Over the past half a century, the difference in net worth held by families of color compared with white families has expanded substantially and is likely to grow amid the COVID-19 pandemic. In 2019, the median Black family had 13 cents of wealth for every dollar held by white families, and Latinx families had 19 cents to the dollar. Put another way, the typical white family had eight times the wealth of the typical Black family and five times the wealth of the typical Latinx family.

The 2019 wealth data were collected before COVID-19 began to spread in the US, so the pandemic’s impact on wealth and wealth disparities remains to be seen.

To close the racial and ethnic wealth gap, policymakers need bold solutions, which are now more pressing because of the COVID-19 pandemic’s disproportionate impact on Black and Latinx families.

In the short term, many families need financial support to offset lost income from job loss, reduced hours, and closed businesses. These losses can prevent people from paying their bills, increasing the threat of eviction and foreclosure.  More permanent remedies address the occupational segregation that results in disproportionate shares of Black and Latinx people in jobs where it is more difficult to stay at a safe distance, avoid crowded situations and enclosed spaces, and limit duration of exposure.

By enacting short-term solutions, policymakers can help ensure the racial wealth gap does not widen further as we fight the pandemic and look toward recovery and rebuilding. Longer-term solutions would set the country on a path of greater equity and inclusion and take steps toward closing the wealth gap, creating a healthier economy and more prosperous future for all Americans.

Read the full article about COVID-19 and wealth inequality by Kilolo Kijakazi, Margaret Simms, Signe-Mary McKernan, and Cary Lou at Urban Institute.