The wealth divide between an average African-American family and the average white family is not going to close anytime soon, according to a new study from the Corporation for Enterprise Development and the Institute for Policy Studies.
The report "The Ever-Growing Gap: Failing to Address the Status Quo Will Drive the Racial Wealth Divide for Centuries to Come" reveals that an average black family will take nearly 228 years to collect the amount of wealth that is presently enjoyed by its white family counterpart.
"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," the study points out.
The study took into consideration aspects such as a family's financial wealth, including stocks and bonds. It also took into account the business capital, real estate, etc., but did not consider things such as consumer appliances or durables such as vehicles. The study did not focus on Pacific Islanders, Asian Americans and Native Americans.
The findings of the report were based on Federal Reserve's Survey of Consumer Finance data for 30 years — between 1983 and 2013 — and discovered that the wealth of an average white family grew by 84 percent each year, which is three times the growth rate for an average African-American family.
In the event the trend for the last three decades were to be repeated, the coming three decades would see the wealth of an average white household increase by more than $18,000 each year. By contrast, the wealth of an average black household would grow by just $750.
According to the study, by 2043 people of color will comprise more than 50 percent of the U.S. population, and the wealth divide between an average black/Latino and white household would have increased twofold from $500,000 in 2013 to more than $1 million.
The authors of the study believe that the racial wealth divide is not increasing just because of income inequalities, but also since the amassed wealth is a way to transfer economic success from one generation to another.
"This growing wealth divide is no accident. It is the result of public policy designed to widen the economic chasm between white households and households of color and between the wealthy and everyone else," noted Chuck Collins, co-author of the study.
Collins speaks of a grim future if substantial reforms are not executed, because the wealth inequality and the divide between the races will continue to widen.
