Click here for a copy of a presentation of this research to the OKDHS Practice and Policy Lecture Series on 4/25/2013
Oklahoma’s prosperity depends on the financial success and economic achievement of the people who call it home. For a state that has always been rich in natural resources and entrepreneurial spirit, the future continues to look bright. Yet we’ve also inherited a legacy of discrimination that historically impeded economic opportunity for people of color and created a wealth deficit that persists today. A report released today by Oklahoma Policy Institute, Closing the Opportunity Gap: Building Equity in Oklahoma, outlines an equity agenda for the future, one that acknowledges the racial wealth gap and income inequality as products of our collective history, culture, and public policies.
When wealth is measured in terms of financial assets, i.e. a home or savings account, White households in the U.S. have nearly twenty times more wealth than Black households and eighteen times more wealth than Hispanic households. These are the largest gaps in racial wealth observed since the government began publishing data a quarter century ago. Two out of every five, or 39.1 percent, of households of color in Oklahoma are asset poor, nearly double the rate for White households. The asset poverty rate measures the percentage of households without sufficient assets to subsist at the poverty level for at least three months if their income was disrupted.
There is mounting evidence that assets– distinct from income – promote financial security, interrupt intergenerational poverty, and improve household health and quality of life. Assets are the key to achieving economic security over a lifetime. They enable individuals and families to earn enough to make ends meet, save, invest, and build the wealth that’s necessary for a prosperous future. The three core areas of assets measured by this issue brief are foundational assets, generative assets, and regenerative assets.
Foundational assets (health, education, and transportation) are prerequisites to securing employment that generates enough income to meet basic needs and beyond. Generative assets (employment, entrepreneurship, and income) refer to earned income and cash flows that equip a person to live, maintain financial security, and invest in a brighter future. Regenerative assets (savings, investment, and homeownership) are items of value that generate wealth independent of income earned through paid labor. Left unaddressed, the wide disparities observed by race and ethnicity in each of these core asset areas threatens Oklahoma’s ability to achieve shared prosperity into the future.
Oklahoma is transforming from a state with a predominately white population, to one that is increasingly diverse. Children of color now comprise a majority of the population of children in 11 of the state’s 77 counties, and 44 percent of all children in Oklahoma are racial and ethnic minorities. Oklahoma’s changing demographics demand that equity move to the forefront of our economic development agenda. Persistent inequality is a structural impediment to development and a drag on economic growth. Diverse communities are inextricably linked by commerce, travel, and investment. Equity can no longer be thought of solely as a social justice or a minority concern; it’s an economic imperative for Oklahoma’s future.
This post is the first in a multi-part series, based on this report, that will assess the state of the racial wealth gap in Oklahoma and propose solutions for closing the gap by fostering equitable access to income, assets, and opportunity. The next post will delve into the historical roots of the wealth gap, and how the effects of past policies can still be seen today. Subsequent posts will present data on a wide range of asset disparities by race and ethnicity in Oklahoma, discuss the crucial role of intergenerational wealth transfers, and review policy options for addressing the gap.
Closing the Opportunity Gap: Building Equity in Oklahoma Click here for a 2-page executive summary and/or the full report