To illustrate, consider two individuals: one owns a $200,000 house that they inherited, has no student debt because their parents paid for college, and earns an annual salary of $45,000. The other person earns $65,000 yearly, rents their home, and has $80,000 in student debt. At first glance, the person with the higher income seems to be better off. However, when wealth is considered, it becomes clear that the person with the lower income has a much higher net worth because they own a valuable asset, have no debt, and thus have a more secure financial situation.

The cause

Income inequality, housing policies, limited educational opportunities, and a lack of support structures are some of the factors that contribute to the gap. Data reveals a growing gap, since the Civil Rights era in the 1960s, in the median wealth across race and ethnicity in the United States.

It is those of the poor classes who provide the physical labor. The capitalist takes that labor and gives a wage. That wage is not equal to the amount of money made by the labor, and that is how the capitalist makes their profit. This is what is increasing the income gap between the rich and the poor.

Statistics

The wealth gap between Black and White families remains large, despite Black families’ real (i.e., inflation-adjusted) wealth gains in dollar terms.

In 2019, the typical non-Hispanic Black family had about $23,000 in wealth. That’s up 32%, from $17,000 of wealth in 2016 (using unrounded numbers). By “typical,” we mean a family at the middle or median. (The median is a useful approximation of the typical family’s experience because it’s not as likely to be affected as the average by the inclusion of data on extremely high- or low-wealth-holding families.)

That’s also 12 cents per dollar of the typical non-Hispanic white family, which had about $184,000 of wealth in 2019. Non-Hispanic white family wealth was up 4% from $177,000 in 2016.