By Kate Davidson, Wall Street Journal
Two hundred and twenty-eight years: That’s how long it would take for African-Americans to accumulate the same amount of wealth whites have now if current policies remain in place, according to a new analysis from the Corporation for Enterprise Development and Institute for Policy Studies.
The stunning estimate is part of a study the two groups released this week on the racial wealth divide in the U.S., highlighting the growing disparity between Americans of color and everyone else, the policies that contributed to a widening divide and proposals to help reverse the trend.
CFED and IPS looked at 30 years of data from the Federal Reserve’s Survey of Consumer Finances, which includes information on Americans’ balance sheets, income, pensions and demographic characteristics.
Over the past 30 years, they found the average wealth of white families has grown by 84%, three times as fast as the rate for African-American families and 1.2 times the growth rate for Latino families.
To put that in dollar terms, if the past 30 years were to repeat, whites would see their wealth increase by about $18,000 a year on average, while Latino household wealth would increase an average $2,250 a year and wealth for African-Americans would grow by just $750 annually.
At the current rate, it would take until the year 2241 for the average black family to accumulate wealth equal to what white families have today. And it would take Latinos until 2097 to reach parity with whites, the report said, assuming the average wealth of white families holds steady at today’s levels.