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The State of the Dream 2004: Enduring Disparities in Black and White

Wealth, continued

Average Household Net Worth

• The Black-white gap in average household wealth is increasing.

• White households had an average net worth of $468,200 in 2001, more than six times the $75,700 of Black households. This includes home equity. In 1989, average white wealth was five-and-a-half times Black wealth.

[image:] Graph with the following text:
Average Household Net Worth, 1989 and 2001
(Adjusted for Inflation in 2001 dollars)
1989 White $317,600
1989 Black $57,000
2001 White $468,200
2001 Black $75,700
The Black-White Gap in Average Household Net Worth is increasing.

Source: Arthur B. Kennickell, "A Rolling Tide: Changes in the Distribution of Wealth in the U.S., 1989-2001," Levy Economics Institute, Nov. 2003. See Appendix for Years to Parity calculation. Note: 1989 is the first year for available methodologically consistent data.

Wealth is defined as net worth, or assets minus debts, "what you own minus what you owe." For most American families, and especially Black families, equity in a home is the most significant kind of wealth. Generations of slavery, segregation, disinvestment and discrimination have left African Americans well behind in asset building. Since the mid-1970s, the top 1% of households, overwhelmingly white, have doubled their share of the nation's wealth. The fact that typical Black households had just $19,000 in wealth in 2001, after the longest economic boom in the history of the richest nation on earth, is a reflection of continued deep inequality.

Assets are key to household stability and key to ending racial disparities. For example, sociologist Dalton Conley shows in his book Being Black, Living in the Red that between Black and white at any given level of wealth there are no differences in educational achievements.

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United for a Fair Economy • Racial Wealth Divide Project 9