Race and Wealth: New Study Indicates a $95,000 Gap between the Incomes of Blacks and Whites

It is no secret that when it comes to statistics, they usually are not in favor of African Americans. Everywhere I turn, there are reports claiming how we are dying from a large variety of diseases more than any other race, we are incarcerated more than other race, and we also are the least educated when compared to other races. But every now and then, you hear a new study that hurts you to the core. And for me, it is the latest study that was conducted to measure the gap regarding the wealth of African Americans and whites. And the numbers are simply mind blowing to say the least.

A new study shows that the wealth gap between whites and African Americans has quadrupled between 1984 and 2007. Specifically, the study states that over the 23 year period, the gap has risen from $20,000 to $95,000. The Institute on Assets and Social Policy at Brandeis University defines wealth as the dollar value of your assets minus your debts.

Here are some of the specifics from the study.

Middle class white households saw greater increases in wealth than high income African American households. Middle-class white households saw an increase of $74,000 in wealth, while the high income black families only saw an $18,000 increase.

And when it comes to debt, in 2007, one in ten African Americans owed $3,600, which is doubling their debt since 1984.

The most startling part of the study is at least 25 percent of all African Americans had no assets to rely on during the tough economic times.

So what’s one of the causes for the significant gap between whites and blacks? The unemployment rate has caused most of these dramatic changes in income among each race.

African Americans make up an unemployment rate of 16.5 percent. This is nearly double the rate for unemployed whites. With no means to a steady income, African Americans are having to eat up their savings and rely on investments to pay the bills. In the end, African Americans only position themselves further away to achieve any real type of wealth accumulation.

So what can we do? If you are currently employed or own your own business, it is imperative that you become financially savvy. Make sure that you invest a good amount of your income (at least 20 percent), and also refrain from accumulating as much debt as possible. This is the only way that you can leave something for future generations.

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