By Nikole Hannah-Jones
June 24, 2020
In 2018, Duke University’s Samuel DuBois Cook Center on Social Equity and the Insight Center for Community Economic Development published a report called “What We Get Wrong About Closing the Racial Wealth Gap” that examined the common misperceptions about the causes of the racial wealth gap and presented data and social-science research that refutes them all.
The study shows that the racial wealth gap is not about poverty. Poor white families earning less than $27,000 a year hold nearly the same amount of wealth as black families earning between $48,000 and $76,000 annually. It’s not because of black spending habits. Black Americans have lower incomes over all but save at a slightly higher rate than white Americans with similar incomes. It’s not that black people need to value education more. Black parents, when controlling for household type and socioeconomic status, actually offer more financial support for their children’s higher education than white parents do, according to the study. And some studies have shown that black youths, when compared with white youths whose parents have similar incomes and education levels, are actually more likely to go to college and earn additional credentials.
But probably most astounding to many Americans is that college simply does not pay off for black Americans the way it does for other groups. Black college graduates are about as likely to be unemployed as white Americans with a high school diploma, and black Americans with a college education hold less wealth than white Americans who have not even completed high school. Further, because black families hold almost no wealth to begin with, black students are the most likely to borrow money to pay for college and then to borrow more. That debt, in turn, means that black students cannot start saving immediately upon graduation like their less-debt-burdened peers.
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