Adam Lajeunesse
Professor Brownell
EXP201
8 April 2018
Racial Wealth Gap
After hundreds of passed laws and decades of attempting to bridge monetary gaps
between the black and white race, many white people still choose to stay ignorant to the fact
that “it will take 228 years for black families to accumulate the same amount of wealth as
whites” (Vega 1). Each year, the gap continues to grow, which further disadvantages the black
community. It is imperative that society recognizes this issue, and takes appropriate measures
towards decreasing the magnitude and its effects. I am arguing that a significant wealth gap
exists and is growing between black people and white people as a result of white people’s
ignorance towards the matter, a lack of equal opportunities in schooling, and income
inequality.
One of the reasons why the wealth gap between black people and white people keeps
growing is due to the level of ignorance the majority of white people hold regarding many
problems that black people face, with one of them being disparities in interest rates on loan. In
her article titled, “The Racial Wealth Gap and the Borrower’s Dilemma”, Ngina S. Chiteji
analyzes data from 2004 relating household borrowing to the wealth gap and uncovers
shocking truths. Looking at total wealth of households, the mean net worth black to white ratio
was .197, mean value of assets ratio was .236, and the total debt mean black to white ratio was
.49. This means that on average, white people have five times the wealth of black people, and
hold 4.3 times the assets (Chiteji 353-354). The system works against African Americans,
because credit markets inevitably make it more difficult for them to accumulate wealth. The
interest rate charged to a black person for the same car loan as a white person is on average
1.4% higher, and all other loan types fall closely behind that figure (Chiteji 356). This ties back
to Coates’ “The Case for Reparations”, when he was speaking about how blacks were largely cut
out of the mortgage market from 1930-1960s, and if they were sold a home it would have been
at an insanely high interest rate. The same discrimination is seen today, except on a smaller
scale.
Homeownership is a critical part in building wealth, and society has made it difficult for
black people to participate. A chart from the Urban Institute shows that from 1976 to 2016,
white homeownership has stayed consistent at 68%, while black homeownership has increased
