New Report Shows Racial Wealth Gap is Structural and Fueled by Public Policy

Release Date: 
February 6, 2017

Individual choices are not the source of racial inequality.

New York, NY (February 6, 2017) – Today, Demos and the Institute on Assets & Social Policy (IASP) at Brandeis University’s Heller School for Social Policy and Management released a new report that explores popular explanations for the racial wealth gap between African-American, Latino and white households. The report demonstrates that changing individual behavior in areas such as education, family structure, full- or part-time employment, and personal consumption habits would not reverse the economic harm done by structural racism. Instead public policy is needed to eliminate racial wealth disparities.

Following this report on February 13th, Demos and IASP will also launch a new website containing information on their Racial Wealth Audit, a framework to help evaluate a potential policy’s impact on the racial wealth gap. The website will also feature the full series of reports, statistics and policy recommendations from their research.

Using 2013 data from the Survey of Consumer Finances, the new report finds:

Attending college does not close the racial wealth gap.

  • The median white adult who attended college has 7.2 times more wealth than the median black adult who attended college and 3.9 times more wealth than the median Latino adult who attended college.

Raising children in a two-parent household does not close the racial wealth gap.

  • The median white single parent has 2.2 times more wealth than the median black two-parent household and 1.9 times more wealth than the median Latino two-parent household.


Working full time does not close the racial wealth gap.

  • The median white household that includes a full-time worker has 7.6 times more wealth than the median black household with a full-time worker. The median white household that includes a full-time worker also has 5.4 times more wealth than the median Latino household with a full-time worker.

Spending less does not close the racial wealth gap.

  • The average white household spends 1.3 times more than the average black household of the same income group.

“For centuries, white households enjoyed wealth-building opportunities that were systematically denied to people of color. Today our policies continue to impede efforts by African-American and Latino households to obtain equal access to economic security,” explains Amy Traub, Associate Director of Policy and Research at Demos and co-author of the report. “When research shows that racial privilege now outweighs a fundamental key to economic mobility, like higher education, we must demand our policymakers acknowledge this problem and create policies that address structural inequity.”

“Equal achievements in key economic indicators, such as employment and education, do not lead to equal levels of wealth and financial security for households of color.  White households have a leg up, while households of color face systematic barriers to growing wealth, reproducing our long-standing racial wealth gap over generations,” noted Thomas Shapiro, Director of the Institute on Assets and Social Policy.  “Without policies that combat ingrained wealth inequalities, the racial wealth gap that we see today will continue to persist.”

Demos and IASP created The Racial Wealth Audit, which serves as a framework for policy makers to evaluate public policy proposals for their potential to reduce the racial wealth gap. This report is the most recent in a series of studies from IASP and Demos analyzing policy solutions to close the racial wealth gap and ensure all Americans have an equal opportunity to participate in our economy. A previous report released by Demos and IASP demonstrates the role of policy in creating the racial wealth gap and its potential to reduce disparities.

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