White-black wealth gap quadrupled

May 20, 2010 at 2:04 AM
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WALTHAM, Mass., May 20 (UPI) -- The wealth gap between white and African-American families more than quadrupled from 1984 to 2007, U.S. researchers found.

Study co-author Tatjana Meschede of the Institute on Assets and Social Policy at Brandeis University in Waltham, Mass., said during the study period, the racial wealth gap between whites and black increased by $75,000 from $20,000 to $95,000.

Financial assets, excluding home equity, among white families grew from a median value of $22,000 to $100,000, while African-Americans had a median wealth of $5,000 in 2007.

"Even when African-Americans do everything right -- get an education and work hard at well-paying jobs -- they cannot achieve the wealth of their white peers in the workforce, and that translates into very different life chances," study co-author Thomas Shapiro, director of the Institute on Assets and Social Policy, said in a statement.

The wealth gap could pay for tuition at a four-year public university for two children, purchase or make a large down payment on a house, or provide a nest egg for retirement, illness, or job layoff.

The data indicate black consumers pay more than whites for accessing credit, and credit is often used to help cover the loss of a job or medical emergency, while at the same time, deregulation of the lending market resulted in high-cost credit, including securitized subprime and predatory loans, payday lending and check-cashing stores.

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