A $95,000 question: why are whites five times richer than blacks in the US?

[Obama 2012 1,714]

http://abcnews.go.com/Business/study-finds-wealth-gap-blacks-whites-quadrupled/story?id=10670261

Drawing on economic data from 2,000 American families who were interviewed every few years between 1984 and 2007, researchers have found that the wealth disparity between white and black households has more than quadrupled, regardless of income bracket.

In 1984, the average white family in the sample group held around $20,000 more in assets than the average black family, according to a study conducted by the Institute on Assets and Social Policy at Brandeis University. By 2007, the "racial wealth gap" had increased by $75,000.

Additionally, the study found that middle-income white families hold much more assets (stocks, bonds, business interests, real estate other than primary residence) than do high-income black families. A quarter century ago, higher income black households held more wealth than middle-class white families.

"As a long-term socio-economic trend, this is both shocking and disturbing," Tom Shapiro, IASP director and the study's coauthor, told ABCNews.com.

'Broken Chain of Achievement'

The IASP study also found that many black families hold more debt than assets and at least 25 percent of black families had no assets to turn to in times of economic hardship. The fourfold increase in the wealth gap reflects a variety of public policies, such as tax cuts on investment income and inheritances, which benefit the wealthiest Americans, Shapiro said. Persistent discrimination in housing, credit and labor markets are also factors that likely played a role in the widening of the gap, he said.

Our study shows a broken chain of achievement," Shapiro said. "Even when African Americans do everything right -- get an education and work hard at well-paying jobs -- they cannot achieve the wealth of their white peers."

Shapiro, the author of "The Hidden Cost of Being African American," said data for the study was obtained over the years by a separate team of researchers from The Panel Study of Income Dynamics at the University of Michigan.

Around 15 percent of the 2,000 focus families were black; the rest were white. Three income groups were designated; low, middle and high income, with the highest income households earning (in today's dollars) $70,000 and up. The low-income group earned less than $40,000.

Policy Changes Suggested

At least two steps could be taken immediately to shrink the gap, said Victor Corral, program manager for the Closing the Racial Wealth Gap Initiative, part of the Oakland-based Insight Center for Community Economic Development, which co-released the study along with the IASP.

"The first thing would be passage of a strong and independent Consumer Financial Protection Agency," Corral said, referring to a measure that is part of wider financial reform legislation currently being debated in the Senate.

Corral said minorities have been unfairly targeted and exploited by banks, whether through adjustable rate mortgages and higher interest rates on credit cards.

Changes in the tax code, which Corral said disproportionately benefits the wealthiest Americans, also could be made to reduce the gap. For example, there are no federal tax credits for renters who aspire to be homeowners, which he said is unfairly discriminatory against blacks and other low-income Americans.

Also, many blacks work in jobs that do not offer retirement plans, another reason for the gap.

"There needs to be more access to 401(k) plans for blacks," Corral said.

[Ban Hammer 13,334]

we just need another government program!

[Obama 2012 1,714]

'Broken Chain of Achievement'

The IASP study also found that many black families hold more debt than assets and at least 25 percent of black families had no assets to turn to in times of economic hardship. The fourfold increase in the wealth gap reflects a variety of public policies, such as tax cuts on investment income and inheritances, which benefit the wealthiest Americans, Shapiro said.

What? Of course this moron doesn't mention that this benefits EVERYONE who invests AND it benefits the government. As the lower the capital gains rate, the more people invest, the more people trade, and the more taxes government can collect. Let's ignore the real facts though.

Persistent discrimination in housing, credit and labor markets are also factors that likely played a role in the widening of the gap, he said.

Discrimination? So by not 'giving' housing away, it's discrimination? Because 'whitey' buys their homes and a few blacks can't afford to, then this is a problem? OR how about the damned fake income loans that were given in the last decade to blacks because the government pretty much mandated you can't discriminate based on income/credit, etc... morons.

Our study shows a broken chain of achievement," Shapiro said. "Even when African Americans do everything right -- get an education and work hard at well-paying jobs -- they cannot achieve the wealth of their white peers."

So he's saying blacks are helpless? I knoew PLENTY of black people that disagree with this statement wholeheartedly. What a crock of bullshit.

Policy Changes Suggested

"The first thing would be passage of a strong and independent Consumer Financial Protection Agency," Corral said, referring to a measure that is part of wider financial reform legislation currently being debated in the Senate.

Corral said minorities have been unfairly targeted and exploited by banks, whether through adjustable rate mortgages and higher interest rates on credit cards.

WHAT???? Unfairly targetted? So they didn't make decisions on their own to apply for and use credit? They didn't make the decisions to becomes leeches on society/everything else. They can't read contracts? Cmon now....

Changes in the tax code, which Corral said disproportionately benefits the wealthiest Americans, also could be made to reduce the gap. For example, there are no federal tax credits for renters who aspire to be homeowners, which he said is unfairly discriminatory against blacks and other low-income Americans.

Oh this guy is a fvcking idiot through and through... So not offering renters tax credits is discrimination against blacks? You've got to be kidding me.

Also, many blacks work in jobs that do not offer retirement plans, another reason for the gap.

"There needs to be more access to 401(k) plans for blacks," Corral said.

More access for blacks? What? Tell me one employer that says on white people can get a 401k? This study is complete racist fluff.

[Trumplestiltskin 5,791]

I would personally think twice before I wrote off 26 years work as a "crock of bull$hit".

[Obama 2012 1,714]

I would personally think twice before I wrote off 26 years work as a "crock of bull$hit".

The 'answers' are enough to make the study worthless. The guy obviously has an agenda.

Let's ignore the poor whites who fall into the same catagory as the poor blacks here as well.

[Trumplestiltskin 5,791]

You do realise that the guy who wrote the article is not the guy who did the study.

[Obama 2012 1,714]

You do realise that the guy who wrote the article is not the guy who did the study.

The two interviewed aren't either, but they are using it to push an agenda, just as the author is in enhancing their story.

[Trumplestiltskin 5,791]

One of them is the coauthor of the study....

[KaiserD 12]

Our study shows a broken chain of achievement," Shapiro said. "Even when African Americans do everything right -- get an education and work hard at well-paying jobs -- they cannot achieve the wealth of their white peers."

So he's saying blacks are helpless? I knoew PLENTY of black people that disagree with this statement wholeheartedly. What a crock of bullshit.

Yup.

The biggest gap I can see that is the cause of such a huge wealth gap is that many of the schools here (I live in a black neighborhood) are absolutely sh3t. In fact from what I've seen, this area is quite similar to my last place of residence (Runcorn, UK) when you have poor performing schools in a poor area, there are mindsets that go with it "what's the point" "qualifications aren't relevant" "what I do doesn't matter" and a common theme I noticed is that people have a hard time understanding that a long term investment can pay off. They want to put in short term effort for long term pay off. So really it has a lot more to do with socio economic class than race to me*.

Runcorn people obviously couldn't blame their situation on peoples of the past but they still had a "you owe me" mentality, but not all of them of course. On the other end of the scale there were old-school Runcorners who were extremely proud and hard working, even if some of them were struggling to get by and fed up of the crime around them. They are a very admirable people with a lot of resilience.

How you can reverse this general trend though, I don't know. If you have a kid that is being raised at a bad school by a parent/set of parents who don't care about their education because they also got raised that way then that's really not a good start for empowering someone to take control of their life.

*Though succeeding in life, if you're pretty poor you face a much bigger battle than someone who's parents are rich.

Edited May 18, 2010 by KaiserD

[alienlovechild 75]

A typical white family is now five times richer than its African-American counterpart of the same class, according to a report released today by Brandeis University in Massachusetts.

White families typically have assets worth $100,000 (£69,000), up from $22,000 in the mid-1980s. African-American families' assets stand at just $5,000, up from around $2,000.

A quarter of black families have no assets at all. The study monitored more than 2,000 families since 1984.

"We walk that through essentially a generation and what we see is that the racial wealth gap has galloped, it's escalated to $95,000," said Tom Shapiro, one of the authors of the report by the university's Institute on Assets and Social Policy.

The survey does not include housing equity, because it is not readily accessible and is rarely realised as cash. But if property were included it would further widen the wealth divide.

Shapiro says the gap remains wide even between blacks and whites of similar classes and with similar jobs and incomes.

America has long lived with vast inequality, although 40 years ago the disparity was lower than in Britain.

Today, the richest 1% of the US population owns close to 40% of its wealth. The top 25% of US households own 87%.

Only one in 10 African-Americans owns any shares. A third do not have a pension plan, and among those who do the value is on average a fifth of plans held by whites.

Shapiro says one of the most disturbing aspects of the study is that wealth among the highest-income African-Americans has actually fallen in recent years, dropping from a peak of $25,000 to about $18,000, while among white counterparts of similar class and income it has surged to around $240,000.

In 1984, high-income black Americans had more assets than middle-income whites. That is no longer true.

The report attributes part of the cause to the "powerful role of persistent discrimination in housing, credit and labour markets. African-Americans and Hispanics were at least twice as likely to receive high-cost home mortgages as whites with similar incomes," the report says.

Although many black families have moved up to better-paying jobs, they begin with fewer assets, such as inheritance, on which to build wealth. They are also more likely to have gone into debt to pay for university loans.

"African-Americans, before the 1960s, first by law and then by custom, were not really allowed to own businesses. They had very little access to credit. There was a very low artificial ceiling on the wealth that could be accumulated. Hence there was very little, if anything, that could be passed along to help their children get to college, to help their children buy their first homes, or as an inheritance when they die," said Shapiro.

Since the 1980s, US administrations have also geared the tax system to the advantage of the better off. Taxes on unearned income, such as shares and inheritance, fell sharply and are much lower than taxes on pay.

There were also social factors, the study found. "In African-American families there is a much larger extended network of kin as well as other obligations. From other work we've done we know that there's more call on the resources of relatively well-off African-American families; that they lend money that's not given back; they help cousins go to school. They help brothers and sisters, aunts and uncles, with all kinds of legal and family problems," said Shapiro.

http://www.guardian.co.uk/world/2010/may/17/white-people-95000-richer-black

[George W. Bush 6]

Already posted and VJers have already chimed in with a cause and a solution.

The biggest gap I can see that is the cause of such a huge wealth gap is that many of the schools here (I live in a black neighborhood) are absolutely sh3t. In fact from what I've seen, this area is quite similar to my last place of residence (Runcorn, UK) when you have poor performing schools in a poor area, there are mindsets that go with it "what's the point" "qualifications aren't relevant" "what I do doesn't matter" and a common theme I noticed is that people have a hard time understanding that a long term investment can pay off. They want to put in short term effort for long term pay off. So really it has a lot more to do with socio economic class than race to me.

we just need another government program!

[alienlovechild 75]

The biggest gap I can see that is the cause of such a huge wealth gap is that many of the schools here (I live in a black neighborhood) are absolutely sh3t. In fact from what I've seen, this area is quite similar to my last place of residence (Runcorn, UK) when you have poor performing schools in a poor area, there are mindsets that go with it "what's the point" "qualifications aren't relevant" "what I do doesn't matter" and a common theme I noticed is that people have a hard time understanding that a long term investment can pay off. They want to put in short term effort for long term pay off. So really it has a lot more to do with socio economic class than race to me*.

I like the last part about short term thinking overriding long term goals.

The best chance that poor kids have are through free public schools even if they are substandard. The alternative of dropping out of school or graduating with few goals post high school helps perpetuate the cycle of hopelessness that runs in some families. if you give up on yourself at age 18, it's hard to recover but a few manage to do it.

[alienlovechild 75]

Already posted and VJers have already chimed in with a cause and a solution.

I would have caught that if some offending posters didn't indulge in creative writing for thread titles.

[_Simpson_ 250]

we just need another government program!

word!

[Otto 83]

I would have caught that if some offending posters didn't indulge in creative writing for thread titles.

**I agree - similar topics merged (which removes the creative/racial title)

Edited May 18, 2010 by Otto und Karin