Closing the Racial Wealth Gap to Build an Inclusive Economy

As the media sheds light on the senseless killing of one young black person after another, the inequities and structural barriers facing communities of color have come into sharp focus. Those events and countless others have served to remind the country of these challenges and have also reignited a much-needed conversation about racial equity, including the role public policy plays in social and economic outcomes for communities of color. With this in mind, the Asset Building Policy Network (ABPN) hosted a Capitol Hill Policy Forum last week that brought together a panel of local and national experts to discuss ways to close the racial wealth gap.

As we noted in our recent infographic, the racial wealth gap we see today is responsible for the fact that households of color own just a fraction of the wealth owned by white households. Decades of discriminatory public policies that have intentionally limited the social and economic mobility of individuals and families of color established this gap generations ago.

To address these longstanding challenges, last week’s Capitol Hill Policy Forum brought together experts from financial institutions, civil rights organizations, community development organizations and advocates, all of whom are investing in strategies to close the racial wealth gap and enable low-income communities of color to achieve long‐term financial security.

During the event, speakers and panelists discussed some of the common barriers preventing us from developing solutions to address racial wealth disparity. Congresswoman Judy Chu (D-CA), for example, raised the issue that the “Model Minority” narrative that often pervades discussions about the Asian American and Pacific Islander (AAPI) community is a myth; in fact, the number of AAPIs living in poverty has grown greatly since the Great Recession. As Jeremie Greer, Prosperity Now’s Vice President for Policy & Research, noted, Congresswoman Chu’s comment points to the importance of improving and disaggregating data so we can gain a deeper understanding of the specific problems facing each disenfranchised community.

ABPN EventAfter Representative Chu’s remarks, panelists discussed how community (dis)investment, public policy and persistent financial insecurity have affected communities of color. Several panelists highlighted how communities of color continue to be left out of the mainstream economy and how various public systems, such as the federal tax code and criminal justice system, are contributing to an economic lag. Finally, panelists underscored the transformative impact that financial access—or lack thereof—can have on low-income families of color.

Last week’s ABPN event illustrated that there is no silver bullet to closing the racial wealth gap—we will need to deploy multiple solutions in order to do so. Most importantly, the event highlighted that racial wealth disparity is not just a problem facing communities of color—it’s a problem that affects everyone in the United States. As our nation shifts towards a majority-minority population, ensuring that families of color have an equal opportunity to achieve financial well-being is not just a question of doing the right thing; it’s a question of ensuring the long-term stability of the U.S. economy.

The Asset Building Policy Network is comprised of Center for American Progress, Prosperity Now, Citi Community Development, The Leadership Conference on Civil and Human Rights, National Association for Latino Community Asset Builders, National CAPACD, National Council of La Raza, National Urban League and PolicyLink.