Historically, the American society has suffered the indignities caused by racial stratification, but as posited in the Insight Center report, negative effects of racial biases persist as manifested through the apparently widening racial wealth gap. Inequality in wealth distribution among American racial groups is summarized in the Federal Reserve Board report on a survey of consumer finances in 2007 which established that “or every dollar owned by the median white family in the United States, the typical Latino family has twelve cents, and the typical African American family has a dime.” Sufficient evidence exists showing the negative impacts of unequal playing field on minority racial groups. African-Americans have long been victims of the concept of meritocracy, whose critics counter by advancing the discourse of black labor, white wealth. One can argue that historical inequalities in wealth distribution have impacted African-Americans equal access to basic services including proper education, health, and employment. Understanding the phenomenon of wealth disparity in African-Americans’ community in comparison to other racial groups requires examination of empirical evidence on their economic status.
The racial wealth gap between African-Americans and other racial groups in the US becomes significant when economic status is compared to that of whites. For instance, Insight Center (2009) posited that in 2007, the median African-American household net worth was $21,000 compared $170,000 for white households. The lopsided wealth ratios are corroborated in a Pew Research Center report by Kocchar, Fry, and Taylor (2011) showing African-Americans as the least wealthy. The racial wealth gap between African-Americans and whites became more pronounced between 2005 and 2009, eliciting sharp reactions from proponents of equitable wealth distribution. In the two years, the respective wealth for typical African-American households were $12,124 and $5,677 compared to $134,992 and $113,149 of the white households. It is important to recognize that both the Insight Center and Pew Research Center reports based wealth categorization on savings, home and business ownership, cars, retirement and collage accounts, stocks, bonds, and investments, and valued items.
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The Insight Center (2009) posited that understanding the persisting existence of racial wealth gaps calls for understanding of the wealth creation process. The first step lies in deconstruction of the concept of meritocracy that perceives success as a pure outcome of grit, gumption, and ingenuity. One can decipher that though laziness has some correlation to accumulation of wealth, the Insight Center refutes the connection between meritocracy and the racial wealth gap. The report gives more credit to the “invisible hand of government that has helped families of European descent to erect their asset structures during every period of U.S. history” (p. 5). Historically, the US federal and state governments through public policy, have created “wealth starter kits” including free land, public education, government sponsored funding for mortgages and farm loans, social safety nets, and businesses subsidies. Such policies were selective and favored the whites almost exclusively. The economic and social incentives coupled with discrimination of African-Americans, did not just give whites a head start, but also superiority over the blacks.
As a result, veterans from war were denied benefits that would have seen them own homes, a situation exacerbated by the government move to take away land from colored people, deny them education, and create barriers to home and business ownership. In addition, the government inaction towards atrocities committed by whites against blacks and other racial groups played a critical role in reinforcing unequal opportunities. Governments enacted and supported discriminatory policies that prevented African-Americans from enjoying benefits that were a privilege of the whites. One can argue that what today appear to be outcomes of racial wealth gap, indeed reflect the discriminatory rules and policies historically used to suppress the African-American community ascent to wealth ownership and prosperity.
One can argue based on the readings that the racial wealth gap that has become an obvious cleft in the American society is strongly founded on failure of the previous federal and state governments to adopt and implement the American dream of the founders of the country’s democracy. Instead, the governments chose to advance the long rejected concept of deciding the blacks’ future by the accident of their birth, by denying them opportunity for social and economic participation. This is not surprising as it is in human nature to protect themselves through socially constructed discourse that alienate competition. Social stratification is founded on this concept because it is only through assignment of social identity through race that exploitative policies can be justified.
The relevance of this activity to social imagination is based on the fact that the racial wealth gap is the leading contributor to social and economic inequalities. Questions are often raised as to why African-Americans continue to lag behind the whites in relation to wealth, yet evidence shows that they are equally capable and productive. Such social imagination can gain useful insights through examination of empirical evidence and underlying historical injustices contributing to the predicament of minority groups. In the same vein, affirmative action is needed to first aid understanding and recognition that the racial wealth gap is a reality. Only after acceptance of its existence can relevant stakeholders be convinced to revisit and examine causes of such a gap and take relevant measures and strategies for equitable economic growth.
The racial wealth gap among Americans is on its peak ever and African-Americans have been the worst recipients of historical injustices instituted by rules and policies by previous governments that discriminated colored people from social and economic opportunities. The impacts of racial wealth gaps on the US economy are immense because the government is forced to invest in social safety nets, but this can only be a short term solution. Understanding historical practices that aided the development and progression in the current predicament is necessary to develop strategies for addressing the situation.
References
Federal Reserve Board (2007). Survey of consumer finances: “Full public data set” (Washington: The Federal Reserve Board, 2009), Retrieved from: http://www.federalreserve.gov/pubs/oss/oss2/2007/scf2007data.html.
Insight - Center for Community Economic Development. (2009, Mar). Laying the foundation for national prosperity: The imperative of closing the racial wealth gap. Retrieved from: http://ww1.insightcced.org/uploads/CRWG/LayingTheFoundationForNationalProsperity-MeizhuLui0309.pdf.
Kochhar, R., Fry, R., & Taylor, P. (2011, Jul). Wealth gaps rise to record highs Between Whites, Blacks, Hispanics. Pew Research Center. Retrieved from: http://www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/.
