THE AMERICAN RACIAL WEALTH GAP PART 2 OF 2

Posted: Wednesday, August 21, 2013 by Bryan Troupe in Labels: , , , ,
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The three factors that make up the middle class are a home, healthcare, and a college education. It can be said that the middle class is what defines the American Dream. The middle class is definitely the underlying force which drives this country. Without the purchasing power and the skilled workers that the middle class provides, the United States would by no means be a global power.


Many may not know that the middle class was actually created by the U.S. in the aftermath of World War II. After the second World War, demand for U.S. products rose to as high as it had ever been. New government programs enabled more individuals to obtain home loans. New programs also enacted reforms targeting discriminatory lending practices and made mortgage interest tax deductible. Minimum wage was raised to the highest than it had ever been in 1968. [here]


That was then and this is now.The structures that provided these opportunities have now either weakened or become obsolete over the last forty years. Because of this, a growing gap between the rich and the poor has emerged. The factors that make up the middle class, (a home, healthcare, and college education), have risen to extraordinary costs, outpacing growth in incomes. Because of this, the American people are finding it increasingly difficult to enter and remain in the middle class. [here]


WHY THERE IS A WEALTH GAP
Obviously, a lack of assets make it difficult to enter into or stay in the middle class. This means that securing a financial position is almost impossible for families, their children, their children's children, and so on. Each generation does not have the ability to pull themselves up. The idea of the middle class is, of course, that security and financial stability transfers across generations. This gives the future generations the head start that is often needed to succeed in life.


As we discussed in Part 1 of this series, low wealth individuals are predominantly African Americans. Also, most African Americans own more debt than they do assets. As long as there is more debt owed than assets owned, there will continue to be a large wealth gap.


Education is a definite way to eliminate the wealth gap. The question is, how will many low wealth individuals be able to afford education?

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