Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Protesters hold signs demanding economic justice.

"We need an economy rewired to work for everyone, not just the very wealthy," the authors write. (Photo: Becker1999/flickr/cc)

An MLK Day Reflection: The Racial Wealth Gap Is Killing the Middle Class

Ninety years out from Dr. King's birth, the typical white family had 41 times more wealth than the typical Black family

Dr. Martin Luther King Jr. would have been 90 on January 15, so it's time for a progress report.

Fifty years after co-founding the Poor People’s Campaign, a multiracial campaign for economic justice, the state of King's dream of racial equity and freedom from poverty is far from attained.

On the positive side, the U.S. Black unemployment rate reached historic lows in 2018. There's also been a modest recent uptick in median household wealth for Black, Latino, and white families alike.  We could easily conclude that the racial economic divide is closing.

But we took a closer look in Dreams Deferred, a new report for the Institute for Policy Studies. And it revealed we have a long way to go.

While income statistics provide a valuable window into the annual fortunes of a family, an analysis of wealth tells us a more in-depth story about financial security and well-being.

Over the past three decades, a polarizing racial wealth divide has grown between White households and households of color.

Between 1983 and 2016, we found, median white household wealth grew from $105,300 to $140,500 — a 33 percent increase after adjusting for inflation. On the other hand, the median Black family saw their wealth drop by more than half, to just $3,600. 

Ninety years out from Dr. King's birth, in other words, the typical white family had 41 times more wealth than the typical Black family. (Latinos, out-owned by a factor of 22, fared only a little better.)

Even worse, if that trajectory continues, the gap will only get wider. White wealth is projected to grow, but the median Black family is on track to reach zero wealth over the next several decades.

Unsurprisingly, this also means that families of color are overrepresented on the poorest rungs of society. Some 21 percent of all U.S. households now have zero or negative wealth. That's concerning on its own, but that figure rises to 33 percent of Latino families and 37 percent of Black families.

As the U.S. becomes a majority black and brown society, it's a problem when such a huge percentage of the economy has stagnating wealth — it amounts to the hollowing out of America's entire middle class, which hurts the whole economy.

Exclusion from asset-building undermines economic participation — what economists call “aggregate demand” — which results in diminished consumer spending, lower savings rates, and reduced homeownership and household formation.

Low levels of Black and Latino wealth, in fact, contributed to a 3 percent decline in overall U.S. household wealth over the decades we studied.

Four decades of stagnant wages have reinforced the historical patterns of racial division, while inequality in the broader society has undermined policies that might have helped close the gap.

Lawmakers who want to reverse these trends need to address the larger inequalities affecting all workers with initiatives to invest in good jobs, raise the minimum wage, and ensure the richest 1 percent pay their fair share of taxes.  We need an economy rewired to work for everyone, not just the very wealthy.

But policymakers must also focus on efforts that help families who have historically been excluded from middle-class wealth building programs. This could include the creation of “baby bond” programs that seed asset-building accounts for all American newborns. Expansion of supports for first-time homebuyers and first-generation college students would also make a significant difference.

“There is nothing new about poverty," Dr. King said in his Nobel Peace Prize Address in 1964. "What is new, however, is that we have the resources to get rid of it.”  

Today those resources are concentrated in fewer hands than at almost any point in Dr. King’s short life. To achieve the equal opportunity King lived and died for, we have to break these resources free so they can be invested in a nation that can make King’s Dream a reality. 

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Dedrick Asante-Muhammad

Dedrick Asante-Muhammad

Dedrick Asante-Muhammed has been a long-time thought leader focused on racial economic inequality. He started his work as the first Racial Wealth Divide Coordinator at United For A Fair Economy. He then went on to work with Chuck Collins at Institute for Policy Studies Inequality and Common Good Program. Dedrick then went on to become the Senior Director of the Economic Department for the NAACP and currently is the Chief of Race, Wealth and Community for the National Community Reinvestment Coalition.

Chuck Collins

Chuck Collins

Chuck Collins is a senior scholar at the Institute for Policy Studies where he co-edits, and is author of the new book, "Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good."  He is co-founder of Wealth for the Common Good, recently merged with the Patriotic Millionaires. He is co-author of "99 to 1: The Moral Measure of the Economy" and, with Bill Gates Sr., of "Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes."

... We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

'Bombshell': Israeli Spyware Used to Hack iPhones of US State Department Officials

Calling the Israel-based spyware maker NSO Group an "in-plain-sight national security threat," one expert warned that "a multi-agency investigation is immediately needed."

Jessica Corbett ·

US Progressive Caucus Hails Honduran Election as Chance for 'New Chapter' in Relations

"We encourage the Biden administration to use this opportunity to make a clean break with previous presidential administrations, which worked to ensure that the 2009 coup d'état succeeded."

Brett Wilkins ·

'The Facts of This Case Are So Egregious': Parents of Michigan School Shooter Charged in Killings

"There were a lot of things that could have been so simple to prevent," the Oakland County prosecutor said of the mother and father now being sought by law enforcement.

Kenny Stancil ·

Health Minister Says 'Highly Transmissible' Omicron Hitting Young Children Hard in South Africa

In South Africa's worst-affected province, children under the age of five now make up the second-largest group being admitted to hospitals.

Julia Conley ·

Groups Tell UN Food Agency to Ditch 'Toxic Alliance' With Pesticide Association

"This partnership with CropLife is in direct conflict with FAO's mandate as a U.N. institution to fulfill human rights to health, adequate food, clean water and environment, and safe working conditions."

Kenny Stancil ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.

Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo