Click to enlarge image.
By Victor Corral
There is an enormous racial wealth gap in America. For every dollar of wealth owned by the average white family, the average family of color owns only 16 cents. Wealth, not just income, is the key to ensuring economic security and is what enables families to build a better future.
People of color and immigrants are uniquely positioned to ensure the US remains a globally competitive economy, but it will depend on our nation's commitment to eliminating inequities and helping all families build their wealth.
Economists William Darity, Jr. and Darrick Hamilton, writing in the American Prospect, argue against the racist assumptions people make to rationalize the racial wealth gap:
In an April lecture at Morehouse College, Federal Reserve Chair Ben Bernanke attributed the racial wealth gap to a lack of "financial literacy" on the part of blacks, particularly with respect to savings behavior.Such an explanation, however, is not the case. Economists ranging from Milton Friedman to Marjorie Galenson to the recently deceased founder of the Caucus of Black Economists, Marcus Alexis, found that, after accounting for household income, blacks historically have had a slightly higher savings rate than whites. In 2004, economists Maury Gittleman and Edward Wolff also found that blacks save at a moderately higher rate than do whites, again after adjusting for household income. This indicates even greater black frugality because many higher-income blacks offer more support to lower-income relatives than do whites, further reducing their resources to save.
