February 12th 2024.
The recent report from the New York Federal Reserve Bank once again highlights the stark disparity in wealth between Black and white communities. According to the report, the wealth of white individuals has grown at a rate 30% faster than that of Black individuals and 9% faster than Latinx individuals between January 2019 and April 2023.
Even though the government provided financial assistance during this time and there was a 7.1% increase in earnings for Black workers, another study by the Federal Reserve revealed that a majority of white households had invested in the stock market, while only a small percentage of Black and Latinx households had done the same. This underscores the fact that an increase in income does not necessarily translate to an increase in wealth for Black individuals.
Janelle Jones, vice president of policy and advocacy at the Washington Center for Equitable Growth, shared her insights on the report with Fortune, stating, "The study really highlights the difference between making progress in terms of income and closing the wealth gap." She also pointed out the prevalence of Black individuals relying on pensions for financial security, as well as the unequal distribution of inheritance for Black Americans.
Jones further explained that while there has been progress in terms of employment rates, wages, and Black business ownership, there is still a significant gap in wealth between Black and white communities. This is evident from the fact that the actual value of Black and Latinx households in 2022 dropped below pre-pandemic levels and has yet to recover. In light of this, Treasury Deputy Secretary Wally Adeyemo believes that the government may need to implement "policy prescriptions" to address this issue.
The McKinsey report, which estimates that it could take over three centuries for Black Americans to achieve racial parity, further emphasizes the urgency of addressing the wealth gap. As Black Enterprise reported, the pandemic has only exacerbated this issue, with white wealth growing at a much faster rate than Black wealth.
The disparities highlighted in the Fed report serve as a reminder that there is still a long way to go in terms of achieving true equality and closing the wealth gap between Black and white communities. It is crucial for policymakers and individuals alike to take action and work towards creating a more equitable society.
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