Maybe no economic statistic captures the continuing impact of the nation’s history of inequality better than the racial wealth gap. It has left a yawning gulf that separates whites from blacks and Hispanics. And it persists across income and educational levels in ways that have left whites who are high school dropouts with a higher median new worth greater than blacks and Hispanics who are college graduates.
The gap has been known for years, but it has not received the same level of attention as the broader debate about economic inequality, which is moving closer to the center of the political debate.
“It is great we are talking about economic inequality but we have not fully brought the racial lens into it,” said Tamara Draut, vice president of policy and research for Demos, a liberal advocacy organization.
Given that, advocates are concerned that they have not developed a good way of assessing what would do the most to close the racial wealth gap. Would bolstering homeownership work? What if policymakers could find ways to help African Americans and Latinos gain as much from home ownership as whites? Could closing the college completion gap have a big impact? What effect would closing the income gap have?
Those are some of the questions Demos and the Institute for Assets and Social Policy (IASP) at Brandeis University's Heller School for Social Policy and Management hope to address with their Racial Wealth Audit, which is being unveiled on Tuesday. They hope policy makers use the tool to evaluate the impact various initiatives would have on the staggering racial wealth gap. “I think the tool helps underscore the idea that public policy matters,” Draut said. “Historically, the opportunities to build wealth in this country has been lopsided racially. And that history shows up in people’s wallets today.”