The Federal Reserve Bank of Boston released a study today confirming the racial wealth gap in our neighboring state of Massachusetts.
Their research found that the median net wealth in Massachusetts is $7,800 for Black families, $1,200 for Latino families…and $549,200 for white families.
That is an appalling and deeply consequential gap. It is most starkly experienced by the Black and Latino families who struggle to get ahead, and all residents and communities are harmed by living amidst this kind of extreme inequality.
The Fed’s data is most useful because it reminds us of three important truths:
It should also serve as a wakeup call for Rhode Island. We have no reason to believe that the results of such a study would be better in our state. If anything, we’d expect median wealth rates to be lower across the board, as Rhode Island’s household median net worth is less than half Massachusetts’.
First, wealth is a lagging indicator that compounds over generations. Factors such as homeownership, educational attainment, and levels of debt all play a role in an individual family’s wealth, and advantage or disadvantage is magnified from one generation to the next. Wealth begets wealth; the lack of wealth begets the lack of wealth.
Second, these kinds of wealth gaps do not happen by accident. They are the result of systemic and structural barriers that have made it harder for Black and Brown people to access the primary drivers of wealth in this country — ownership of real estate, businesses, and investment assets. This report dispels the myth that economic security is solely the result of individual effort. Structural barriers require structural solutions.
And third, wealth matters. Wealth is a cushion. It is perhaps the greatest factor in how people are able to withstand challenges – whether a car repair, family illness, or national recession – and persist, adapt, and transform themselves.
Learn more about the history of wealth in Rhode Island
Local Return is committed to building community wealth in historically disinvested communities through ownership and investment. For people and the places where we live, ownership leads to wealth, and wealth leads to resilience.
