Wealth represents the accumulation of assets during a lifetime, and thus wealth gap are always larger than income gaps. Nonetheless, the wealth gaps between black and white Americans are remarkable.
In the chart below the vertical axis measures average per capita white/black wealth as a multiple: that is, back in 1860, the average white person had more than 50 times the wealth of the average black person on a per capita basis, but now the multiple is more like 6 times.
Clearly, the drop in the white-to-black wealth ratio was fastest back in the 19th century.
- About one-quarter of the convergence can be explained by the white slaveholders’ loss of slaves as part of their “wealth,” but the rest of the convergence happened as wealth of blacks grew relatively more rapidly than that of whites.
- The white-to-black ratio levels out from 1900 up to about 1930, during a time of legalized discrimination and segregation for black Americans.
- There is some move toward greater equality of wealth after World War II,
- and an additional move after the passage of the Civil Rights Act of 1964.
- but there has been a move toward greater inequality since about 1980, which seems mainly due to:
- the fact that those who already had the resources to own housing or to have stock market investments have done especially well since then, while those who did not already own such assets had no way to benefit from the capital gains that have occurred.
…Here’s another way to slice the data, comparing the black share of the U.S population to the black share of total wealth.
…The data for the above graph is publicly available at https://www.elloraderenoncourt.com/us-inequality-data.
There’s a lot that can be said about all this, but I’ll limit myself to the obvious: Four decades–call it two generations–of no progress on the white-to-black wealth ratio is a long, long time.