War
Nabil Mohammad –  Arab-American Anti-Discrimination committee
Terry O’Neill – National Organization for Women
C. Dixon Osburn- Center for Justice & Accountability
Rabbi Brant Rosen – American Friends Service Committee
Lukas Ross – Friends of the Earth
Josh Ruebner – US Campaign for Palestinian Rights
Linda Sarsour – MPower
Mab Segrest – Southerners on New Ground
John Sellers – Other 98%
Adam Shah – Jobs With Justice
Thenmozhi Soundararajan – Equality Labs
Kathy Spillar – Feminist Majority
David Swanson – World Beyond War
Mike Tidwell – Chesapeake Climate Action Network
Opal Tometi – Black Alliance for Just Immigration & Co-Founder, Black Lives Matter Network
Rebecca Vilkomerson – Jewish Voice for Peace
Alice Walker – poet and writer
Vince Warren – Center for Constitutional Rights
Cindy Wiesner – Grassroots Global Justice Alliance
Robert Weissman –  Public Citizen
Kimberle Williams-Crenshaw- The African American Policy Forum
Winnie Wong – People for Bernie
Ash-Lee Woodard-Henderson – Highlander Research & Education Center
Ann Wright – Veterans for Peace
Murshed Zaheed – CREDO Mobile
*organizations for identification only

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Calling on the Wealthy to Help Stop Our Racial and Economic Apartheid

When he was 26, IPS’ Chuck Collins gave away all of his wealth after getting a front-row seat into the lives of low-wage workers, he tells Marketplace in an interview about his new book, Born on Third Base.

Collins acquired his wealth as the great-grandson of Oscar Mayer.

“The reality is I still have this mountain of advantage coming from a stable and wealthy family. Social capital. And I’m white, I’m male,  I got a debt-free college education,” Collins said.

Twenty years from now, Collins said, we’ll be in a racial and economic apartheid if we keep on track as we have for the last 30 years “in terms of growing wealth and income inequality, declining social mobility, and the racial wealth divide.”

He said that wealthy people tend to withdraw to their enclaves of private paradises, but in his new book, he’s calling on them to bring their wealth home.

“Take it out of the offshore tax havens and the global finance casino, and actually bring it back to the real economy of goods and services,” he said, because the wealth divide isn’t in anyone’s best interest.

Listen to the full interview on Marketplace’s website.

The post Calling on the Wealthy to Help Stop Our Racial and Economic Apartheid appeared first on Institute for Policy Studies.

Chuck Collins directs the Program on Inequality and the Common Good at the Institute for Policy Studies.

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We Can Reverse Generations of Racial Economic Inequality

Without a course correction, French economist Thomas Piketty warned, we are hurtling toward a grotesquely unequal future. A future governed by a hereditary aristocracy composed of the progeny of today’s billionaires.

In his assessment, however, Piketty overlooked the “peculiar institution” of our nation’s original sin. The color of what Piketty calls our “patrimonial capitalism” will be almost exclusively white.

Progress in race relations has done little to narrow the racial wealth divide. If average black wealth grows at the same rate it has over the last 30 years, it will take another 228 years before it equals the amount of wealth currently possessed by white households.

Read the full article on The Hill’s website.

The post We Can Reverse Generations of Racial Economic Inequality appeared first on Institute for Policy Studies.

Chuck Collins directs the Program on Inequality and the Common Good at the Institute for Policy Studies. 
Dedrick Asante-Muhammed is the director of the Racial Wealth Divide Initiative at the Corporation for Enterprise Development.

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America’s Staggering Racial Wealth Gap Is Getting Worse, Not Better

(Image: Flickr / Johnny Silvercloud)

(Image: Flickr / Johnny Silvercloud)

Two years ago this month, Michael Brown was shot by a white police officer in Ferguson, Missouri, sparking months of sustained protests and helping to ignite the Black Lives Matter movement. While police violence and inequities in our criminal justice system have dominated the discussion of our racial divide since then, there’s a lot more to the story.

Less covered — but just as startling — is the stark racial economic divide in this country.

In a new report called “The Ever-Growing Gap,” my co-authors and I examine 30 years’ worth of data on the wealth divide between white, black and Latino families. Even we were shocked at just how wide the chasm has become — and how much wider it’s going to get if we don’t do something about it.

Read the full article on Inside Sources’s website.

The post America’s Staggering Racial Wealth Gap Is Getting Worse, Not Better appeared first on Institute for Policy Studies.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.

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America’s Huge Racial Wealth Gap Is No Accident

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(Photo: Ellie / Flickr)

Party platforms are dense and often morosely boring documents filled with wonkish policy proposals and partisan jeers at the other side.

At over 40 pages, this year’s Democratic Party platform lives up to its predecessors in length and ennui. However, it also includes a section not yet seen in platforms from either side: an acknowledgement of the racial wealth gap.

Wealth has been unfairly distributed since our nation’s founding, and that unfairness has always had a racial bent. It goes something like this: White families have more; black and Latino families have less. (Asian and Arab Americans have more complex economic histories.)

The gap is far larger than you might expect.

A 2014 study from Pew Research revealed that median white families have 13 times more wealth than median black families, and 10 times more than median Latino families. That gap has remained relatively consistent for decades.

The Democratic platform acknowledges that this gap “has been created by historical and contemporary policies and practices that discriminate against people of color” and have “constrained their ability to earn income and build assets to the same extent as other Americans.”

In other words, the racial wealth gap is no accident, and it’s not caused by some deficiency in people of color. It’s caused by a legacy of bad public policies that extend to this day. The platform commits to eliminating those systemic barriers, but what exactly are they — and how do we fix them?

One way to get at this is to consider who benefits from existing wealth-building policies.

Consider that in recent decades, wealth has concentrated at the tippy top of the economic pyramid. The 400 wealthiest Americans combined own $ 2.34 trillion. That’s more than the GDP of India, a country of over a billion people. In that group of 400, just seven are black or Latino.

Those at the top have been able to reach record levels of wealth through policies that prioritize wealth concentration by those who already have wealth. This is in stark contrast to focusing on those who have no wealth and helping them build a nest egg.

Take, for instance, the loopholes in the tax code that enable the 400 highest earning households to pay just 17 percent of their income in taxes. That’s less than half the top nominal rate. At the same time, we’re told we can’t afford to expand programs with a proven track record of improving prospects for people who start with less, like the early childhood education program Head Start.

This tradeoff — wasting precious public resources on tax breaks for the rich while leaving those at the bottom to fend for themselves — plays out in countless different ways in public policies large and small.

Reversing this dynamic will have a significant impact on the racial wealth gap, but first we have to acknowledge it. Including the racial wealth gap in the Democratic Party platform is a strong first step — one the Republicans should follow.

Now, let’s fix it.

The post America’s Huge Racial Wealth Gap Is No Accident appeared first on Institute for Policy Studies.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.

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Across Racial Justice Issues, a Common Enemy

(Photo: Domenica Ghanem)

(Photo: Domenica Ghanem)

It’s an odd thing to watch your boss, fist in the air, being led away by police to be booked for “crowding, obstructing, and incommoding” as a crowd of supporters cheers him on.

The April 13 agenda for Democracy Spring was racial justice, and as I found myself surrounded by many different organizations and individuals, I started to think that this could be a defining moment for cross-issue collaboration.

The movement to combat police brutality and hold murderers accountable can ally with the movement for a living wage. The movement to battle voter suppression should support the movement to end mass incarceration. The fight of the Restaurant Opportunities Center United should include the fight of Black Lives Matter.

“The Democracy Spring demonstration recognizes a common problem amongst those working for racial justice – money in politics,” Jessica Wynter Martin of ROC told me. “The reason that we [ROC United] have to fight so fiercely for a fair wage is because of hugely funded lobbying campaigns that keep our legislators from representing the rights of restaurant workers.”

The majority of restaurant workers are people of color, and the lowest paid are women of color. Groups like the National Restaurant Association flood Congress with money every year to keep the minimum tipped wage at just $ 2.13 an hour.

Just as the racial justice movement has multiple layers, “Protesting at the capitol is just one step in a multi-tiered approach to fighting money in politics,” Wynter Martin said.

While dozens were arrested at the demonstration on Wednesday and hundreds more the days prior, not everyone who marched on Capitol Hill could afford to risk arrest.

Some people of color avoided as much interaction with police as possible, for the very real fear of violence, or as we’ve seen too many times, death. Some of those who stood further back were immigrants, fearing deportation even if they had the proper documentation. I kept to the side myself, a Muslim woman with my own concerns about having my name in the system.

“The important thing is that we’re burdening them just by being here. They have to hire all of these police, all of this security,” Wynter Martin said. “We’re taxing them like they’re taxing us.”

The post Across Racial Justice Issues, a Common Enemy appeared first on Institute for Policy Studies.

Domenica Ghanem is a communications assistant at the Institute for Policy Studies.

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The Latest on the Racial Wealth Gap

Understanding the growing divide between the haves and the have-nots in a country as large as the United States is difficult to do with just anecdotal evidence and personal experience. Fortunately, we are the beneficiaries of the hard work of a number of venerable organizations who can distill complicated government data to provide this much needed analysis.

The Institute for Policy Studies is one of these organizations providing this service (check out our latest report), but we’re far from the only one. Here are three of the latest reports from other groups illuminating some of the numbers behind the growing racial gap in our nation’s lopsided economy.

 

cfed-racial-wealth-divide-300x300The Corporation for Enterprise Development (CFED) recently released a new study, The Assets and Opportunity Scorecard, highlighting the widespread financial insecurity for American households. The report shows that families of color “are 2.1 times more likely to live below the federal poverty level and 1.7 times more likely to lack liquid savings… [and] are significantly more likely to have subprime credit scores.”

For more on CFED’s work to close the racial wealth divide, check out their Racial Wealth Divide Initiative and new Race & Wealth Podcast.

Another recent study on the racial wealth divide comes from the Annie E. Casey Foundation. Their study, Investing in Tomorrow: Helping Families Build Savings and Assets, looks at a number of interventions that would reduce the racial wealth divide.

Perhaps most interesting is a historical look at what would have happened had Child Savings Accounts been introduced in 1979. Adequately funded, Child Savings Accounts could have reduced the racial wealth gap by 80 percent, nearly eliminating it completely!

 

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Finally, a report from the Institute on Assets and Social Policy in collaboration with Demos looks at the systemic drivers of the racial wealth divide. The report, The Racial Wealth Divide: Why Policy Matters, utilizes their Racial Wealth Audit to look at the impact of public policy on reducing the racial gap.

According to the report, the biggest drivers of the racial wealth divide are not the racial disparities in underlying financial indicators—income, homeownership, college education—but the return on these things, the racial disparity in their ability to generate wealth.

For instance, eliminating the racial disparities in income would reduce the black-white gap by 11 percent. However, eliminating the disparity in the return on income, so that Black households got the same dollar in wealth for every new dollar income that white households receive, would reduce the racial wealth divide by 43 percent. Their conclusion for lawmakers is clear: it’s more important to look at the systemic drivers of the racial wealth divide than the individual factors.

 

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This is far from an exhaustive list of recent reports on the racial wealth divide. Much more work is being done in this field and more detail are packed into these three reports than I have space to include here. Check back often to inequality.org for updates on the latest trends in inequality research and action.

The post The Latest on the Racial Wealth Gap appeared first on Institute for Policy Studies.

Josh Hoxie directs the Project on Opportunity and Taxation at the Institute for Policy Studies.

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