The Racial Wealth Gap: Why Policy Matters

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The first issue with racial inequality is the wealth gap. The wealth gap negatively affects a family’s stability, such as financial support towards health and a child’s education. In “Significant racial and ethnic disparities still exist, according to Stanford report” Milenko Martinovich states that according to 2010 data, the racial wealth gap has only reduced by a total of 7 percent in the past forty years when(2). More light is shown on the racial wealth gap when reading “The Racial Wealth Gap: Why Policy Matters” when reading on, we discovered that when comparing the median of households wealth gap from 2011, that average White households had an average of $111,146, in comparison to $7,113 for average Black households, and $8,348 for average …show more content…
When we see that major difference of funds, we can also see the stress that the major amount of stress this may place a household under. It even becomes more stressful when you compare the wealth gap by different wealth classes. “The Racial Wealth Gap: Why Policy Matters” also states that today a majority of the wealth that is shared among the bottom 90 percent of Americans has actually decreased. however, the top 1 percent controls about 42 percent of our country's (the United States) wealth(Introduction, par 1). So not only is a household only being affected by the racial wealth gap, but as well as their place in wealth scale. As well as, it is also stated by “The Racial Wealth Gap:Why Policy Matters” that on average Latino and Black households only make about 6 percent of an average White household’s wealth(Introduction, par. 1). Therefore, when comparing these numbers of average households in the United States, we can actually see that the racial wealth gap not only affects the amount an average household makes, but we can also see that it can severely affect the spending choices of each …show more content…
Milenko Martinovich states that roughly 1 in 6 in both Black and Latino households spend an average of 50 percent of their income on housing(1). When that information is compared with the information provided on the racial wealth gap, we see that it leaves each household with only 50 percent of their already small income to purchase the rest of necessities that each household has. In fact, in “The Racial Wealth Gap: Why Policy Matters” we also read that when comparing homeownership rates, roughly 73 percent of White households own their own home, compared to 47 percent of Latino households, and 45 percent of Black households(How homeownership contributes to Racial Wealth Gap, par. 1). Meaning that since other races have small percentages of income compared to White households, they have to rely on other methods to obtain housing, such as renting. However, not only is it a difficult situation to obtain housing, but as well as obtaining a loan to purchase a house. According to “The Racial Wealth Gap: Why Policy Matters” we read that Wells Fargo Bank admitted to getting both Black and Latino borrowers to take subprime mortgages(Homeownership policy shapes the Wealth Gap, par 2). The reasoning that Wells Fargo pushed so hard for these borrowers to take this type of loan, was because they were under the influence that they were going to lose the money that
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