A new report from the Urban Institute analyzes the wealth inequality in America over 50 years, from 1963 to 2013, and found that not only is the wealth gap growing, so are income inequality and wealth disparities between different racial and ethnic groups.

UI found that over the 50 year span, families in the bottom 10th percent of the wealth distribution went from having basically no wealth to being $2,000 in debt while families near the top saw their wealth nearly quadruple with the top one percent’s wealth grew sixfold.


Part of the cause for the wealth gap, the analysis found, is the rising income inequality.

“Focusing on private income,” the report said, “we can see that families near the top had a 70 percent increase in income from 1963 to 2013, while the income of families at the bottom stayed roughly the same.”


Despite the fact that “families of color will soon make up a majority of the population,” they will only continue to fall behind their white counterparts in terms of wealth. The study shows that, in 2013, the average wealth of white families was more than $500,000 higher than the average wealth of black and Hispanic families. In other words, white families average seven times the wealth of black families and six times the wealth of Hispanic ones.

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Over their lifetime, white Americans will amass a startlingly higher average wealth than either black or Hispanic Americans. While in their 30s, white Americans have three times as much wealth as African Americans. But by the time they reach their 60s, they will have 11 times as much as their black counterparts.



The Urban Institute also found that part of the problem with the racial wealth gap is that people who earn less have a harder time saving. “These disparities partly reflect historical racial disadvantages that continue to affect later generations,” the report said, also showing that African Americans and Hispanics were about 25 percent less likely to own a home, contributing to the racial wealth gap.

The study found that black families are also likely to have more student loan debt than white families. In 2013, they found that 42 percent of African Americans between the age of 25 and 55 had student loan debt, compared with just 28 percent of whites.

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Washington’s failed policies also contributed greatly to the wealth gap.

The federal government spent $384 billion to support asset development in 2013, but those subsidies primarily benefited higher-income families—exacerbating wealth inequality and racial wealth disparities.

About two-thirds of homeownership tax subsidies and retirement subsidies go to the top 20 percent of taxpayers, as measured by income. The bottom 20 percent, meanwhile, receive less than 1 percent of these subsidies. African Americans and Hispanics, who have lower average incomes, receive much less of these subsidies than whites, both in total amount and as a share of their incomes.

And while many lower income families do qualify for safety net programs such as food stamps or welfare, many of those programs actually discourage savings. “For instance … families won’t qualify if they have a few thousand dollars in assets or when they have to give up rent subsidies to own a home.”

UI’s analysis of the wealth gap paints a bleak picture of America right now. While we already knew that the rich were getting richer as middle- and lower-income families continue to struggle, the report shows just how bad things have really gotten. Given that the one percent and the people who benefit from these disparities run the government, it’s unlikely that things will change, and the problem will only continue to get worse.

Click here to read UI’s full analysis.