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The Wealth Gap

The Wealth Gap

The wealth Gap

How big is the gap?
The wealth Gap - It's staggering. The net worth of a typical white family in 2016 — including home, retirement accounts, and all assets — was nearly 10 times greater than that of a Black family, at $171,000 to $17,600. This gulf even includes African Americans whose households are headed by college graduates, who actually have less net worth than white households headed by high school dropouts. Wealth begets wealth through generations, and African Americans have missed out on that transfer for centuries. Just 8 percent of Black families receive an inheritance from parents or grandparents. For someone with no ­buffer of savings and no family member who can help, any financial emergency — a sudden illness or job loss — is a catastrophe.

How did the gap start?
After the Civil War, Reconstruction was supposed to begin making up for the hundreds of years of slavery during which African Americans had wages, property, and even spouses and children stolen from them. But the "40 acres and a mule" promised by Gen. William Sherman was yanked away by Abraham Lincoln's successor, President Andrew Johnson, and the little land that had been parceled out was returned to the white former slaveholders. Most Blacks in the South after the war were forced to toil as sharecroppers, perpetually in debt to white landowners. Blacks who managed to succeed despite all this fell victim to white terrorism, as in the 1898 Wilmington, North Carolina, massacre that wiped out a Black-led government in the nation's only successful coup, or the 1921 Tulsa massacre in which jealous whites attacked, burned, and even bombed from the air a thriving neighborhood known as Black Wall Street. With segregation and Jim Crow laws depriving them of the vote and of economic opportunity, many Blacks abandoned the South in the Great Migration, only to find more-subtle discrimination waiting in the North.

What kind of discrimination?
The New Deal was meant to help the poor across America, but it had racism baked into it. Rather than overturning racial covenants that kept Blacks out of desirable neighborhoods, the new Federal Housing Administration promoted them. The government Home Owners' Loan Corporation marked majority-Black districts in red on maps, so banks would not extend government-insured loans there — suppressing both Black homeownership and business development. The corrosive effects of that "redlining" persist to this day. After World War II, the G.I. Bill, which paid for college or vocational training for veterans and offered subsidized mortgages, was administered by the states, which funneled the benefits away from Blacks. And the 1956 Federal Highway Act that helped create the suburbs bulldozed and isolated black neighborhoods, creating ghettos.

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