by Taylor Lonas
It’s your favorite day of the month. You wake up in a good mood because you already know that the money was deposited into your checking account at midnight. Yep, that’s right. It’s payday Friday.
Today we’re discussing economic stability and wealth building within the African American community.
First, let’s step back and define wealth. Being wealthy equates to possessing financial freedom. You are not living paycheck to paycheck and have built up such an abundant amount of income that you don’t have to work every day to sustain your lifestyle. Wealthy individuals typically lack debt, have numerous sources of income and have a vast amount of money stashed away in savings.
In terms of wealth building, Black individuals and families lag behind their non-minority counterparts. White families are nearly six times wealthier than Black families. The median Black family income is approximately $45,000, while the median for a white family exceeds $76,000 as of 2019. This disproportionate gap grows wider as the incomes of more privileged white families surpass $142,000. This racial wealth gap not only disadvantages the Black community by restraining our economic power, but it forces families to remain cyclically indebted and financially oppressed from generation to generation.
Historically, wealth building opportunities have been forcefully snatched from Black communities through redlining, the captivity of slavery, and discriminatory politics, all of which persist in varying forms in the modern world today. Society intentionally perpetuates the systems that refuse to provide equitable economic opportunities to all citizens. This suppression has affected Black families for generations and has played a role in depriving the population of monetary inheritances.
The act of leaving behind large inheritances to one’s descendants or family members is the epitome of generational wealth, which is a notion that many marginalized communities can only dream of. Realistically, it is a handout and safety net that ensures the recipients are economically safe and secure, most times with little or no work required.
However, if you were to step away from the exquisitely furnished and far spread homes of the suburbs and venture into the “urban” cities where homes are found within battered brick apartments, there you would find families living paycheck to paycheck and still more wondering where their next dollar will come from. There are families that are sleeping three or more to a bed, relying on school meals to feed their children, and others who work back to back shifts at numerous jobs to adapt to the demands of unpaid bills. People are forced to work for minimum wage as society continues to deny them a livable wage. Meanwhile, first-generation students from low-income households are swept into predatory lending and excessive college debt. Each of these factors affects Black individuals by decreasing their chances of being able to purchase homes, afford good schools for their kids, set aside money to build up wealth, access higher education and so on.
So how can we “fix” this? How do we reduce the severity of the racial wage and wealth gap while working to eliminate it altogether?
Minimum wage needs to be increased nationally to enable marginalized families to comfortably survive. Discriminatory home lending practices should be lawfully prohibited and education needs to be affordable and accessible. While these changes won’t eliminate the racial wealth gap, they’re a step in the right direction to financially improve the quality of life for low-income Black families.