Most people would be able to guess that there is a huge gap between how much the average black person makes compared to how much the average white person makes, but the exact size of this wealth gap is quite alarming.
Ever since the Reagan Administration the wealth gap been growing rapidly and between 1984 and 2009, the size of the gap nearly tripled.
According to the study, the median of white households in the country were making more than seven times the median of black households – the white median came in a $265,000 while the black median only reached $28,500.
The co-author of the study was troubled by the results, but didn’t see anything about these numbers changing any time soon.
“The gap presents an opportunity denied for many African American households and assures racial economic inequality for the next generation,” Tatjana Meschede said.
Many people are inclined to only consider income when observing the wealth gap, but this thorough study also took into consideration several other factors which made it just that much more evident as to why the gap in wealth was so large.
In addition to the average white household more than doubling what a black household made according to the Census Bureau, the gap also reflected many more whites owning homes, receiving college degrees, and having an inheritance.
White households turned out to be almost 30 percent more likely to actually own a home while 29 percent of whites also had obtained a Bachelors degree or higher by the time they were 25. Only 18 percent of blacks in that same age group, on the other hand, managed to graduate college.
Then there was the look into inheritance. White were five times more likely to receive an inheritance between 1984 and 2009 according to the study.
In addition to being more likely to receive an inheritance in the first place, the inheritance that white families received always turned out to be substantially higher than the inheritance most black families received.
So what does this mean exactly?
Well, honestly, it’s hard to say exactly because there are many implications that can be made based on the study – perhaps the most obvious one being favorability in the job market.
Many researches are suggesting that the wealth gap in the on rise because there have been many more job opportunities for Caucasians than African Americans.
As for the college degrees, other studies are revealing that a large percent of African Americans aren’t given the opportunity to even attend all four years of college due to financial woes. Many black students who receive scholarships are usually only offered them by HBCUs (historically black colleges or universities) – many of which, unfortunately, aren’t held in high regards in the actual business world making a degree from those schools less desirable.
Of course, it’s also important to point out just a few errors in the study that could have the numbers a little more skewed than they actually are in reality.
Some of the research was done based on the “means” or averages of the data. Many statistics experts, however, will be quick to tell you that the mean isn’t always a great representation of the actual data.
The problem is that outliers have way too much impact on the final number. An extremely rich white person can boost up their mean by several hundred or thousand dollars and an extremely poor black person can decrease that demographic’s mean by just as much.
While the median is generally accepted as one of the best methods to use instead of using the mean, it also can have its fault when it comes to representing an entire population.
Either way, the study does prove that something needs to be done to close in the wealth gap by boosting the amount of blacks making a steady income and earning college diplomas.
Until then, the wealth gap won’t be disappearing any time soon.