An economy that’s rigged to benefit the richest 1% has left most of America behind. While wages for workers have remained flat for decades, expenses for healthcare, housing, and most basic needs have risen. Alongside record concentrations of income and wealth at the top, America’s racial wealth divide has persisted – or worsened.
As people of color make up a larger share of the diversifying US population, that persistent racial wealth divide is bringing down America’s median wealth. But while wealth at the middle falters, it’s soaring at the top. In other words, the 1% are profiting off ongoing racial economic inequality.
All this is happening against a backdrop of seemingly good economic news. Black and Latino unemployment rates reached historic lows in 2018, and median income has slowly inched up for all households in the last few years.
But measures of wealth – what you own minus what you owe – tell a very different story. Those were our findings in Dreams Deferred, a new study on the racial wealth divide for the Institute for Policy Studies.
Since the early 1980s, median wealth among black and Latino families has been stuck at less than $10,000. The median black family today owns $3,600 – just 2% of the $147,000 of wealth the median white family owns. The median Latino family has assets worth $6,600 – just 4% of the median white family.
In other words, the median white family has 41 times more wealth than the median black family and 22 times more wealth than the median Latino family.
“Median wealth” refers to the household at the exact middle of wealth distribution – with half of households above and half below. That’s different from “average wealth”, which skews the numbers by including the wealth of the richest 1%. (Average white wealth, for example, was $930,000 in 2016. But the ordinary white person isn’t close to being a millionaire.)
Changes in median wealth give us a multi-decade understanding of economic security and wellbeing. Since 1983, median wealth for all US households declined by 3%, adjusting for inflation. Over this same period, the median Black family saw their wealth drop by more than half.
Meanwhile, the number of households with $10m or more soared by 856%.