Sunday, January 24, 2021

The Racial Wealth Gap Explained in 60 Seconds – The Financial Reality of White Privilege (Video)

Attorney and Emmy Nominated Film Producer Antonio Moore explains the racial reality of the American wealth gap using recent reports and data. Subscribe to his YouTube Channel @tonetalks

Moore wrote this in his piece on inequality.org titled “Our Real Racial Wealth Gap Story”

Over 50 years after Martin Luther King Jr.’s March on Washington, the median white family has 70 times more wealth than typical black families. … A recent study by the Pew Research Center used data from the Federal Reserve Survey of Consumer Finance to show that the median white American household has 13 times the wealth of the median black household. But the data used to support this study’s bleak findings may have used accounting that actually understates the gap in wealth between white and black families.

New York University Professor Edward Wolff, one of the foremost economists studying wealth inequality, looks at the same Federal Reserve dataset that the Pew researchers used in a recent report he published in the National Bureau of Economic Research (paywall). Wolff points out that the Fed includes consumer durables in its net-worth estimates.

Wolff excludes these consumer durables from his net-worth figures because these assets — everything from automobiles and televisions to furniture and household appliances — cannot be readily converted to cash and their resale value typically far understates their consumption value.

According to Wolff’s calculations, the median black family is actually only worth $1,700 when you deduct these durables. In contrast, the median white family holds $116,800 of wealth using the same accounting methods. Black household wealth, Wolff adds, actually fell during the Great Recession from $6,700 to $1,700.

Some historical context: In South Africa, during the atrocities of apartheid, the median black family held about 7 percent of typical white South African family net worth. Today, using Wolff’s analysis, the median African American family holds a mere 1.5 percent of median white American family wealth.

 

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