The wealth gap between whites and blacks in the United States has remained stubbornly wide over the three years ending in 2019, according to the latest Federal Reserve data released Monday.
The typical white family has eight times the wealth of the typical black family and five times the wealth of the typical Hispanic family, the Fed said in its comprehensive report on consumer finances.
The median wealth of white households was $ 188,200 at the end of 2019, while the median wealth of black households was $ 24,100. The average wealth of Hispanic households was $ 36,100.
The average is substantially higher as there are more white households at the top of the wealth distribution, the Fed noted.
The average wealth of white households was $ 983,400, compared with $ 1
The Fed survey found that the growth rate of wealth for black households has increased at a faster pace over the past three years than that of white households. That said, in absolute dollar terms, the fastest growth rate for blacks is off a smaller base figure and as a result the gap between whites and blacks has actually widened slightly. In fact, median wealth among whites and blacks grew to $ 164,100 in 2019 from $ 163,700 in the previous survey.
Both black and white families have yet to recover pre-Great Recession levels of wealth, the Fed said.
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The survey found that the typical black or Hispanic family has $ 2,000 or less in cash savings, while the typical white family has more than four times that amount.
Several black economists told MarketWatch that the only way to solve the racial problem in America is to narrow the wealth gap, which they believe has its roots in slavery and has been exacerbated by government policies such as the red coating that prevented blacks to increase their wealth through home ownership.
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According to the Fed study, about 46% of white households own their own homes, compared to only 17% of black households.
This gap could reflect parental wealth, as black families are far less likely to receive early care from their parents.
In a speech on income inequality on Monday, Cleveland Fed Chair Loretta Mester said the US is creating a more inclusive economy.
“Unless action is taken to promote an inclusive economy – one where people have a chance to take themselves and their families out of poverty, one where systemic racism does not limit opportunities, and one where everyone people can participate fully – the US economy will not be able to live up to its full potential and the economy will suffer, ”Mester said.
It defined a program to allow more Americans to participate fully in the economy: invest in poor neighborhoods, close the digital divide, increase access to high-quality education, and eliminate systemic inequalities in access to credit.
“This will help ensure that the American dream is not a pipe dream,” Mester said.