In January 2019 the Institute for Policy Studies released Dreams Deferred, a snapshot of the racial wealth divide in the United States today. The report looked at the current state of household wealth, income, homeownership, debt, and other economic factors. It also reviewed long-term trends that led to this current moment, as well as the historical policies and contributors to this deepening divide.
Between 1983 and 2016, the median black family saw their wealth drop by more than half after inflation, compared to a 33% increase for the median White household. Meanwhile, the number of households with $10 million or more skyrocketed by 856%
The median black family today owns $3,600—just 2% of the wealth of the median white family. The median Latino family owns $6,600—just 4% of the median white family.
At this rate, by 2050, median white wealth will be $174,000, while Latino wealth will be $8,600 and black median wealth will be $600. Black family wealth is on track to reach zero wealth by 2082.
Just as racial economic inequality is the foundation of racial inequality, similarly the racial wealth divide is the foundation of racial economic inequality. Wealth is a critical measure of financial security because it buffers families from the ups and downs of income changes and economic cycles and allows households to take advantage of socio-economic opportunities.
The institute’s report highlights how historic racial wealth disparities have been perpetuated and increased by the trend towards extreme inequality in the United States. It also puts the racial wealth divide in the context of overall wealth inequality trends.
In the 50 years since Martin Luther King Jr.’s famous dream was shared with the nation, we have seen wealth concentrate among the wealthiest Americans and a polarizing racial wealth divide grow between whites, blacks, and Latinos. A major economic shift in policy is needed to end the racial inequality of the past and create a new nation with opportunity for all.