A new analysis from the Corporation for Enterprise Development and the Institute for Policy Studies shows that it would take about two hundred and twenty-eight years for Black Americans to accumulate the same amount of wealth as whites currently have, if current policies remain in place.
This shocking estimate is part of a study released last month by the two groups that focused on the racial wealth divide in the United States. The study highlights the large financial disparities between Black and Latino Americans and other races in this country. It also delves into the policies that help to contribute to this increasing divide and proposes ways to help reverse this trend.
The study was conducted by using 30 years of data from the Federal Reserve’s Survey of Consumer Finances, utilizing information on Americans’ balance sheets, income, pensions and demographic characteristics.
According to the study, the average wealth of white families has grown by 84% over the past 30 years. That is three times as fast as the rate for African-American families and 1.2 times the growth rate for Latino families.
This indicates that the gap between the average household for white families and families of color has nearly doubled over the last 30 years.
To put that in simple dollar terms, if the past 30 years were to continue, white families’ wealth would continue to increase by an average of $18,000 a year, Latino household wealth would increase about $2,250 a year and Black’s wealth would only grow by about $750 a year.
Using those statistics, it would take until around the year 2241 for the average Black family to accumulate wealth equal to what white families have today. And it would take Latinos until 2097, assuming the average wealth of white families holds steady at today’s levels.
The study attributes the large financial divide mainly to tax policies aimed at helping households build wealth, save for retirement, buy a new home, start a business or pay for college—policies they say primarily benefit wealthy families, not low-income communities.
The full study can be read here: