When Martin Luther King, Jr. was assassinated in 1968, he was in the midst of organizing what was called the Poor People’s Campaign. Its premise was straightforward: The fight for civil rights had to include economic justice and equal opportunity for black people to access and build wealth.
But just over 50 years later, the U.S. is even further away from realizing King’s vision of economic equity. A report from the progressive think tank Institute for Policy Studies, released to coincide with what would have been King’s 90th birthday, finds that in the past few decades, black wealth has actually dropped by half. Adjusted for inflation, the wealth of white families rose an average of 33% in the same time period. The number of households that control over $10 million (most of them white) shot up 856%.
In policy discussions, says report co-author and IPS project director Josh Hoxie, the wealth gap between white families and families of color tends to be discussed as a separate phenomenon than the growing divide between rich and poor in the U.S. What the IPS report, Dreams Deferred, shows is that they’re undeniably linked. Today, the median black family owns around $3,600 in wealth. The 400 richest families in America own more wealth than all black families in the U.S., and a quarter of Latino families.
“We generate a certain amount of wealth as a country year over year, and if you look at the numbers, you get a sense of where the money goes,” Hoxie says. “These assets are going to the rich over the poor, and the rich are overwhelmingly white.” In short, our economic system is failing families of color, and it’s doing so by benefitting wealthy, mostly white families that already control most of the wealth.
Trends in overall wealth inequality in the U.S. extend beyond race. Between 1983 and 2016, the richest .1% of Americans have seen their wealth grow by 133%, while the median American family has lost 3% of its wealth. In this time period, white families continued to get slightly richer, bringing in an average of $1,000 more annually. However, Latino families’ average wealth only grew by around $66 per year, and black families lost around $83 per year. As the U.S becomes more diverse and the population share of black and Latino families grows, our economy’s inability to serve non-white populations equitably becomes more and more stark.
Hoxie says the numbers in the report encapsulate something his colleague Chuck Collins, who heads up IPS’s program on inequality and the common good, always says: “Wealth is where the past meets the present.” The disparity between families of color and white families “is where the historical legacy of racist policy lives on,” Hoxie says. Systems like slavery, Jim Crow, housing discrimination, unequal benefits distribution after WWII, and mass incarceration today all drive an economic wedge between black and white in the U.S. “All of these things remain unaddressed,” Hoxie says.
In Dreams Deferred, IPS points out that the policies that could begin to address the racial wealth gap–and the overall divide between rich and poor in the U.S.–are not so different from the things King was hoping to bring about in his lifetime. Greater investments in affordable housing at the federal level, healthcare for all, a federal jobs guarantee, and higher wages: These all mirror the demands of the Poor People’s Campaign in the 1960s. “Nothing we’re talking about now is radical, given the lack of progress over the last 50 years,” Hoxie says. IPS takes the stance that the policies most likely to be effective are those that are targeted at alleviating poverty, like investment in affordable housing. Because low-wealth families are predominantly those of color, the antipoverty program would also get to the root of the racial wealth gap.
Broadly, what Hoxie and his co-authors want people to understand from the report is how the stratification between rich and poor in the U.S. thwarts our chance at a racially equitable society. A simple 1% tax on the wealth of the top .1% of the country, Hoxie says, would generate slightly less than $2 trillion over the next decade. That money could directly fund projects like affordable housing development, or “baby bonds” (government-funded children’s savings accounts) for children born into lower-income families–a policy that, had it been implemented in 1979, would have shrunk the black-white wealth gap by 82% today.
“I don’t think that as a country, we can lead the world in billionaires and concentrated wealth, and have a broad, prosperous, and diverse middle class,” Hoxie says. “Those concepts don’t work together.”