Study highlights sad truth about wealth gap

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Chicago Sun-Times
By: Mary Mitchell
June 3, 2014

What's in that designer handbag?

If you are black or brown, chances are there's not much money.

A recent report by the Center for Global Policy Solutions concludes that African-Americans are "beyond broke," with just $200 in median wealth compared to $23,000 held by whites, and $19,500 held by Asians.

I know what broke is.

But "beyond broke" means you're likely to leave here with someone having to take up a collection.

When it comes to liquid wealth - financial assets that can quickly be turned into cash - whites have more than 100 times that of blacks and more than 65 times that held by Latinos, the study found.

"When retirement savings are taken out of the analysis, blacks are found to hold a mere $25 and Latinos just $100 in liquid wealth, compared to $3,000 held by the typical white household. And African-Americans and Latinos are over twice as likely as whites to hold no financial assets at all, and to have no or negative net worth," according to the report.

It's a sad situation that is highlighted by the passing of the generation of African-Americans that migrated from the South.

For instance, an uncle recently died after a lengthy illness and I was shocked to learn he was uninsured and penniless.

I knew he didn't have much, but here's a man that came to Chicago from the cotton fields of Clarksdale, Miss., in the 1950s with a few dollars in his pocket.

He worked manual labor jobs all his life, but when he was laid to rest at 86 years old, my uncle didn't have two cents in a bank account.

It was heartbreaking.

Worst yet, his penniless death meant no financial assets would be passed on - not even a $1 - to descendants who are struggling financially.

Despite the Civil Rights Act of 1964, Brown v. Board of Education, and the War on Poverty, like most blacks in my generation, these descendants whose parents endured the Jim Crow South have to start from scratch creating wealth.

Still, some argue that the racial wealth gap is due to a lack of financial literacy. Another argument from critics of these kinds of studies (this one was based on U.S. Census data) is that blacks are responsible for the gap because they have more out-of-wedlock births and lower educational achievement.

But I don't believe people whose blood, sweat and tears provided whites with wealth in the South didn't try to accumulate some wealth of their own when they arrived full of hope in the North.

Yet instead of a level playing field, these poorly educated Southern blacks were bamboozled at every turn.

At a recent news conference, Maya Rockeymoore, president of the Center for Global Policy Solutions, the think tank responsible for the report, said the African-American community should know "it's not about them."

"It's about the system and how it is structured with policies that deny their opportunity to have equitable chances for growing wealth in this nation," Rockeymoore said at a National Newspaper Publishers Association press conference.

"There are elements of personal responsibility connected to how we build and grow wealth, but the structural elements outweigh the personal considerations."

Among the several recommendations listed in the report is an idea for the U.S. to enact a universal "baby bond" trust program. The "baby bond" would be available for all newborns regardless of the family's net worth, although families with the least net worth would get the maximum seed funding.

Unfortunately, too many Americans are still in denial about the existence of racialized policies for the program to likely find support in Congress.

But this study is a wake-up call for blacks.

After a lifetime of work, we need to leave behind more than our history.

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This page contains a single entry by CFED published on June 3, 2014 3:57 PM.

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