Black wealth matters and there is a difference in the wealth that white families accumulate as opposed to their white counterparts.
In the midst of the worst global pandemic the world has faced in over a century, the Black Lives Matter (BLM) movement has exploded in America and even spurred similar protests across the globe. The year 2020 will undoubtedly go down in the history books as the year the U.S finally confronted issues related to police brutality, systemic racism, and “white privilege.”
A Closer Look Into White Economic Privilege
BLM protests across the nation have brought attention to the existence of “white economic privilege.” The Civil Rights Movement of the 1960s resulted in legislation that was intended to prevent discrimination and promote racial equality. Since that time, African Americans have seen some improvement in those areas; yet the economic disparity between White and African Americans remains as wide as it was five decades ago.
In 1968, median household wealth for African Americans was $6,674 compared with $70,786 for white households, according to data from the historical Survey of Consumer Finances. In 2016, the median household wealth for whites was $149,703 compared to just $13,024 for African Americans. That makes the wealth gap even greater now than it was 50 years ago. To put those numbers in perspective, you would have to combine the net worth of 11.5 African American households to get the net worth of a typical white U.S. household.
Maintaing the Racial Wealth Gap
The BLM movement has forced all Americans to take a hard look at the economic disparity between white and black Americans as well as the reasons why that disparity continues to exist. African Americans are more likely to work in low wage jobs and to get paid less than Whites in comparable positions.
Along with low employment and low wages, the gap in homeownership between White and African Americans also contributes to the racial wealth gap. In 2016, 72 percent of White families owned their home, compared to just 44 percent of Black families, according to the Racial Wealth Divide report released by the Institute for Policy Studies. The wealth gap is perpetuated by the fact that family wealth needs to be transferred from one generation to the next.
Why the Racial Wealth Gap Matters
One of the goals of the Black Lives Matter movement is to trigger structural policy changes that will help eliminate racial injustice as well as white economic privilege. One thing that African Americans can do now, however, is to take proactive steps to preserve their wealth for future generations, just as Whites do. Currently, whites are ten times more likely to receive a family inheritance than are African Americans.
For African Americans, building wealth is only the first step. Ensuring that hard earned assets such as cash accounts, retirement funds, family heirlooms and most importantly, real property remain in the family is an equally important second step. The best way to do that is through the creation of a Living Trust that ensures assets are passed on to family members without the need to go through the costly and time-consuming process of probate.
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