Tackling the Black-White Wealth Gap

Intergenerational assets may be key to combating inequality

Avis Jones-DeWeever, director of the National Council of Negro Women’s Research, Public Policy and Information Center, pointed to the fragility of the black middle class.

“It is important to note that much of the black middle class that we have today are fairly newcomers to this status. Most are either their first or second generation within this status,” she said. And because many black middle class families must often stretch their incomes to accommodate extended family members, they have less disposable income to invest in potential wealth-building opportunities.

Jones-DeWeever also observed a new green economy may be “the next potential dot-com-like boom. “The scary part is, that as it stands today, African Americans are not positioned to substantially take part in that potential economic boon,” she said, pointing to research that shows that African Americans are severely underrepresented at only 5% in terms of potential green employment targeted by the Recovery Act.

The bursting housing bubble hasn’t been an equal opportunity crisis, noted James Carr, CEO of the National Community Reinvestment Coalition. As a result, millions of middle class African American and Latino households, who have fewer savings and less ability to survive lengthy bouts of unemployment, could fall out of the middle class before the economy recovers. This is exacerbated by the fact that they were disproportionately targeted for deceptive mortgages.

Carr proposed a three-fold response to the problem that includes limiting damage to home prices caused by unavoidable foreclosures; channeling economic recovery funding into communities disproportionately targeted for unfair and reckless lending; and passing anti-predatory lending legislation and an enhanced Community Reinvestment Act to protect consumers from future fraudulent practices and abuses.

“Government action should not be limited to ending predatory lending, but should also include providing focused attention on helping communities rebuild,” said Carr. “Prioritizing areas hardest hit by widespread unemployment and mounting foreclosures would more directly help stabilize the housing market and steady falling home prices that continue to undermine the strength of U.S. financial institutions.”

Further Reading: Wealth For Life Principles

1. I Will Live Within My Means
2. I Will Maximize My Income Potential Through Education and Training
3. I Will Effectively Manage My Budget, Credit, Debt, and Tax Obligations
4. I Will Save At Least 10% of My Income
5. I Will Use Homeownership as a Foundation For Building Wealth
6. I Will Devise An Investment Plan For My Retirement Needs And Childrens’ Education
7. I Will Ensure That My Entire Family Adheres To Sensible Money Management Principles
8. I Will Support the Creation and Growth of Minority-Owned Businesses
9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate Planning

10. I Will Strengthen My Community Through Philanthropy

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ACROSS THE WEB
  • http://www.abc-md.org Diane Bell McKoy

    I appreciate the article but quite disappointed that it failed to mention that this was co-sponsored by Associated Black Charities. And as Joint Center would share with you, ABC paid for the event and suggested the event.
    If we are going to change the wealth gap for African Americans than it is going to take federal/state policies and on the ground strategies. We have been at this for 5 years with a wealth of data on Baltimore, Maryland and nationally – long before many of the groups today even began the discussion. So needless to say quite disappointed that our leadership was neither recognized nor acknowleged as though it could not have come from “local up to national” to ask them to have this conversation.

  • Natalie Sealy

    I do believe that if the black community instill education in our children the wealth gap would change. Instead we keep our eyes close and our mouths shut to the violence and drug dealing in our communities caused by us. We go out and protest when a white cop kill a black young man, who was in the process of commiting a crime. Why is our community so tolerant of negative behavior? Help to put a stop to the negative behavior, and promote the need for an excellent education; we will be well on our way to narrowing the wealth gap.

  • Isaac H. Howell

    Natalie I agree to your statement and I believe you said it all. If our black community stops iwth all the excuses about how the white man and the china man and thee indian man are working together and that we have to change for black people there needs to be a stronger movement. going into these projects and enforcing new change. if need be bring the military into these streets and have the military bring peace and rebuild the projects. if gund shops and alchoal are in their reach then it leaves them with an excuse to continue violence and continue the excuses.

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