First published March 2018
In August 2016, Prosperity Now, in collaboration with the Institute for Policy Studies, published The Ever-Growing Gap: Without Change, African American and Latino Families Won’t Match White Wealth for Centuries. In the report, we examined data from the Federal Reserve Board’s Survey of Consumer Finances over a 30-year period (1983-2013) to understand the scope of the racial wealth divide facing Black and Latino households and to project the future of racial wealth inequality. In exploring wealth inequality facing these communities, we looked at average rather than median economic data.
While examining average wealth allowed us to uncover several startling findings, it ultimately created a distorted reality of the economic circumstances facing Black and Latino families because the data required us to include the outliers—the wealthiest households—in our analysis. For example, we found that although racial wealth inequality had risen between 1983 and 2013, so too did the wealth of Black and Latino households. We also found that these families could someday match the wealth held by the average White family in 2013—though doing so would take one or two centuries or more.