East Bay Times: We must close the racial wealth divide
The U.S. Census Bureau recently reported new data showing median incomes rising sharply in the San Francisco area. While many in the Bay Area latched onto the promising economic outlook, I was immediately struck by the glaring headline that was missed.
Black households, already far below the average median income in the Bay Area, were locked out of this explosion of wealth.
According to the U.S. Census Bureau, the median income for the San Francisco-Oakland-Hayward metro area jumped by 9 percent from 2015 to 2016, while the median income for black households inched up just 2 percent.
The annual median income for black households in the region stands at $46,571, less than half the $106,919 for whites.
The income divide hinders black families’ ability to accumulate wealth. Right now, the ratio of the wealth divide between white households and black households is more than 10 to 1.
That has serious implication. Accrued wealth allows families to start businesses, purchase homes and send kids to college. It also allows families to sleep comfortably, knowing that an unforeseen emergency – like a car malfunction or a hospital stay – won’t leave them bankrupt.
A recent study by the Institute for Policy Studies (IPS) and Prosperity Now reveals that African American middle-income earners (those earning $37,201-$61,328 annually) have a median wealth of $11,000 while white middle- income earners have a median wealth of $160,000.
While these findings are appalling, they should shock no one. America’s racial wealth divide directly results from generations of slavery, segregation and institutionalized racism.
If we ever hope to stem the tide of wealth inequality and close the racial wealth divide in our country, we must confront the forces of systematic and institutional racism that have long stunted wealth creation in communities of color.
Breaking through barriers that prevent wealth creation will require a multi-faceted strategy on the local, state and national level.
Foremost, we must understand the building blocks necessary to develop wealth in communities with broad-based asset poverty such as African Americans and Latinos.
Understanding the barriers that stand in the way of wealth creation for those that have been historically economically marginalized — whether it is the lack of steady livable wages or not having the opportunity to build savings — is crucial to eliminating the racial inequality that has always stricken our country.
We need elected officials to take every step possible to address these inequities and invest in these households. Fixing unfair tax programs, encouraging savings and increasing incomes are just a few examples.
Finally, we must institute policies that give African Americans and other low-wealth communities the financial opportunity to build wealth. One crucial step is reducing the sky-rocketing cost of housing and increasing access to homeownership — especially in the Bay Area, where gentrification and displacement is threatening the identity of our communities.
As a parent who once lived on public assistance and struggled daily to make ends meet, I understand the toll and stress that lack of resources can have on families in need.
The racial wealth divide is devastating the African American community and our country. Recent studies found that if current trends persist and the racial wealth divide remains unaddressed over the next eight years, median Black household wealth could hit zero by 2053.
This alarming possibility makes one thing clear: We are running out of time to close the racial wealth divide in America. With urgency, immediate action and bold policies on the local, state and federal level, we can close this divide and clear a pathway to the middle class for all Americans.
Barbara Lee, D-Oakland, represents the 13th Congressional District.
By: Barbara Lee
Source: East Bay Times
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