Photo by Towfiqu barbhuiya
Despite some recent progress, the wealth gap between Black people and whites in the U.S. remains vast, with white households holding significantly more wealth than their Black counterparts, according to the Federal Reserve’s latest Survey on Consumer Finances.
The survey, released this year, provides a comprehensive look at Americans’ financial circumstances and reveals significant disparities in wealth.
The median net worth of the typical Black household in 2022 was $44,900, showing increases of more than 61 percent for Black households since the last survey in 2019. However, even with these gains, their wealth remains a fraction of that of White households, whose median wealth was $285,000 in 2022, up 31 percent from 2019, CNN reported.
The growth in housing wealth played a significant role in increasing the net worth of Black households. Soaring home prices in recent years boosted homeowners’ equity. Higher inflation also helped raise the net worth of Black households because it decreased the value of their debt, increasing their wealth. Black households typically have larger mortgages, which, when adjusted for inflation, led to increased wealth.
Homeownership rates also saw changes, with Black Americans making strides in homeownership since 2013, although the rate remains below the pre-Great Recession levels. However, white homeownership rates remained relatively flat during this period.
The survey showed that larger shares of Black households owned stock and businesses in 2022, helping narrow the wealth gap between white and non-white households.
Still, in 2022, a typical white household had about six times more wealth than the typical Black household. White Americans had $50,000 more in net worth than Black Americans in 2022.
A study by the RAND Corporation found that closing the wealth gap without such investments may be challenging. The history of racial disparities, including slavery, segregation, and ongoing systemic injustices, has contributed to the deep-rooted inequalities seen today. A reparations program, some argue, could involve trillions of dollars to address these historical injustices and wealth disparities.
Photo by Towfiqu barbhuiya: https://www.pexels.com/photo/person-holding-an-empty-wallet-8515596/
