Before COVID-19, the Institute for Policy Studies projected that 50% of Black Americans were on the road to zero (or negative) wealth by 2053.¹ Covid-19’s disproportionate impact on Black America has likely accelerated the community’s approach to zero wealth. Underscoring the lack of progress we have made with respect to economic betterment among Black Americans, the Federal Reserve Bank reported that the racial wealth gap was wider in 2016 than it was in 1968.² Today, it would take the net worth of 11.5 Black households to equal the worth of 1 white U.S. household.² In 2016, the median Black American household possessed $13,024 in wealth.² In that same year, white American households at the median were worth $149,703.² According to Edward Wolff, a New York University economist, the median Black family—minus vehicles and other depreciating assets—is worth just $1,700.³ Thirty years ago, that same Black family was worth $6,800 when adjusted for inflation.³

Both the racial wealth gap and path to zero wealth were formed over centuries of Black neglect and white wealth infusions. Throughout this nation’s history, Black Americans have been intentionally deprived of opportunities and used as a wealth-building resource to the advantage of whites. To cite but a few of these instances—beginning with slavery—an estimated $20.3 trillion in wages were stolen from slaves.⁴ To give context to the magnitude of that plunder, the entire U.S. GDP was $21.4 trillion in 2019. The total value of slaves in 1860 was about $4 billion total.⁴  Slaves were worth more than the combined value of all the banks, railroads, and factories in the U.S. at the time.⁴  In today’s dollars, that would come out to as much as $42 trillion, accounting for inflation and compounding interest.⁴ To continue, the Homestead Act of 1862—which provided millions of acres of land for white ownership—furnished recent immigrants arriving from Europe with an economic base; additionally, subsequent land grant initiatives like the Timber Culture Act of 1873, the Kincaid Amendment of 1904, the Enlarged Homestead Act of 1909, and the Stock-Raising Homestead Act of 1916 all excluded Black Americans. Furthering this legacy of codified exclusion, the Social Security Act of 1935—which provided a safety net for workers by assuring them income in retirement—did not extend that benefit to two professions: agricultural and domestic workers. 65% of workers in these two industries were descendants of chattel slavery in the U.S.⁵ Many more examples could be added to the list of events that produced the present wealth gap between white and Black America (white mob violence, redlining, etc.), but we cannot fail to note the significance of these recurring and discriminatory infusions of federal resources exclusively into white families. The ADOS Advocacy Foundation’s Black Agenda lists policies that the federal government must adopt to assist in closing the lineage-based, racial wealth gap.

References

1. Collins, Chuck. “Report: The Road to Zero Wealth.” Institute for Policy Studies, September 11, 2017. https://ips-dc.org/report-the-road-to-zero-wealth/
   
   
2. Long, Heather, and Andrew Dam. “The Black-White Economic Gap Remains as Wide as in 1968 – The Washington Post.” The Washington Post, 4 June 2020, https://www.washingtonpost.com/business/2020/06/04/economic-divide-black-households/
   
   

3. Wolff, Edward N. “Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered?” National Bureau of Economic Research, December 4, 2017. https://doi.org/10.3386/w24085.
   
   
4. Saraiva, Catarina. Four Numbers That Show the Cost of Slavery on Black Wealth Today. Bloomberg, 18 Mar. 2021, https://www.bloomberg.com/news/articles/2021-03-18/pay-check-podcast-episode-2-how-much-did-slavery-in-u-s-cost-black-wealth
   
   
5. DeWitt, Larry. “The Decision to Exclude Agricultural and Domestic Workers from the 1935 Social Security Act.” Social Security Administration Research, Statistics, and Policy Analysis, Social Security Office of Retirement and Disability Policy, 4 Nov. 2010, https://www.ssa.gov/policy/docs/ssb/v70n4/v70n4p49.html#:~:text=Social%20Security%20Act-,The%20Decision%20to%20Exclude%20Agricultural%20and%20Domestic,the%201935%20Social%20Security%20Act&text=The%20Social%20Security%20Act%20of,of%20whom%20were%20African%20Americans.