Today’s racial wealth gap has been significantly shaped by historical patterns of racial inequity. Wealth is most often transmitted over generations through inheritance, paid tuition, property, family businesses, and so forth. However, the ability of people of color to accumulate wealth has been limited by theft of land and resources from these groups, slavery, sharecropping, Jim Crow laws, immigration policies, occupational segregation, and the inequitable application of social policies.

The wealth gap has enormous implications of people’s quality of life and access to opportunity. Wealth can pay for better education, homes that can appreciate in value, and better and more accessible health care. It gives families opportunities to invest and allows them to accumulate savings that can help them make it through difficult times, job changes, and retirement. Wealth also enables parents to give their children a significant head start in life.

In addition to lack of intergenerational wealth, people of color face unique challenges that limit the growth, scalability, and sustainability of their job prospects and businesses. This includes limited access to job mobility, favorable credit terms, funding, investors, and marketplace opportunities. Numerous studies have documented discrimination in job interviews, callbacks, hires, compensation, advancement, and firing (e.g. Pager and Western 2012; Hosoda, Nguyen, and Stone-Romero 2012; Bertrand and Mullainathan 2003).

Policy has the potential to move us in the direction of equity, but too often it upholds and reinforces economic racial inequality.

Sources

Levine, Marc. Milwaukee 53206: The Anatomy of Concentrated Disadvantage in an Inner City Neighborhood, 2000-2017.

National Urban League, The State of Black America

Wisconsin Poverty Report: Progress Against Poverty Stalls in 2016