White Families Are $95K Richer Than Black Families, on Average

The Institute on Assets and Social Policy at Brandeis University just released a new study revealing startling information about the gap between black and white families when it comes to wealth. According to the study, the wealth gap between white and black American families has increased fourfold since 1974. Over a 23-year period, the authors of the study found that the wealth gap rose from $20,000 to $95,000. They define wealth as the dollar value of your assets minus your debts.

Thomas M. Shapiro, Tatjana Meschede and Laura Sullivan worked on the study and found other results that were equally revealing:

1) Middle-income white households saw greater increases in wealth than high-income African American households. Middle-income whites have seen a $74,000 increase in wealth during this time period, while high-income black families saw only an $18,000 increase.

2) In 2007, one in 10 African Americans owed $3,600, doubling their debt since 1984.

3) At least 25 percent of all African American families had no assets to turn to during tough economic times.

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Black Progress

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In recent years black graduation rates have been on the rise. School standards, charter schools and the no child left behind act have been cited as reasons for black students' progress in test scores for reading, writing skills, math, and social sciences. Consequently, the number of black men in women enrolling in college is increasing and in many states, the number of African Americans in or heading to college is actually on par with the region's overall population.

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The results of this study bolster the move for reparations, paying back the black community for wealth losses during slavery. Part of the gap in wealth between whites and blacks comes from divergent community structures that give whites more power than blacks to control economic decisions. One example is the 16.5 percent unemployment rate for black Americans, which is about double the rate for whites.

Danielle Douglas, an expert on small businesses and wealth building, said that even though there are reasons that the community deserves reparations for the wealth gap created through slavery and Jim Crow, we are probably going to be waiting forever for that inequality to be addressed. "We tend to still come from a victim mentality and while we are deserving of our 40 acres and a mule, we aren't getting it. So we need to learn to navigate the system and find ways to create our own destiny. It's a mindset."

Douglas, who trains small-business owners to find the resources they need, says that African Americans have to ensure that they and their families are financially literate and empowered to increase their own economic prospects. Also, the government can take steps to create economic opportunities for small businesses in urban communities to allow black families to have a share of the economic pie.

Do you have any ideas for how the black community can address the crisis of this wealth disparity? It's clear that no one is going to help us but ourselves. As even the Latino community is beginning to outpace us in terms of employment, now is the time for us to take complete control of our economic destinies.

Lawrence Watkins is founder of Great Black Speakers. He is also the owner of speakers' bureaus dedicated to Hispanic speakers and Christian motivational speakers. His book, 'Frame Your Future: 8 Principles to Effectively Focus on the Future and Not Dwell in the Past,' will be released in August. If you would like Lawrence's articles delivered directly to your email, please click here.