With people of color projected to make up the majority of Americans by 2043, a new study warns against policies that keep many black and Latino households out of the middle class
A new study finds that if the racial wealth divide is left unaddressed, the median wealth for black Americans will fall to $0 by 2053, with Latino Americans reaching the same median wealth two decades later.
According to the report by the Institute for Policy Studies and Prosperity Now, the wealth gap between people of color and their white counterparts is showing no sign of narrowing in the coming years—even as racial demographics in the U.S. are rapidly shifting, with people of color projected to make up the majority of the population by 2043.
In the next three years, black households are projected to lose 18 percent of their median net worth, while white families are expected to gain about three percent more wealth.
The report, “The Road to Zero-Wealth,” defines middle-class wealth as a household net worth of $68,000 to $204,000, and notes the disconnect between income and wealth: a median income for one’s racial background does not guarantee entry into the middle-class.
“White households in the middle income quintile—those earning $37,201-61,328 annually—own nearly eight times as much wealth ($86,100) as Black middle-income earners ($11,000) and ten times that of their Latino counterparts ($8,600),” write the authors.
To combat the growing racial wealth divide and to keep it from resulting in a further-weakened middle class, the study urges, among other things, a correction of the country’s “upside-down” tax structure in which the government would “stop subsidizing those who are already wealthy and start investing in opportunities for low-wealth families to build wealth.”
“The growing racial wealth divide documented in this report is not a natural phenomenon, but rather the result of contemporary and historical public policies that were intentionally or thoughtlessly designed to help White households get ahead at the expense and exclusion of households of color,” the report reads. “Although public policy has been a significant contributor to the divide, the good news is that public policy can also help to close the divide.”
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