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In this report, we look at the racial wealth divide at the median over the next four and eight years, as well as to 2043, when the country’s population is predicted to become majority non-white. We also look to wealth rather than income to reconsider what it means to be middle class. In finding an ever-accelerating gap, we consider what it means for the American middle class and we explore what policy interventions could reverse the trends we see today. We find that without a serious change in course, the country is heading towards a racial and economic apartheid state.
According to our new report released today, The Road to Zero Wealth, families of color are on track to see their median wealth hit zero within our lifetime, making the prospects of transferring wealth to the next generation difficult or impossible. The research featured in the new report looks at median household wealth and excludes durable goods like cars, appliances and electronics. When we remove these from our calculations, a typical Black family has just $1,700 in owned wealth—1.3% of the wealth owned by a typical White family ($132,000). And, the lack of wealth facing Black families isn’t just isolated to them; Latino families fare just barely better, with their median wealth standing at only $2,000.
In fact, if the median household wealth trends of the past 30 years continue (during which time Black and Latino families have seen their wealth decrease by a full 75% and 50%, respectively), by 2020, Black and Latino families are projected to lose an additional 18% and 12% of wealth they own today, respectively. Then, by 2024, Black and Latino households at the median are set to lose an additional 10% of their wealth. For those keeping count, this means a 20-30% decrease for the already low level of wealth held by each community today. In stark contrast, during this same timeframe, White households are projected to see their median wealth rise by five percent over where things stand today.
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