An economy that’s rigged to benefit the richest 1% has left most of America behind. While wages for workers have remained flat for decades, expenses for healthcare, housing, and most basic needs have risen. Alongside record concentrations of income and wealth at the top, America’s racial wealth divide has persisted – or worsened.

As people of color make up a larger share of the diversifying US population, that persistent racial wealth divide is bringing down America’s median wealth. But while wealth at the middle falters, it’s soaring at the top.

In other words, the 1% are profiting off ongoing racial economic inequality.



All this is happening against a backdrop of seemingly good economic news. Black and Latino unemployment rates reached historic lows in 2018, and median income has slowly inched up for all households in the last few years.

But measures of wealth – what you own minus what you owe – tell a very different story. Those were our findings in Dreams Deferred, a new study on the racial wealth divide for the Institute for Policy Studies.

Since the early 1980s, median wealth among Black and Latino families has been stuck at less than $10,000

Since the early 1980s, median wealth among black and Latino families has been stuck at less than $10,000. The median black family today owns $3,600 – just 2% of the $147,000 of wealth the median white family owns. The median Latino family has assets worth $6,600 – just 4% of the median white family.

In other words, the median white family has 41 times more wealth than the median black family and 22 times more wealth than the median Latino family.

“Median wealth” refers to the household at the exact middle of wealth distribution – with half of households above and half below. That’s different from “average wealth”, which skews the numbers by including the wealth of the richest 1%. (Average white wealth, for example, was $930,000 in 2016. But the ordinary white person isn’t close to being a millionaire.)

Changes in median wealth give us a multi-decade understanding of economic security and wellbeing. Since 1983, median wealth for all US households declined by 3%, adjusting for inflation. Over this same period, the median Black family saw their wealth drop by more than half.

Meanwhile, the number of households with $10m or more soared by 856%.

If the trajectory of the past three decades continues, by 2050 the median white family will have $174,000 of wealth, while Latino median wealth will be just $8,600 – and black median wealth will head downward to $600. In fact, the median black family is on track to reach zero wealth by 2082.

While the middle stagnates and the very top soars away, there’s also surging growth at the bottom end of the spectrum.



A growing number of households are “underwater” when it comes to wealth. The proportion of all US households – of any race – with zero or “negative” wealth (meaning their debts exceed the value of their assets) has grown from one in six in 1983 to one in five households today.

Thirty-seven percent of black families and 33% of Latino families have zero or negative wealth, compared to just 15.5% of white families

Families of color are much likelier to be in this precarious financial situation. 37% of black families and 33% of Latino families have zero or negative wealth, compared with just 15.5% of white families.

These racial wealth divisions are damaging to the economy as a whole. Low levels of black and Latino wealth, combined with their growing proportion of the population, are a significant contributor to the overall decline in American median household wealth.

Meanwhile, efforts to close the racial economic divide have been thwarted by the larger economic inequalities surging through the economy. Billionaire-bankrolled outfits like the Koch network, for example, have invested heavily in politicians that have made the tax code more unequal than ever.

Public policies aimed at reducing both overall inequality and the racial wealth divide in particular will be critical to creating a more equitable economic system. Such policies could include the expansion of first-time homeownership programs and the creation of a “baby bond” program, to seed an asset account for each newborn.

But we also must address the overall challenges of inequality with policies to raise the minimum wage and expand healthcare, while taxing the 1% to fund education and infrastructure that create an economy that works for everyone, not just the super-rich.