Wealth in Black and White

Yahoo News Reported: 2013 research from Brandeis University shows that the five biggest components in the growing gap between whites and blacks are (in order, from biggest to smallest) years of home-ownership, income, unemployment, college education, and inheritance.

Residential segregation is a big reason home-ownership has created a big divide between blacks and whites, the researchers write, as it "artificially lowers demand" and therefore makes building equity tougher in a nonwhite neighborhood. And because whites tend to have more family inheritance and financial help, they also tend to buy homes earlier, giving them more time to build equity. Historic discrimination in mortgage lending added to this gap, as well as the fact that blacks have more of their wealth tied up in their homes than whites do. That means that when the housing crash came, it had a bigger impact on blacks than whites.

The intertwined racial gaps in income, employment, and education all add to this as well, making it harder to get the money with which to build wealth. Add to that the fact that blacks also tend to graduate college with more student debt than whites, and building wealth (even with a good education and a good job) gets all the harder. And as there are also employment, income, and education achievement gaps between Hispanics and non-Hispanic whites as well, the same factors might be at work in creating that wealth gap.

A thought on reversing the problem. Overcoming by taking control and taking responsibility for what you can control. There will always be a disparity in this country when it comes to race and pay although the fight for equality must continue. It was once said when America gets a cold, minorities catch the flu. The reason for this saying is because whatever happens in our culture if felt 10 times stronger by minorities. Evidence of this is unemployment rates which tends to be double that of Caucasian Americans. Fact not fiction that minorities are often shut out of management and or making, on average, 15%-25% less than their counterparts even though the minority may have achieved a higher educational level. These are the things not discussed by implemented that impact minorities negatively.


While reading this article I began to think of some of the reasons why this wealth gap exists. When minorities are educated they are often educated funded by student loans which increases the debt of such individuals before even graduating college. This debt would effect eligibility regarding debt to income ratio for home ownership guidelines. Minorities are often underpaid compared to that of their white counterparts and opportunities are typically less abundant. Minorities, for some reason, often fail to discover special programs and guidelines to help with home ownership mainly because they exists but are not widely advertised to minorities. Money management skills are often lacking in lower-income communities with emphasis on unimportant depreciating assets (clothes, cars, etc.) that are not indicative of wealth. Minorities Need: financial literacy, money management, and the desire to build a better life and that starts with minorities initiating that desire by seeking knowledge for themselves. The world will not share it but there are internet resource and the library is free.

Here's another aspect of the income gap that is interesting. If women are underpaid compared to what men earn in the same roles or positions, they are likely unable to create wealth accordingly. It is no secret in the African American community, 72% of children are born out of wedlock and households are headed by these “underpaid” women (in comparison to men). On top of that you have African American people that practice a culture of broken homes instead of being married and attempting to build wealth together. Instead you have households struggling to pay rent in separate locations with child support payments hoping to help the family to survive, not thrive. African Americans, in an attempt to achieve wealth, need to marry ( smart partnering with someone with some sense), and keep their families together in order to build wealth. If two people work together maybe they can pay for one's education or skills in order to increase wealth. Then the other person can pursue their degree and pay for the education rather than taking on loans. If you purchase a home, below your means, you will at least have a tax write off and can save to pay for your children's education while learning to invest money so one obtains a return on investment. This dynamic is an equal problem within the African American community along with being underpaid.

There is no denying that the lack of ability to build wealth from past generations (slavery) is often a factor as well. A system that pays minorities less than other races will effect generational wealth.

Home-ownership

Supporting other family members

Investing in your future, 401k's and investments.


Every race and gender has been effected by this situation but which group suffers the most?

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