The Racial Wealth Gap Is a Symptom of Our Long-Broken Economy
June 19, 2019
By Rakeen Mabud, Kendra Bozarth
Why This Matters is a series from Roosevelt staff connecting our individual work—from papers to reports and everything in between—to our broader vision of creating a better, more equitable economic and political system. This series will give readers the top takeaways from our latest writing and thinking, with a focus on why they matter as we redefine the rules that guide our social and economic realities.
In “Exploring Guaranteed Income Through a Racial and Gender Justice Lens,” Jhumpa Bhattacharya of the Insight Center connects two of the ideas that have bubbled up to the surface of the 2020 political debate: The need to address the racial wealth gap that exists between people of color—particularly Black Americans—and white Americans, and a guaranteed income as one big idea that is capable of redefining these wealth divides. Ultimately, Jhumpa finds that it is only a “universal basic income plus” model, first popularized by former Roosevelt Fellow and current Community Change President Dorian Warren, that will allow for wealth accumulation for low-income communities of color and address the racial wealth divide.
Closing racial wealth divides requires centering and squarely addressing the racist legacies of slavery, Jim Crow, and a whole host of other political and economic rules that continue to disadvantage people in this country based on the color of their skin. Cash is one tool with which to address these issues, but it should not and cannot not be the only one.
Wealth—defined as what someone owns minus what they owe—is an essential part of economic freedom in America. Wealth allows people to deal with unexpected emergencies, such as being laid off or a sudden illness, and also invest in opportunities like education and home ownership. Yet, we have massive wealth inequality in this country, which means that economic freedom is out of reach for millions.
Racial wealth divides in this country are vast: In 2016, the median white household held more than 40 times the amount of wealth as the median Black household. This gap is rooted in years of historical disadvantage and conscious policy choices. From slavery and Jim Crow to New Deal era exclusions and redlining to discrimination—the list, unfortunately, goes on and on—Black Americans have had the economy and our society stacked against them since the founding of this country. Just as wealth begets wealth, historical disadvantages beget contemporary disadvantages.
Ultimately, we need a comprehensive approach—one that includes cash transfers, centers communities of color, and embarks on a national journey of truth and reconciliation—to truly ensure that economic freedom is accessible to all.