By bridging the racial wealth divide, we can reduce the economic inequality that’s holding down our entire country.
The Dizzying Racial Wealth Divide
The billionaires that make up the “Forbes 400” list have as much wealth as the entire African-American population of the U.S., over 41 million people, according to a new analysis by Bob Lord of the Institute for Policy Studies. Lord calls it “Dr. King’s Nightmare.”
In the aftermath of the 2008 economic meltdown, wealth owned by households of color declined dramatically, as home values collapsed. The wealth of the richest 1 percent also declined in 2009, but rebounded quickly in subsequent years.
As Bob Lord writes in Other Words, “The net worth of just 400 billionaires, a group that could fit into a high school gym, is on par with the collective wealth of more than 14 million African- American households. Both groups possess some $2 trillion, about three percent of our national net worth of $77 trillion.”
The only U.S. African-American on the Forbes 400 list is Oprah Winfrey, who has a net worth of $2.9 billion, placing her 184th on the list. She is one of 7 Black billionaires in the whole world.
The U.S. has a persistent racial wealth divide, rooted in the legacy of discrimination in asset building, starting with slavery up to present day discrimination in mortgage lending. The homeownership rate for whites is 73.3 percent, 43.1 percent for African-Americans, and 47.6 percent for Latinos.
But present-day inequality is the poisonous result of eroding net worth among African-American and Latino households and an exploding concentration of wealth in the top 1 percent, and within that, among the richest 400 billionaires. The average net worth of the Forbes 400 richest rose $800 million to a record $5 billion in the last year.
African-Americans make up 13 percent of the U.S. population, but have only 2.7 percent of total wealth. The median wealth for an African American household, according to a 2010 survey, is $4,900; for whites, it is $97,000.
If current trends continue, the Forbes 400 will soon have as much wealth as the entire Latino population of over 53 million people, 17 percent of the U.S. population.