The racial wealth gap

It is widely known that minorities in the United States earn considerably less than Whites – according to the most recent Census Bureau data, the median income for a White household in 2008 was 34.5 percent greater than for a Black household and 28 percent higher than for a Hispanic household. Poverty rates for Blacks and Hispanics are also more than double than for Whites.

What is less frequently noted is that the racial wealth gap in America is even greater than the income gap. The 2009-10 Assets and Opportunity Scorecard that was recently released by CFED reports that for the nation as a whole,  the median White household possesses net worth (the sum of all assets less liabilities) six times greater than the median minority household: $122,505 compared to $20,132. In Oklahoma, the racial wealth gap was found to be even larger: the median white household enjoys net worth of $66,468 compared to just $6,620 for the median minority household, a gap of  10:1. Additionally, the report found that 37.2 percent of minority households nationally and 43.7 percent in Oklahoma live in “asset poverty”, meaning that they lacked sufficient net worth to subsist at the poverty level for three months in the absence of income. (By comparison, 16.4 percent of White households nationally and 15.9  in Oklahoma were determined to be “asset poor”).

At the CFED conference that launched a national policy campaign around the Scorecard, I heard a powerful presentation on the racial wealth gap from Meizhu Lui,  the director of the Closing the Wealth Gap Initiative at the Insight Center for Community Economic Development and co-author of The Color of Wealth: The Story Behind the U.S. Racial Wealth Divide. Building on the pioneering research of social scientists such as Melvin Howard and Tom Shapiro, Lui’s main argument is that the vast racial wealth gap in American is far from a natural outcome or matter of chance. As much as public policies over the course of American history have actively sought to promote ownership, wealth, and economic mobility for American families – think the Homestead Act, the Federal Housing Administration, the home mortgage deduction, 529 College Savings Program – minorities must still contend with the legacy of policies, practices, and institutions from which they were excluded or which were actively designed to strip away their wealth.

Historically, of course, the appropriation of Native lands and the practice of slavery systematically concentrated property and wealth in White hands. But even in more recent times, policies and practices have continued to perpetuate or accentuate the wealth gap. Just in the area of housing – which for most Americans is the single largest source of household wealth – minorities over the past century have had to contend with segregation, housing covenants, redlining, and predatory mortgage lending. It is no surprise, then, that nationally, there is a 23 percentage point gap in home ownership rates – 71.5 percent for White households compared to 48.2 percent for minorities. In every other important area of asset development, whether it is business capital, educational opportunities, health care, or financial services, discriminatory treatment has limited minorities’ access to the building blocks of financial security.

The lessons I took away from the data and Meizhu Lui’s presentation are two-fold. First, communities and governments must acknowledge the ongoing impact of the policies that offered greatly disparate opportunities based on race and gender.  Second, public policy can and must play an important role in clearing the pathway to prosperity and in closing the wealth gap, just as  public policies played a role in creating wealth inequality. As Lui and her co-authors stress in The Color of Wealth, “the very success of programs to move white men into the middle class shows that it can be done for everyone.” Developing those inclusive policies that expand the promise of the American Dream–for everybody–needs to be our priority.


Former Executive Director David Blatt joined OK Policy in 2008 and served as its Executive Director from 2010 to 2019. He previously served as Director of Public Policy for Community Action Project of Tulsa County and as a budget analyst for the Oklahoma State Senate. He has a Ph.D. in political science from Cornell University and a B.A. from the University of Alberta. David has been selected as Political Scientist of the Year by the Oklahoma Political Science Association, Local Social Justice Champion by the Dan Allen Center for Social Justice, and Public Citizen of the Year by the National Association of Social Workers.

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