By 2053, the median household wealth of Black and Latino families in America will be 0, and no one seems to be doing anything about it!
In a revelation that can ring in a massive financial catastrophe for America, a recently published report reveals that the average wealth of middle-class minority communities in America will fall to an all-time low of $0 by 2053. The communities in question are blacks and Latinos; the former pegged to lose their wealth earlier than the other groups.
The study was conducted by the Institute for Policy Studies in collaboration with Prosperity Now, a non-profit organization headquartered in Washington and if the findings turn out true, then middle-class black and Latino households are estimated to lose 18% and 12% of their current wealth respectively.
That's not all, the study makes an interesting observation about the wealth of the American families. According to the findings, a white American household will see an increase of 3% in their overall wealth, compared to other racial backgrounds whose wealth collectively plummets. As the paper states, “At that point – just three years from now – white households are projected to own 86 times more wealth than black households, and 68 times more wealth than Latino households.”
The study points to a widening economic gulf between the different communities living on American soil. According to the report, there are two prominent reasons that have led to the financial divide between Americans viz-a-viz ethnic backgrounds. One: the 'upside, down' tax system that refers to low taxes, levied on 'business wealth' (such as capital gains) compared to the high tax rate levied on wages and salaries of individuals. The second being the sky rocketing increase in the number of people incarcerated in America.
The first reason throws light on the fact that the middle-class American families are paying more taxes than wealthy corporations and business entities; leading to the rich getting richer and the poor remaining poor. The second reason elucidates on the fact that America has the highest incarceration rate in the world; an astounding 716 prisoners per 100,000 citizens are locked up.
Prior to this, in another report published, the increasing divide in economic wealth is also attributed to other social and economic causes such as lack of home ownership (73% of whites own a home, compared to 47% of Latinos and 45% of blacks), lack of education (in 2011, 34% of whites completed a four-year college degree, whereas just 20% of blacks and 13% of Latinos did) and unequal wages (a typical white family earns $50,400, while the typical black family earns $32,038, and the typical Latino family, $36,840).
With the US set to become “majority minority” by 2044, researchers say this monetary fissure between the different households is a herald for inevitable economic crises that could wreck the American society's fabric. As the authors of the paper Asante-Muhammad and his co-authors write, "If the racial wealth divide continues to accelerate, the economic conditions of black and Latino households will have an increasingly adverse impact on the economy writ large, because the majority of US households will no longer have enough wealth to stake their claim in the middle class.”
As our great nation inches closer towards becoming a more ethnically diverse country, this impending financial peril threatens to push a majority of our country out onto the streets. The challenge here lies in creating more inclusive public policies and rewriting the tax collection along with wage distribution rules that can help in controlling the expanding cracks appearing in our society.
The solution, as Asante points out lies in investing in an 'all-inclusive' 21st-century American middle class. He elaborates, "We need to make sure, for the first time, that we are investing in a middle class that includes communities of color. This generally hasn’t been done before by our government."
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