White Americans’ Hold on Wealth Is Old, Deep, and Nearly Unshakeable
Crucial to understanding how to close that gap—such that it can actually be closed—is grappling with how it was created in the first place. The McKinsey report identifies four components that perpetuate this gap—family wealth, family income, family savings, and community context (a community’s collective public and private assets). Black families have not been able to build wealth due to “unmet needs and obstacles” across these four dimensions.
“First, you legally segregate, and then you let the market do it for you”
So just to run back the score: Southern slaveholding families were able to recuperate post-Civil War wealth losses within one generation, and by 1940 even those families’ grandchildren were doing better than their Southern peers. Also by 1940, low-income and working-class white families are ushered into wealth via federally backed housing and farming loans and derivative lines of credit. In that same time, freed African Americans are mostly robbed of what little bit of land they were able to possess after the Civil War, and passed over for the mortgage loans and credit lines awarded to white families.
In order to create, lose, and then re-create wealth—and then create new forms of wealth for other low-income white families—white families leveraged social networks and credit. This is the community context that the McKinsey report identifies as one of the crucial components needed for families to build wealth. Most African Americans were never able to develop this, and in the few areas where they did accumulate community-level wealth, it was taken from them. And they were unable to recover it due to racist residential and spatial settings.
https://www.citylab.com/equity/2019/09/racial-wealth-gap-history-slavery-black-white-family-income/597100/















