“Unequal” is a series highlighting the work of Harvard faculty, staff, students, alumni, and researchers on issues of race and inequality across the U.S. This part looks at the racial wealth gap in America.
The wealth gap between Black and white Americans has been persistent and extreme. It represents, scholars say, the accumulated effects of four centuries of institutional and systemic racism and bears major responsibility for disparities in income, health, education, and opportunity that continue to this day.
Consider that right now the net wealth of a typical Black family in America is around one-tenth that of a white family. A 2018 analysis of U.S. incomes and wealth written by economists Moritz Kuhn, Moritz Schularick, and Ulrike I. Steins and published by the Federal Reserve Bank of Minneapolis concluded, “The historical data also reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years.”
It’s no surprise. After the end of slavery and the failed Reconstruction, Jim Crow laws, which existed till the late 1960s, virtually ensured that Black Americans in the South would not be able to accumulate or to pass on wealth. And through the Great Migration and after, African Americans faced employment, housing, and educational discrimination across the country. After World War II many white veterans were able to take advantage of programs like the GI Bill to buy homes — the largest asset held by most American families — with low-interest loans, but lenders often unfairly turned down Black applicants, shutting those vets out of the benefit. (As of the end of 2020 the homeownership rate for Black families stood at about 44 percent, compared with 75 percent for white families, according to the Census Bureau.) Redlining — typically the systemic denial of loans or insurance in predominantly minority areas — held down property values and hampered African American families’ ability to live where they chose.
The 2020 pandemic and its economic fallout had a disproportionate toll on people of color, and many expect that it will widen the gap in various areas, including wealth. At Harvard, experts from different disciplines are studying the problem to find its roots and possible ways to level the playing field to ensure all have an equal chance to achieve the American dream. Here we will take a look at a few, several of which focus on education as a long-term path out.
A history older than the nation
Khalil Muhammad, Ford Foundation Professor of History, Race, and Public Policy at the Harvard Kennedy School, traces the roots of disparity to the Colonial period, when the European settlement and conquest of North America took place.
The process began in the second half of the 17th century, said Muhammad, when European settlers stripped Natives of their lands and used Africans as enslaved labor, preventing them from fully participating in the economy and reaping the fruits of their work.