Wealthy white households control the vast majority of the nation’s economic resources, and they appear to have no idea how the rest of society lives.
It’s pleasant to think history is marching towards a more fair and equitable society. Things might be a bit rough around the edges right now, but there’s progress, the story goes.
Unfortunately, when it comes to the deep racial wealth divide in the United States, the numbers just don’t back this up. Rather than closing, if we don’t take steps to change the course we’re on, that gap could go on growing forever.
A pair of recent research papers bears this story out.
The first comes from a group of Yale psychologists who looked at public misperceptions around racial economic equality. The researchers looked at black and white populations from low-income and high-income households alike and compared their assessments of racial economic equity.
The researchers found that both racial groups got the numbers very wrong, vastly overestimating progress in closing the racial economic divide. Wealthy white respondents, perhaps predictably, were the most off in their assessment, overestimating a typical black family’s household income more than 30%.
I co-authored a recent study with a colleague at the Institute for Policy Studies and our allies at Prosperity Now that did.
We looked at the growing racial economic divide as it relates to wealth, and specifically its significant implications for the American middle class. Our study found the racial wealth divide is significantly larger than the income gap—and worse, the racial wealth divide is on track to keep getting bigger.
We looked at how race, education, and income correlate with middle class wealth status, which we defined as owning between $68,000 and $204,000—between two-thirds to double the white median household.
We found that black and Latino families in the middle would need to earn between 2 and 3 times as much as white families in order to enter the middle class. By our count, roughly 70% of black and Latino households would fall below the $68,000 threshold needed for middle-class status, compared to only about 40% of white households.
Further, only black and Latino households with an advanced degree have enough wealth to be considered middle class, whereas the average white household with a high school diploma or higher would be considered middle class.
We also looked at the past three decades of racial wealth data to develop an idea of what the future will look like if current trends continue. The findings were bleak. The median black family, who today only owns $1,700 in wealth excluding their car, will reach zero wealth by 2053. That’s just 10 years after the country is projected to become majority non-white.
Median white families, by contrast, have $116,000 in wealth, and that number is actually going up.
So the research is clear: Wealthy white households control the vast majority of the nation’s economic resources, and they appear to have no idea how the rest of society lives. That’s a problem.
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