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Generational Wealth: More Than a Day’s Journey for the Average Black Family

from OneNation Media Services
Published July 28, 2017

DETROIT, MICHIGAN (OneNation Media Services) – (July 28, 2017) – It’s been said that the more things change, the more they stay the same. If true, that would be disastrous for the long-term economic well-being of the majority of African Americans. Absent meaningful policy changes such as reforming the U.S. tax code, the prospect of building generational wealth for the average black family would get pushed further into the future – 228 years to be exact, according to a report published by the Institute for Policy Studies (IPS) and the Corporation For Economic Development (CFED).

In the August 2016 report, Ever-Growing Gap the authors focused on the fundamental role that wealth plays in achieving financial security and opportunity, and concluded that the growing wealth divide between white families and families of color is no accident. The authors contend that the state of economic affairs for the average Black or Latino family is the result of public policy designed to widen the economic gap between white households and households of color and between the wealthy and everyone else. Further, the authors determined that the nation’s ongoing recovery from the Great Recession has bypassed millions of Americans, especially households of color.

“We used to own our land and conduct business with other Black business owners, but now things have changed,” said Royce Esters, President and CEO of the National Association for Equal Justice in America. (NAEJA)

“Compton used to be like Black Wall Street in Oklahoma. There was a Black business association with 500 members. When something happened, we would all come together to help each other. We constantly preached Black capitalism and we traded with each other,” said Esters who has been an accountant based in Compton since 1964.

Believing that the lack of affordable housing is the primary barrier preventing Blacks from moving up the social and economic ladder, NAEJA is hosting an affordable housing summit in Los Angeles on August 19.

“If you have shelter, you have a chance to survive. If you don’t have a place to live, you’ll get into trouble. And, when you sell your home and leave the neighborhood, you lose your economic power.”

“I believe the next revolution will be a revolt against homelessness,” Esters said.

Other key findings of the report include:

  • Over the past 30 years the average wealth of white families has grown by 84%—1.2 times the rate of growth for the Latino population and three times the rate of growth for the black population.
  • By 2043 – the year in which it is projected that people of color will make up a majority of the U.S. population – the wealth divide between white families and Latino and black families will have doubled, on average, from about $500,000 in 2013 to over $1 million.
  • If average black family wealth continues to grow at the same pace it has over the past three decades, it would take black families 228 years to amass the same amount of wealth white families have today. That’s just 17 years shorter than the 245-year span of slavery in this country. For the average Latino family, it would take 84 years to amass the same amount of wealth White families have today – that’s the year 2097.
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