Recent majority Republican Supreme Court decisions have led me to wonder about the racial wealth gap. Simply stated, “The racial wealth gap refers to the disparity in assets of typical households across race and ethnicity.” (1) The racial wealth gap is real, large, and alarming.
The Census Bureau has created an excellent summary of key census data. (2) The whole piece is enlightening on who has wealth in America, and who doesn’t. Black Americans have the lowest wealth, and Asians have the highest wealth. As ethical capitalists, this is disconcerting. We would want no gap across race, and everyone to have high levels of wealth.
How wide is the percentage gap?
Black alone as a % of Asian alone: 6.8%
Hispanic origin (any race) as a % of Asian alone: 15.4%
White alone, not Hispanic as a % of Asian alone: 90.7%
This means Black and Hispanic people are at a major disadvantage compared to Whites and Asians to have wealth. How can we focus on retirement, and saving for retirement, when so many have little wealth in their day to day life? That’s something we will have to grapple with on the blog. We may need to aim for people to have more wealth, period, with retirement a small part of that ask.
How wide is the gap by overall wealth?
In the third quarter of 2022, the nation’s white households had $124.5 trillion in assets as measured by the Federal Reserve. In comparison, all Black households had under $8 trillion in total assets, Hispanic households had $5.5 trillion, and all other racial groups combined had roughly $15.7 trillion.
Usafacts.org (emphasis NOT added) (3)
Those are stunning numbers. Forget about the old line of pulling yourself up by your bootstraps. At these levels, you have half a bootstrap and no boots. The current version of exploitation capitalism has failed millions in the US, and many more millions around the world. When I was younger, I naively thought the universe cared about fairness. I have come to realize the universe doesn’t care about fair or unfair, only power. The world is undoubtedly unfair. People fight to make it more fair. Institutionalized racism is real, and won’t disappear by imagining it away. We will do our part to reduce racism and the resulting racial wealth gap.
smilingdad’s history: One of my majors in college was economics. A professor said he would sponsor me for my PhD. I asked, what can I do with an Economics PhD? The professor said, teach or go to Wall Street. The latter’s corruption was and is unappealing, and somehow I’ve ended up teaching people without the PhD.
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Notes:
(1) Investopedia https://www.investopedia.com/the-racial-wealth-gap-5105010
(2) United States Census Bureau https://www.census.gov/library/stories/2022/08/wealth-inequality-by-household-type.html#:~:text=Relative%20to%20Black%20and%20Hispanic,and%20%2431%2C700%20for%20Hispanic%20householders.
Sincerely yours,
smilingdad
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