Wealth Gap Widens As Whites Acquire 12 Times The Capital Of Blacks
The average white family in America has $134,200 in wealth whereas their Black family counterparts have an average of $11,000, reports CNN Money. The Urban Institute found in their investigation that whites currently have 12 times the wealth of blacks, a huge leap from 1995 when whites had seven times more wealth than blacks. Signe-Mary McKernan who serves as the co-director of the Opportunity and Ownership Initiative at the Urban Institute says, “The American Dream remains out of reach for many African-American and Hispanic families. Families of color, who will be the future majority population of this country, are not on a firm wealth-building path.”
The wealth gap continues to widen between Blacks and whites because Blacks are less likely to be homeowners or participate in retirement accounts. Also the federal government programs that help Americans to purchase homes and save for retirement often have parameters that exclude lower income Americans. Blacks and Hispanics are more likely to fall in that category.
“The bottom 20% of taxpayers, in terms of income, received less than 1% of federal subsidies for homeownership or retirement,” the article says.
The Urban Institute report found white families have at least $285,000 saved in funds and are able to enjoy a comfortable retirement. Inheritances make it possible for children to accumulate wealth or purchase property.
CNN Money also says Blacks and Hispanics save less for their retirement in 401(k)s and IRAs. These retirement plans have replaced pensions, leaving Blacks with less money to pass toward their children. Forty-seven percent of whites are covered by employer retirement plans whereas 40 percent of Blacks don’t receive the same work benefits.
Besides employment benefits, Blacks build up more student loan debt than whites. Also with low graduation rates, many Blacks face the burden of loans but no college degree thus creating problems as they try to push forward financially.