Racial Wealth Gap: Where Past Injustice Compounds Into Present Inequality

It is really difficult to explain this more succintly than the title of this piq. But in conversation with Vox's Ezra Klein, and in the third episode of Vox's new Netflix co-production, Explained, author Mehrsa Baradaran delves deep into the matter. Make sure you listen to both pieces. 

Most talk on racism and black exclusion in the United States focuses – rightly – on cultural norms, lack of access to equal opportunity and positions of power, and the recent social movements, like Black Lives Matter, calling attention to the matter. But it is crucial not to miss the fact that black people have been systematically excluded from the financial system. As such, they have been locked out of the engines that create wealth and opportunity. 

The median wealth among white households in America is $171,000, while it only reaches $17,600 among black households. So, when it comes to wealth, the average black family only has around 10 per cent of what the average white family does. 

Paying for the American Dream

In the podcast, Baradaran does a great job of explaining how African Americans have been historically left out of the financial engines of growth, and how the rhetoric of equal treatment under the law has been used to undermine efforts to promote economic equality. 

As Baradaran explains in her book, How the Other Half Banks, a considerable portion of the African American population remains unbanked and underbanked today. This forces them to wander through a cadre of payday lenders and other emergency services to cover some of their basic needs. As she explains in her book and in the conversation, this two-tier banking system has become even more unequal since the onset of the global financial crisis. 

To learn more about this issue, Vox gathered a few books for further reading. I know I'll be checking a few of them out.