The Historical Reasons Behind the U.S. Racial Wealth Gap

The average White household in the U.S. today has amassed about seven times more wealth than the average Black household. The disparity widened in the half-century since the civil rights movement, despite a wave of laws protecting against racial discrimination at work, in housing and other economic realms. A wave of protests in U.S. cities last year provoked by police killings of Black citizens, including George Floyd on May 25, raised awareness of the history of what academics call systemic racism. Since then, two cities have voted to make reparations for past discrimination, President Joe Biden has supported the idea of studying wider reparations for slavery, and the Federal Reserve and a number of leading private banks have pledged to do more to address racial inequality. Here are some of the historical reasons for the racial wealth gap:

The chasm begins with slavery, which was a huge generator of wealth for White Americans. Slavery drove the cotton economy, which enriched not just the growers but everyone from banks to shopkeepers to insurers. In 2000, economist Robert S. Browne calculated that the income produced by enslaved people for their White owners prior to 1860 was between $1.4 trillion and $4.7 trillion in modern money. In 1865, at the conclusion of the Civil War that ended slavery, freed slaves were promised 40 acres (16 hectares) of land to build an economic future for themselves. But the government reneged on the deal, and Black Americans started their freed lives empty-handed. By some estimates that land would have been worth as much as $3.1 trillion today.