A publication of the Samuel DuBois Cook Center on Social Equity
By William Darity Jr., Darrick Hamilton, Mark Paul, Alan Aja, Anne Price, Antonio Moore, and Caterina Chiopris
The racial wealth gap is large and shows no signs of closing. Recent data from the Survey of Income and Program Participation (2014) shows that black households hold less than seven cents on the dollar compared to white households. The white household living near the poverty line typically has about $18,000 in wealth, while black households in similar economic straits typically have a median wealth near zero. This means, in turn, that many black families have a negative net worth. (Hamilton et al. 2015).
At the other end of America’s economic spectrum, black households constitute less than 2 percent of those in the top one percent of the nation’s wealth distribution; white households constitute more than 96 percent of the wealthiest Americans. Moreover, even among the nation’s wealthiest households, extreme differences persist on the basis of race:
The 99th percentile black family is worth a mere $1,574,000 while the 99th percentile white family is worth over 12 million dollars. This means over 870,000 white families have a net worth above 12 million dollars, while, out of the 20 million black families in America, fewer than 380,000 are even worth a single million dollars. By comparison, over 13 million of the total 85 million white families are millionaires or better (Moore and Bruenig 2017).
In this report, we address ten commonly held myths about the racial wealth gap in the United States. We contend that a number of ideas frequently touted as “solutions” will not make headway in reducing black-white wealth disparities. These conventional ideas include greater educational attainment, harder work, better financial decisions, and other changes in habits and practices on the part of blacks. While these steps are not necessarily undesirable, they are wholly inadequate to bridge the racial chasm in wealth.