Brandeis research institute says government must merge racial wealth gap

The Institute of Assets and Social Policy, a research institute at Brandeis’ Heller School, conducted a study which found that the wealth gap between African-American and white families has been increasing since the 1980’s, and recommended ways to deal with this disparity.

The wealth gap between white and African-American families increased more than four times between 1984-2007, and middle-income white households now own far more wealth than high-income African Americans, according to an analysis released by the Institute on Assets and Social Policy (IASP) at Brandeis University….

Notably, IASP’s analysis found that by 2007, the average middle-income white household had accumulated $74,000 in wealth, an increase of $55,000 over the 23-year period, while the average high-income African-American family owned $18,000, a drop of $7,000. That resulted in a wealth gap of $56,000 for an African-American family that earned more than $50,000 in 1984 compared to a white family earning about $30,000 that same year.

These results are both shocking and disturbing in today’s day and age, when we have an African-American president and laws on the books supposedly protecting against racism in the workforce, and something has to be done to correct the flaws in the system which are allowing this gap to increase.

Those figures, IASP said, make it clear that higher income alone will not lead to increased wealth, security and economic mobility for African Americans. Consumers of color face a gauntlet of barriers — in credit, housing and taxes — that dramatically reduce the chances of economic mobility, it said.

The institute came to the conclusion that the government has to take action to correct this problem through large-scale efforts to reform the obstacles facing African-Americans in economic mobility, especially reforming the credit and loaning systems. 

“The data suggests we need renewed attention to public policies that provide real opportunities for advancement by reducing barriers to mobility inherent in our tax system and increasing transparency, regulation and access in our housing and credit markets,” said Laura Sullivan, another co-author.

How do you think our government can solve these problems?