Race And Ethnic Inequality Essay

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Drawing on data from the nationally representative Survey of Income and Program Participation (SIPP) collected in 2011, the analysis tests how current racial disparities in wealth would be projected to change if key contributing factors to the racial wealth gap were equalized.Unless key policies are restructured, the racial wealth gap—and wealth inequality in general—will continue to grow.In this paper, we assess the major factors contributing to the racial wealth gap, considering how public policies around housing, education, and labor markets impact the distribution of wealth by race and ethnicity.Finally, the Audit provides insight into the impact of policies on the racial wealth gap within a discrete time period, such as 1 year or 5 years ahead.The Racial Wealth Audit is designed to fill the void in our understanding of the racial wealth gap and enhance our ability to reduce the gap through policy.For more on the Racial Wealth Audit see IASP’s 2014 paper, In this report, we define the racial wealth gap as the absolute difference in wealth holdings between the median household among populations grouped by race or ethnicity. Using the SIPP, we estimate that the median white household had 1,146 in wealth holdings in 2011, compared to ,113 for the median Black household and ,348 for the median Latino household.In relative terms, Black households hold only 6 percent of the wealth owned by white households, which amounts to a total wealth gap of 4,033, and Latino households hold only 8 percent of the wealth owned by white households, a wealth gap of 2,798 (see Figure 1).For more information on the primary data source–the Survey of Income and Program Participation (SIPP)—and the analysis techniques used in this study, please see the Appendix.In this report, we briefly discuss the historic and policy roots of the wealth gap in each area and quantify the extent to which each policy area contributes to the current gap.Over the past four decades, wealth inequality has skyrocketed, with nearly half of all wealth accumulation since 1986 going to the top 0.1 percent of households.Today the portion of wealth shared by the bottom 90 percent of Americans is shrinking, while the top 1 percent controls 42 percent of the nation’s wealth.1 At the same time, an increasing share of the American population is made up of people of color, and wealth is starkly divided along racial lines: the typical Black household now possesses just 6 percent of the wealth owned by the typical white household and the typical Latino household owns only 8 percent of the wealth held by the typical white household.2 These wealth disparities are rooted in historic injustices and carried forward by practices and policies that fail to reverse inequitable trends.