Wealth and income inequalities just keep getting worse

Minnesota’s Black/White gap is at a ‘tipping point’

AntiPovertySoldierAmong the most talked about issues related to the financial crisis of 2007-2008 have been the ever-increasing gaps in income and wealth in both in America and throughout the world.

Only a few years after the financial crisis had officially ended, the international anti-poverty consortium Oxfam International reported that the richest one percent of all Americans had accumulated more than 95 percent of all the wealth generated from 2009 to 2014. During the same window of time, the New York Times noted that the top 10 percent of American workers took home more than one-half of America’s total income, which was the “highest proportion recorded in a century of government record keeping.”

Out of the midst of this growing inequality, the Occupy Movement and its slogan “We are the 99 %” were born. Beginning in September 2011, demonstrators eventually ascended on nearly 1,000 cities in more than 80 countries to occupy public space in protest of growing social and economic disparities around the world.

By early 2012, authorities had effectively shut down most of the camps, including most of the larger sites in American cities such as New York (Wall Street), Boston, Chicago, Denver, Oakland and Portland.

With the exception of Eugene, Oregon, where approximately 15 members of Occupy Eugene continue to live in a tent city downtown, the Occupy Movement has adopted other strategies to continue bringing attention to the issue of inequality.

In spite of criticism from both the left and the right, some analysts have argued that the movement generated significant social and political impact as the income and wealth gaps are now a major element of American political discourse. And yet, while the issue of income inequality is now front and center in the 2016 presidential campaign, it seems as though the problem is getting progressively worse as it is debated by the political class.

In this state, for example, some of the most illuminating data during the last decade or so have been the expanding social, political and economic gulfs between White Minnesotans and Minnesotans of color, particularly African Americans. I have made this the subject of several columns here in the MSR.

Moreover, a multitude of local activists, journalists, scholars, nonprofit leaders and others have continued sounding the bell with regard to the racial disparities that exist in the Twin Cities and throughout Minnesota.

And still, things seem to be getting worse. I have recently come across four reports, all published this month, which clearly demonstrate the persistence and proliferation of these disparities.

For the second year in a row, 24/7 Wall Street has ranked Minnesota as the second-worst state for Blacks to live in America based on an array of social, economic, education, and health-related measures. This is in sharp contrast to 24/7 Wall Street ranking Minnesota as the fifth best state to live in overall (regardless of race).

In another report from this month, the financial research firm WalletHub identified the states with the highest economic gaps based on race. In the report, they utilized more than 20 key measures including household income, homeownership, poverty, and educational attainment. When measuring these indicators cumulatively, Minnesota ranked 51st out of 51 (all 50 states, plus the District of Columbia). This included Minnesota’s poverty rate gap of 296 percent.

In its January 2016 report “The Economic Status of Minnesotans,” the Minnesota State Demographic Center further illustrates Minnesota’s racial disparities across more than two dozen indicators. One such indicator reveals that more than one-half of all African Americans, Dakota, Ojibwe, Somalis, Ethiopian, Hmong, Liberian, and Mexicans in Minnesota live in or near poverty.

Then just last week, MinnPost published an article by Dane Smith, president of the St. Paul-based Growth & Justice organization. In his essay, Smith noted that Black household income in Minnesota is approximately 40 percent of White household income and remains the lowest of all racial groups in the state. Smith proclaims that Minnesota is at a “tipping point” and must act now to erase its racial disparities before it is too late.

As I close, I want to bring your attention to some broader data that I believe is even more telling with regard to racial inequality not only in Minnesota, but across the country. While perusing Smith’s essay, particularly the statistics he presents on median household income in Minnesota, it occurred to me that we seldom see data on the wealth gap, which is often talked about in tandem with the income gap.

Of course, statistics that show disparities in poverty, employment and income are beyond absurd. Yet, I didn’t know what I was in for when I discovered the most recent data on wealth and race in America.

The Pew Research Center in Washington, D.C., recently published figures regarding the wealth gap between 2007 and 2013, whereas wealth (or net worth) is defined as total household assets minus liabilities. In 2007, the median net worth of a White household in America was $192,500 as compared to Black households where the median net worth was only $19,200.

As a result of the Great Recession, net worth has declined among all racial groups. Nonetheless, in 2013 the net worth of the average White American household was $141,900. During the same six year period, the median net worth of Black households plunged to $11,000.

Thus, the White-to-Black wealth ratio in America today is nearly 13 to 1, the highest it has been since 1989.


Clarence Hightower is the executive director of Community Action Partnership of Ramsey & Washington Counties. Dr. Hightower holds a Ph.D. in urban higher education from Jackson State University. He welcomes reader responses to 450 Syndicate Street North, St. Paul, MN 55104.