COMMENTARY: Ending the racial wealth gap

More than 50 years ago, Dr. Martin Luther King observed that most white people in the United States "believe that American society is essentially hospitable to fair play and to steady growth toward a middle-class utopia, embodying racial harmony."

"But unfortunately," he added, "this is a fantasy of self-deception and comfortable vanity."

This fantasy is on full display in the United States today. While race is increasingly discussed when it comes to immigration, police violence, or white nationalism, one of its most impactful legacies is seldom named: the racial wealth divide.

That divide is much bigger than most people suppose. It's also fixable -- if we confront it directly.

Household wealth is the sum total of what you own minus what you owe. It's the economic buffer that prevents minor financial setbacks like an illness or job loss from becoming a full-blown calamity.

The median black family today owns $3,600 in household wealth -- just 2 percent of the median white family's $147,000. The median Latino family does only a little better, with assets worth $6,600 -- 4 percent of the white median.

Wealth, and the opportunity required to generate wealth, is heavily skewed based on the color of your skin in the United States.

This does not have to be the case. Solutions are close at hand that could prevent the next generation from experiencing the deep economic divide we see today. In a new report, released this month, my colleagues and I laid out what we call "Ten Solutions to Bridge the Racial Wealth Divide."

New programs in affordable housing, postal banking and expanding health care to a Medicare for all system would protect vulnerable Americans of all races, especially those who have less wealth to begin with. We call for restoring historically high tax rates on the ultra-wealthy, which have been slashed over the past four decades.

We also propose a Baby Bonds program -- an endowed fund for all children born in the United States that they can access upon entering adulthood to fund their education or first home. This strikes at a key tenet of the modern racial wealth divide: the fact that white families can often hand down intergenerational wealth while non-whites cannot.

Finally, we call for a congressional committee on reparations, a proposal that's been in introduced in Congress every year since the 1980s.

These solutions are smart and effective, but they'll go nowhere without a groundswell of support.

Inequality hurts everyone. As British social epidemiologists Richard Wilkinson and Kate Pickett point out in their book, The Inner Level, reducing economic inequality improves every indicator of happiness and well-being for all people, not just the poor.

This country has never reconciled its original sin of slavery, nor the multitude of racist public policies that went into effect in its wake. A serious, systemic, race-focused approach to addressing the deep economic divide is past due.

Commentary on 04/23/2019

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