According to a report released earlier this month by the Corporation for Economic Development and the Institute for Policy Studies, if current trends persist, it will take a whole 228 years to close the wealth gap between black and white families. For Latino families to accumulate the same amount of wealth as whites, it will take 84 years.
“We’re seeing wealth concentrating in fewer and fewer hands and those hands are overwhelmingly white,” said Josh Hoxie, leader of the project on opportunity and taxation at the Institute for Policy Studies.
The report shows that over the past three decades, the average household wealth of white families has increased 85% to $656,000. The average wealth of black families has only climbed 27% to $85,000 and Latinos 69% to $98,000.
Researchers found that sadly, as the number of minorities in the U.S. increases, so will the wealth gap. They predicted that by the year 2043, whites will actually be the minority in this country. Yet, the wealth gap will double, reaching $1 million.
According to Hoxie, there are several clear reasons for the growing divide. Historically, blacks and Latinos were targeted with subprime loans during the housing boom and are therefore less likely to own a home than their white counterparts. Today, buyers with credit scores between 500 and 600 are considered subprime and those with scores ranging from 300 to 500 are referred to as deep subprime.
Furthermore, blacks who do own homes tend to see their houses appreciate less in value than those owned by whites, especially if they live in primarily black communities that experience high foreclosure rates.
Finally, provisions in the tax code benefit wealthy Americans and these individuals are often white. Hoxie noted that there are currently only two African Americans on the Forbes 400 list.
The report was released after Black Lives Matter activists published a detailed proposal outlining specific economic demands. The proposal included restructuring the tax code so that there would no longer be income camps on payroll taxes that fund unemployment and Social Security.