Giving Compass' Take:

• William "Sandy" Darity and Kirsten Mullen, at Brookings, call for drastic, long-awaited changes to public policy to reverse decades of the American racial wealth gap.

• How can we impact public policy to push for justice? Why do we need such dramatic change to alter the deeply American racial wealth gap? What can you do to lobby for change across the United States today?

• Learn more about the history of the American racial wealth gap and what needs to change.

Data from the 2016 Survey of Consumer Finances (the most recent available) indicate that Black Americans possess 2.6 percent of the nation’s wealth while constituting 13 percent of the population. The average Black household has a net worth $800,000 lower than the average white household. This, in turn, corresponds to a vast chasm in capabilities and opportunities between Blacks and Whites.

The origins of this gulf in Black and White wealth stem from the immediate aftermath of slavery when a promise made to provide the formerly enslaved with 40 acres in land grants went unmet—while many White Americans were provided substantial “hand outs” (typically 160 acres) of land in the west. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, calls this “free equity” that could be transmitted into greater economic security and prospects for wealth accumulation to subsequent generations.

During Reconstruction and thereafter, frequently, when Black descendants of the enslaved managed to achieve some degree of prosperity, their communities were destroyed by White massacres.

In the 20th century, Black wealth denial was associated to a large degree with racist policies vis-à-vis home ownership, which led to reduced rates of Black homeownership and lower rates of appreciation for those homes purchased. The situation was exacerbated in the late 1940s when the GI Bill was introduced in a manner that overwhelmingly benefited White veterans. Ira Katznelson reported in his book, When Affirmative Action Was White, in Mississippi, only two returning Black veterans received home buying benefits from the GI Bill.

Public policy has created the Black–White gulf in wealth, and it will require public policy to eliminate it.

Read the full article about the American racial wealth gap by William "Sandy" Darity and Kirsten Mullen at Brookings.