A white acquaintance who grew up wealthy in the South in the 1940s had the family gardener’s son, an African-American boy, as his earliest best friend. He remembers vividly what happened when he asked his mother if his friend could join them for lunch. She put the black child at a table in the kitchen away from the dining room where the family was eating and told her son never to invite his friend again. As they grew up, the possibilities and destinies for the two boys became more and more divergent, their friendship and their lives forced apart by laws and norms of the time that enforced racial separation.
We’ve come a long way as a country since then. But when it comes to wealth, there is still a massive separation between white American families and those of color, and that gap has real-life consequences for our nation’s children — and, increasingly, for the future of America.
As we address the problem, it is clear that public policies, which have played a role in creating the racial wealth gap, must play a role in ending it.
Household wealth — what is owned minus what is owed — is important to children because it allows their parents to afford high-quality early education, save for their college tuition, help them with a down payment or leave them an inheritance. According to the latest data, black households with children hold only 4 percent of the wealth of white households. And things keep getting worse.
A new study from the Insight Center for Community Economic Development looks at U.S. households with young children. More than half of white families had incomes that were more than 185 percent of poverty levels and owned multiple assets, such as savings accounts, homes and investment portfolios, but only 14 percent of African-American families were similarly situated.
Following the same children over 13 years, it was found that the gap increased as the children grew older. In 1994 white households had $25,000 more in median wealth than African-American households, but by 2007 the gap had nearly doubled to $47,000 — enough to pay for one child’s college tuition and fees for four years.