There are three major indicators of economic well-being by which we commonly measure racial economic inequality—median hourly wage, median household income, and median family net worth or wealth. For blacks, the American experience began with slavery, which allowed whites to profit off of the bodies and blood of enslaved people, who by rule of law were unable to live freely, let alone build wealth to pass along to future generations.
For example, blacks carry larger credit card balances than whites. Finally, consumers need access to safe, affordable products that build trust with customers who may be disconnected from the financial mainstream. The black-white wealth gap is a product of intentional systematic policy choices.
African Americans, however, face systemic barriers to acquiring, maintaining, and obtaining returns from assets such as housing, retirement and savings accounts, and business investments.
While a college education slightly narrows the wealth gap between blacks and whites, it remains quite large, suggesting that a college education is not the great equalizer it is often believed to be.
Moreover, under the current tax code, families with higher incomes receive increased tax incentives associated with both housing and retirement savings. Wachter and Isaac F.
Black students are more likely to attend for-profit colleges, and among students who entered college inthree-quarters of black students who dropped out of private, for-profit colleges defaulted on their student loans.
Build savings The analysis in the earlier sections of this report reinforces how critical assets are to wealth building and to intergenerational wealth transmission. As a result, Asians displaced blacks as the most economically divided racial or ethnic group in the U. Going forward, policymakers should use a targeted universalism framework to design and advance policies that ensure equity.