Blacks with college degrees actually have less in savings and other assets than whites who dropped out of high school, new research finds. For African Americans, education doesn’t necessarily translate into entry into a higher economic class. Neither does having a great paying job.
“When you look descriptively at families, we see that education does not erase the racial wealth divide,” says Darrick Hamilton, PhD, a New School economist who produced the figures that will be in a forthcoming report. Duke University’s William Darity, Jr., PhD, and Rebecca Tippett, PhD, of University of North Carolina, also coauthored the report.
One person this rings true for is filmmaker Andre Robert Lee, 44, of New York. He learned long ago that education was indeed not the great equalizer. He chronicles this discovery in his autobiographical film Prep School Negro. Growing up as the son of a Black garment factory worker, Lee landed a scholarship at the age of 14 to attend a predominately white, elite private high school outside of Philadelphia. There, he firsthand saw how wealth was defined by race.
And even though his private school education, and then degrees from a liberal arts college and a graduate program in education, did afford him some financial stability, he realized he could probably never “catch” up with whites in terms of wealth based solely on his education.
Lee is right. There are also stark racial disparities in savings and assets, even when Blacks make more money. In fact, the median Black family earning an income in the middle fifth of all wage earners amassed slightly less accumulated wealth than the median white family who earned incomes in the bottom of fifth of earners, reports NBC News.
White householders also get more financial aid from relatives. A 2014 study from the Institute on Assets and Social Policy at Brandeis University, found that nearly half of white households received financial transfers from other family members. And the median amount of that movement of intra-family wealth amounted to a whopping $83,692. By contrast, only one tenth of Black households got money or other assets from relatives. For this the median amount was $52,240.
Additionally, whites have more inherited wealth than Blacks.
So when you include all of the various assets, white households averaged a unbelievable 13 times the wealth of Black households in 2013, according to the Pew Research Center. In 2007, the wealth gap was 10 to 1.
And even when Blacks attain a certain amount of wealth, their extra responsibilities, such as supporting relatives who lack retirement savings and paying off a mortgage—make it more difficult form Blacks to retain the wealth.
Unfortunately there is a limited extent to which education can actually change the relationship between wealth and race. “We tend to think that if you get a good education, you’ve got it made,” Hamilton says. “But to make it with some security, you first need wealth.”