Assessments of the U.S. economy confirm a growing trend of racial wealth disparity, which, economists say, bodes ill for overall economic health. The late Andrew Brimmer, Ph.D., the first African-American governor on the Federal Reserve Board, showed that discrimination reduces potential productivity throughout the economy, costing the country 3 percent to 4 percent of gross domestic product.
According to the Survey of Consumer Finances by the Board of governors of the Federal Reserve System, racial wealth disparity exists even among the nation’s richest families. African-American families accounted for just 2 percent of the top 5 percent of wealth distribution in the country in 2010, the most current figures available when this edition of TNJ went to press, hardly budging from 1.5 percent in 1998. In both years, white families accounted for more than 90 percent of the top 5 percent of families of high net worth. In 2010, the annual median income of Black households stood at $32,068, down 3.2 percent from 2009, and the median net worth of Black families, measured in constant 2010 dollars was $15,505, against $130,531 for white families. Between 1998 and 2010, the wealth of the average Black family, as a fraction of median white family wealth dropped from 16 percent to 12 percent.
The survey figures appear in an article published in the Winter 2014 issue of The Minority Report, a joint publication of the American Economic Association’s Committee on the Status of Minority Groups in the Economic Profession, the National Economic Association (representing Black economists), and the American Society of Hispanic Economists.