The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide

Abstract

All families need wealth to be economically secure and create opportunities for the next generation. Wealth what we own minus what we owe—allows families to move forward by moving to better and safer neighborhoods, investing in businesses, saving for retirement, and supporting their children’s college aspirations. Having a financial cushion also provides a measure of security when a job loss or other crisis strikes. The Great Recession of 2007-2009 devastated the wealth of all families except for those with the most. The unprecedented wealth destruction during that period, accompanied by long-term high unemployment, underscores the critical importance wealth plays in weathering emergencies and helping families move along a path toward long-term financial security and opportunity.