OP-ED: Let’s work to end racial wealth divide
The Black Lives Matter movement has drawn attention not just to police brutality but to an entire system built on racial injustice. One major expression of that injustice is the nation’s glaring racial wealth divide, the financial legacy of centuries of white supremacy.
Even before the pandemic, our research at the Institute for Policy Studies found that median white families had literally dozens of times more wealth than median Black or Latinx families. The median Black family today, we found, owns just $3,600 in household wealth, or about 2% of the median white family’s $147,000, while the median Latinx family has assets worth $6,600, or 4% of the white median.
Over the last few decades, those disparities have been supercharged by an economy that funnels wealth to the billionaire class at the expense of everyone else. As government spending, taxation and trade policies have shifted a larger and larger share of wealth to the overwhelmingly white top 0.1%, the racial wealth divide has grown ever wider.
The COVID-19 pandemic is accelerating those trends. Even as the Federal Reserve reports that more than $6.5 trillion in household wealth vanished during the first three months of the crisis, surging stock markets padded billionaire bank accounts to an astonishing degree.
Our new report, “White Supremacy Is the Pre-Existing Condition,” shows just how staggering that gap is becoming.
In the weeks between March 18 and June 11, the combined wealth of America’s 640 billionaires increased by more than $637 billion. They are now worth about $3.6 trillion, an amount greater than the combined wealth of the nation’s 59 million Latinx people and about three-quarters of that held by its 41 million Black residents.
The $1.9 trillion owned by just the top 70 billionaires is equivalent to all the home equity wealth of all Black and Latinx households combined.
Bolstered by America’s surging movement for racial justice, these stunning facts should strengthen our resolve to reduce the racial wealth divide as part of our pandemic response and economic recovery program.
We propose several solutions that will reduce the racial asset gap and build an economy that works for everyone, not just the billionaires. These include steps to produce a guaranteed income or guaranteed employment, like the Works Progress Administration provided during the Great Depression.
We are also calling for a universal health coverage system that is delinked from employment, expanded inclusive housing policies, the seeding of “baby bond” accounts to help every American start building assets at birth, and a new system of postal banking, to protect underbanked families from predatory lending.
These and other reforms can be funded through more progressive income, wealth and estate taxes on the wealthiest Americans.
After the nation’s last economic crash in 2008, our government’s response worsened the racial wealth divide by bailing out Wall Street, but not Main Street homeowners and businesses.
This time, at a moment of a historic reckoning with racial injustice, let’s learn from these mistakes. As we plot a course of recovery, we should advance solutions that will heal the racial wealth divide — and enable us to grow together.
— Omar Ocampo and Chuck Collins are co-authors of the Institute for Policy Studies report “White Supremacy Is the Pre-Existing Condition: Eight Solutions to Ensure Economic Recovery Reduces the Racial Wealth Divide.” This column was produced for the Progressive Media Project, which is run by The Progressive magazine, and distributed by Tribune News Service.