Make no mistake about it. The rich in America is getting super richer. And correspondingly the poor are getting super poorer. Over the past 20 years the net worth of the top two percentile of American families has almost doubled from $1,071,000 in 1984 to $2,100,500 in 2005. This is the conclusion of a new study about wealth disparity in the United States by the University of Michigan.
The study also shows that the poorest quarter of American families lost ground over that same period with their 2005 net worth below their 1984 net worth measured in constant 2005 dollars. In fact the poorest 10 percent of families managed a negative net worth meaning that they incurred more liabilities than assets. And the poorest 5 percent of American households, the study says, had a negative net worth of a little more than $1,000 in 1984 as compared to nearly $9,000 in 2005.
And while the study found that between 2003 and 2005 the average net worth of American families increased overall by 12 percent the average net worth of African American households fell slightly from $59,900 to $59,500. Perhaps one key indicator that speaks to the issue of wealth disparity is the participation of Americans in the stock market. Slightly over six percent of Black families owned stocks in 2003, compared with 5.3 percent in 2005—an 18 percent decline. Among white families, the percent owning stocks fell from 32 percent to 28 percent during the same period—a 12 percent drop.
The news is even bleaker when one reads the results in a report written by the Pew Hispanic Center entitled “The Wealth Of Hispanic Households 1996 – 2002.” The report says that the median net worth of an African American household is about $6,000 while white households wield 14 times as much wealth - more than $88,000. The report also said that one-third of all Black households have no assets or a negative net worth.
Indeed, today’s wealth disparity and the rise of the super rich and noveau-rich, is not accidental. While many scoff at the idea that the poor socio-economic plight of Black Americans is a by-product of slavery and Jim Crowism there are many sound reasons and explanations to support this arguement. As Roderick Harrison, a researcher at the Joint Center for Political and Economic Studies said: "Wealth is a measure of cumulative advantage or disadvantage. The fact that Black and Hispanic wealth is a fraction of white wealth also reflects a history of discrimination."
And yes, I can hear the chorus of dissent and those who play ostrich and bury their heads in the sand pretending not to hear and indictment of white, privileged America. I can also hear the counter arguments about individual growth and development, ambition and embracing of opportunities that Blacks lack. But there is one simple answer to these lame counter arguments: Black achievements, limited as they are, have come by way of protracted struggles to change white attitudes, to be accepted in a society that still think of them as outcasts; by an ongoing struggle gain access to quality education and by the fact that today in 2007 Black people are still fighting the residual legacy of Jim Crowism, racism and bigotry in ALL FACETS OF DAILY LIFE – from the work place to the Church.
For those who play the ostrich and pretend that this wealth disparity is a new social phenomenon the reason is simple: white America does not want to admit the slave-foundation of its wealth preferring to believe that wealth and privilege has been earned. Harvard social demographer Dr. Michael A. Dawson puts it this way: “The racial structures in the United States continue to this day to produce wealth disparities.” Today, these structures are working feverishly to dislodge Blacks from their precarious perches in the middle class. Yet whites remain implacably opposed to engaging in even a discussion of reparations, while continuing to profit from “the inherited gift that keeps on giving.”
For whites to justify their super riches and the decline of Black fortunes they had to come up with a rationale. Suddenly, the crime of a nation that enslaved a race of people for over 400 years was not to blame but some genetic, cultural impediment that somehow holds Blacks from succeeding. They say that Blacks could improve their status if they saved more money and stopped so-called “impulse buying.” Such hogwash has even been peddled by Black leaders from time to time.
To begin with Black savings rates are on par with whites or, some argue, even higher. So that is not the problem. The issue is that whites earn more than Blacks in terms of income that is gobbled up by high rents, no health insurance, high unemployment rates and other factors that eat away at Black income. The upshot is that for Blacks to achieve wealth parity with whites they would have to go without “food, shelter, clothing and other expenses en masse for well over a decade to save enough to catch up,” according to Dr. William “Sandy” Darity, Professor of Public Policy Studies, African and African American Studies and Economics at Duke University.
“So I would say, there is no way that you can catch up by systemic and careful savings. If African Americans saved all of their income – that is, if we didn’t eat, pay any bills, but saved every cent of income – we could not close the wealth gap,” said the professor, who also teaches economics at the University of North Carolina, Chapel Hill.
Of course, there are many theories as to why such a glaring, growing wealth disparity in the United States is today decimating the Middle Class and has all but obliterated the poor and working poor. Blaming Blacks for arriving in a world of poverty, ghettoization, marginalization and prejudice while celebrating those who are born into privilege that was created by the exploitation of Black people over a period of centuries cannot be right. Over 400 years of appropriated Black labor by white people is a legitimate cause for reparations in much the same way that the German government has compensated Jews in the aftermath of World War II and the Nazi atrocities.
Today’s slave legacy is a chilling indictment of a system that is still separate and unequal. Consider the following: Black households earn less than 60 percent of median white income. At the pace of catch-up since 1968, according to a report issued earlier this year by United for a Fair Economy, “it would take 581 years” to achieve income parity with whites. But wages are not wealth. For most Americans, home ownership is the major asset. Seventy-five percent of whites own their homes, while more than half of Blacks rent. At the rate of “progress” recorded since 1970, UFE estimates “it would take 1,664 years to close the ownership gap – 55 generations.”
While home ownership is an important asset for both Blacks and whites, land ownership is also key to wealth accumulation. Black people have not gotten the mule and will never get the “40 acres” promised them. History shows that through struggle, blood sweat and tears Blacks managed to accumulate approximately 15 million acres of land in the South at the end of the Civil War. But Jim Crow’s unjust laws, white terrorism against Blacks, wholesale destruction of Black deeds, and the conniving of white officials systematically stole Black lands. By private and public criminality Black real estate was wiped out – something that directly led to wealth disparity in 2007.
Indeed, studies have shown that had the post-Civil War federal government kept its promise to Blacks or passed the 1867 reparations bill in Congress for African slaves in the United States things would have been better today for the Black population and community. Had each former slave received his or her 40 acres of land Blacks would have had a stronger economic foundation and would not have been pushed to the bottom of the economic ladder when waves of white European immigrants, better educated and skilled than Blacks, came to work in a rapidly growing industrialized United States during the last decades of the 1800s.
And while many speak in the abstract when it comes to reparations, slavery and wealth disparity one can quantify the dollar value of Black slave labor to white America and what would be the value to day of the “40 acres and a mule” plan. Today, say economists, an 1865 plot of 40 acres would be valued at approximately $1.6 million. Professor Joe Feagin of the University of Florida at Gainsville said in a seminal report: