Black-white wealth gap in America is getting worse

One of the starkest benchmarks of inequality is on track to widen

The gap between the wealth of Black and white Americans, one of the starkest benchmarks of inequality in the U.S., is on track to widen substantially after the pandemic exacerbated wealth concentration, according to new data that details 160 years of racial wealth disparities for the first time.

Black Americans in 2019 had one-sixth the wealth of white Americans on a per capita basis, according to analysis in a paper this month from economists Ellora Derenoncourt, Chi Hyun Kim, Moritz Kuhn and Moritz Schularick. Though that’s a drastic improvement from the 60-to-one ratio in 1860 on the eve of the Civil War, it’s still less than what they had in the 1980s.

“The recent role of capital gains in the widening of the racial wealth gap paints a sobering picture for the future of racial wealth convergence,” the authors wrote in the paper, circulated by the National Bureau of Economic Research.

“In the absence of policy interventions or other forces leading to improvements in the relative wealth-accumulating conditions of Black Americans, wealth convergence is not only a distant scenario, but an impossible one,” they said.

The pandemic saw wealth concentration reach its highest level since World War II, Derenoncourt, from Princeton University; and Kim, Kuhn and Schularick, of the University of Bonn in Germany, said.

Should current wealth-accumulating conditions continue for coming generations, they estimate the level of White-to-Black wealth could reach 8.4 by 2200 from around 5.6 in 2019. In that year, Black wealth stood at $60,125.58 compared to $338,092.80 for nonBlack households.

The failure of the Black and white wealth gap to narrow since the 1980s can in large part be attributed to the types of assets that make up each group’s holdings. Black households hold nearly two-thirds of their wealth in housing and very little of it in stocks, while white Americans own shares of publicly traded companies in much greater numbers. In the past 70 years, stocks have appreciated five times as much as housing prices.