By Mark F. Gray, Staff Writer,
Contrary to the reports that would suggest the American economy is on an upswing, the wealth divide continues to separate families of color from their White counterparts. According to the findings of a new report commissioned by the Institute for Policy Studies (IPS), the gap has widened over the last 30 years which has made for a polarizing relationship between the groups.
“The Dreams Deferred Report” by the Institute for Policy Studies explains the expansion of the wealth gap and offers viable solutions to ensure the gap is closed. (Courtesy Photo)
which audited the progress the United States has made regarding economic equality since Dr. Martin Luther King’s launched his Poor People Campaign in 1968, paints an eerie picture of inequity that remains an uphill climb minorities are still facing to level the playing field. This report determined that while the poverty rate did decline by almost half during the 1960s, it was almost exactly the same as it was when King was assassinated when the study was released to coincide with what would’ve been his 90th birthday in January.
There have been long term trends which continue to allow the wealthiest 10 percent of Americans to control the economy of the masses- which has been detrimental. That control is leading to minorities having to live paycheck to paycheck, in most cases, with the inability to financially absorb life’s unexpected circumstances that arise.
“Between 1983 and 2016, the median Black family saw their wealth drop by more than half after adjusting for inflation, compared to a 33 percent increase for the median White household,” the report concluded. “The difference in wealth ownership by race is one of the ways that past policies have manifested into today’s disparities, where several centuries of racial advantage and discrimination in asset-building are reflected in concrete ‘net-worth’ numbers.”
Based on those findings, the IPS developed a plan of action to bridge the wealth gap. It is a 10-step plan that begins with financial investment at infancy and would require the wealthiest to pay its equal share of taxes.
“Baby Bonds” is a term coined by one of the report’s authors Derrick Hamilton. Hamilton, the executive director of the Kirwan Institute for the Study of Race and Ethnicity at The Ohio State University, concludes baby bonds would be federally managed accounts set up at birth for children and endowed by the federal government with assets that will grow over time. After the bonds mature by adulthood, the recipient would be able to use them to start a business or pay for a college education which could close the gap by 82 percent.
Guaranteed employment with a “significantly” higher minimum wage is another program that would benefit the minority workforce. Workers of color are twice as likely as their White counterparts to be qualified as “working poor.” “Bridging the racial wealth divide requires more than just ‘more jobs,’” the report concludes. “It demands good jobs that pay a living wage for everyone who is able to work.”
Universal healthcare and postal banking would offset two causes of bankruptcy in the United States. Long term illness is an enormous financial burden by those without a competitive wage. Unregulated banking takes advantage of the 10 million low-income Americans who don’t have accounts and the study opines that the U.S. Postal Service “is uniquely positioned to provide essential financial services to these families including short term, low-level loans to address income volatility.”
However, the biggest inhibitor to ending the economic imbalance is the wealthiest paying their share of taxes. Shifting federal tax subsidies, estimated at over $600 billion per year, currently ensure the wealthy are able to become wealthier.
If expenditures toward wealth-building programs for low-wealth people are enacted financially, equality could be achieved almost immediately.