What is the Wealth Gap?
The wealth gap between the rich and the poor, the 1% and the 99%, the white and black individuals, are
measured by their assets and net worth. Net worth is measured by subtracting your debt from your assets.
Assets are anything you own ranging from investments in stocks to residential property.
Why is it important?
Wealth determines inherent wealth, academic opportunities, amount of loans and debts, financial status, etc. A person’s wealth can also increase or decrease over time but racial wealth disparities make it harder for minorities such as black people to accumulate assets and pay off their debts.
For instance, according to “Holy Post - Race in America,” “an average black household has sixty-percent of the income of a white household but only one-tenth of the household wealth.” This tremendous wealth gap is extremely important because while both families may have a stable income, the black household’s financial expenditures on basic living such as apartment rent, transportation, student debts and loans exceed far more than the white household. These expenditures make it more difficult for the black household to save money and buy lifelong assets such as a car or house which can be passed along to future generations. Another way to explain the advantages and disadvantages that individual/household wealth brings is in the form of a race. If life was simply a race, the white individual would be equipped with roller skates (the asset) and the black individual would have regular running shoes (the asset) at the starting point. The white individual would have an advantage passed on to them by their parents that allows them to reach the finish line quicker. By contrast, the black contestant would need to work harder to reach their goal.
That said, no matter the range of struggles both individuals encounter, at the end of the day, we are all humans under a variety of skin colors. We are not so different as we are all just trying our best to live in this world.
Article Sources: https://apps.urban.org/features/wealth-inequality-charts/