As so widely and correctly reported in the wake of unarmed African American detainee George Floyd’s killing in Minneapolis last month by a white police officer, the economic gap between black and white Americans remains way too wide despite the progress made in recent decades. In addition, research consistently shows that this inequality can be found in every indicator you can think of. (Two recent summaries can be found here and here.)
Some recent digging, however, has convinced me that nowhere is the problem bigger or more serious than in wealth – that is, what people earn (from wages, salaries, rents, or what have you) along with what they own (homes, autos, stocks, etc.) The above-linked Washington Post article makes clear why wealth matters so much, especially over time:
“More wealth makes for more a comfortable, safer living. And, more importantly, it is passed on to the next generation. Their parents’ wealth gives many white children a boost at birth, an advantage many of their black peers lack.”
But the closer you look at the wealth figures, the more surprising they are. For although the black-white gap has consistently remained formidable in absolute term going back to at least 1989, it has witnessed some fluctuations that haven’t been trivial, and that over time at least point in the right direction.
Here’s a table containing the black-white breakdown in wealth over recent decades. The source is a study released every three years by the Federal Reserve that’s called the Survey of Consumer Finances. Unfortunately, the latest edition only takes the story through 2016. (If schedules for the previous studies hold, the next release won’t come out until the early fall.) The numbers in the left-hand and center column represent the actual dollar wealth amounts, adjusted for inflation, of the typical white and black households. In other words, it shows us the median – the figure for households exactly at the midpoint of results for all households. The right-hand column shows that ratio between these levels. The source is this collection of charts that accompanied the latest release:
non-hispanic white non-hispanic black ratio white:black
1989: 132.7 7.4 17.93:1
1992: 116.9 16.9 6.92:1
1995 120.0 17.1 7.02:1
1998 141.4 22.9 6.17:1
2001: 166.3 26.3 6.32:1
2004: 179.3 26.0 6.90:1
2007: 198.3 24.4 8.13:1
2010: 144.3 17.6 8.20:1
2013: 146.4 13.6 10.76:1
2016: 171.0 17.1 10.00:1
Over the longest term, it’s clear that the racial wealth gap has narrowed significantly. Indeed, from 1989 to 2016, it shrank by a little over 44 percent. Much more discouraging – the lion’ share of this progress took place during the three years between 1989 and 1992. Since then, it’s widened by 44.50 percent.
The relationship between this wealth gap and the economy’s ups and downs are noteworthy, too. During the 1990s economic expansion (which took place essentially between the 1992 and 2001 figures), the gap narrowed modestly – from 6.92:1 to 6.32:1. But during the so-called bubble expansion of the first decade of this century (from 2001 through 2007), it widened significantly. And it widened further during the first six years of the last, pre-CCP Virus recovery – by nearly 22 percent.
At the same time, as that expansion took hold, the 2012-2016 results show that some narrowing resumed.
Also, odd –during the Great Recession, which lasted from the end of 2007 till the middle of 2009, the racial wealth gap barely widened at all.
Finally, though, according to a chart that ran in the above-linked Washington Post piece (and that I wasn’t able to reproduce), there’s data going back to the 1950s. I haven’t looked at the figures first hand, but if the graphic is accurate, the wealth gap narrowed dramatically through the late 1970s, (though the black household wealth levels start at a shockingly low level), suffered a terrible 1980s (even though the economy overall grew nicely during the decade), recovered sharply during the 1990s (an even stronger, longer expansion), and has regressed steadily this entire century (through 2016). Worst of all, though, the caption’s message: virtually no progress since the late 1960s – another time of racial and other national tumoil.
Unfortunately, the next set of Fed figures won’t shed any light on the virus’ impact on this key measure of black economic performance and progress. But Americans may learn whether the country had finally started getting back on the right track.