IE 11 is not supported. For an optimal experience visit our site on another browser.

Report details black-white wealth inequality

Though income and education gaps between black and white Americans have narrowed significantly, black households have only one-tenth the net worth of white households, according to a new National Urban League report.
/ Source: The Associated Press

Though income and education gaps between black and white Americans have narrowed significantly, black households still have barely one-tenth the net worth of white households, according to a new National Urban League report.

Marc H. Morial, Urban League president, said the black middle class’ tenuous hold on prosperity reflects racial discrimination in housing and other wealth-building arenas — both historically and now — and suggests that today’s civil rights battles are largely economic.

“Since the 1960s, one of the success stories is the growth of the African-American middle class — those who are college-educated, participating throughout the American economy and growing in stature and influence,” Morial said. “But what we face is that these successes of 40 years are being eroded. The danger is the great backslide that can occur.”

“The State of Black America 2005,” scheduled to be released Wednesday at a Washington news conference, comes as the Urban League also calls on Congress to assemble a bipartisan commission on economic equality and advancement.

Overall well-being unchanged
Analyzing a broad range of government statistics, the report compares life quality for blacks and whites in dozens of categories related to economics, health, education, civic participation and social justice. Taking the whole picture into account, the report produced a measure of the overall well-being of African Americans, described in the report as barely three-fourths that of whites — a ratio unchanged from last year to this year.

“Last year, I said I looked forward to seeing these numbers improve. Our update, however, does not represent an improvement,” said James Diffley of Global Insight, the Philadelphia-based economic research firm that compiled the data. “There is a gap between black America and white America.”

Among the report’s findings:

  • Blacks have more than double the unemployment rate of whites.
  • Less than half of blacks own homes, compared with more than three-fourths of whites.
  • Black youth are more likely than whites to have poorly trained teachers, live in poverty and not have health insurance.
inequality in America

Some significant gains
Still, the report also makes clear that black America has made significant gains in some areas.

Since 1960, when black men earned only 50 cents for every dollar earned by white men, income gaps have narrowed as the black middle class has grown and become more educated. In 2000, black men earned 64 cents on the dollar, according to Thomas M. Shapiro, a professor of law and social policy at Brandeis University who wrote an essay, “The Racial Wealth Gap,” in the Urban League’s report.

But Shapiro argues that income merely reflects recent advances.

In contrast, net worth shows how families accumulate gains over generations. “Wealth really rounds the picture out and gives us a deeper perspective,” said Shapiro, whose essay is based on his book “The Hidden Cost of Being African American,” published last year.

The median net worth of black households has remained virtually unchanged for more than a decade compared with white households: In 2000, black households on average were worth $6,166, compared with $67,000 for whites, census data show. The ratio was virtually identical in the early 1990s.

Home ownership is key
Since most Americans build wealth through home ownership, inequities in the housing market explain much of the gap, Shapiro said. Historically, blacks were explicitly barred from buying homes in some neighborhoods.

Today, studies show, among blacks and whites with comparable credit histories, blacks are 60 percent more likely to be denied home loans as whites, he said.

This wealth gap, Shapiro writes, “is reversing gains earned in schools and on jobs and making inequality worse.”

The Urban League report also includes essays on such wide-ranging topics as government inaction regarding reported abuse by law enforcement officers and the theory that black students underachieve because they fear being accused of “acting white.”

It concludes with several recommendations for change, including: renewing the federal Voting Rights Act before it expires in 2007; creating a national program to reincorporate former prisoners into society; and, setting aside government funding for universal preschool.

It also stresses that middle-class black Americans should donate time and money to help alleviate inequality. “Those who have achieved need to give back,” Morial said.