Thesis statement: Wealth inequality has widened along the racial and ethnic lines in America

Reference story: Harrison Bergeron by Kurt Vonnegut

Wealth inequality is the unequal distribution of resources among the citizens or residents of a nation or society. Wealth included personal valuables, homes, investments, businesses and automobiles among others. In America, the gap between the rich and the poor has widened in recent times. There are also major differences in wealth acquisition among the different ethnic groups existing in America. Wealth inequality has widened along the racial and ethnic lines in America.

During the great recession, household wealth of American families dropped dramatically. The family’s wealth decreased by 39.4% from the year 2007 to 2010. In the year 2013, typical American families had a net worth of $81,400, which is almost the same as 2010 (Kochhar 2). The financial markets and housing crisis that led to the great recession had a great effect on the net wealth of all American families. As the economy recovers, the prices of assets and investments are increasing. However, families are not benefiting alike. According to data analyzed from the Federal Reserve’s Survey of Consumer Finances in the year 2013, white household wealth was 13 times the wealth of black households. The wealth of white households is also 10 times more than the wealth of Hispanic household as compared to 9 times in the year 2010 (Kochhar 2).

As noted by the Federal Reserve, a number of factors are responsible for this widening gap. A major reason is the minority households are not saving as much as the white households are after drawing out their savings during the recession period. In addition, white households are more likely to own stocks indirectly or directly through retirement accounts (Kochhar 3). Thus with the end of recession, stocks recovered in value benefiting the white households more than the minority households.

A study done by Brown (2016) to investigate the racial inequality in wealth increase between middle life and late life revealed that wealth trajectories differ by race/ethnicity. Brown (38) found out that by middle life, a white household have accumulated a net worth of $105k as compared to $5k and $39k for the black and Mexican American families. As the whites advance in life, they tend to accumulate more wealth as compared to other groups. As mentioned by Kochhar (3), white households are more likely to indirectly or directly through retirement accounts. This is consistent with Browns findings that the white households accumulate more wealth by late life. After retirement, they invest in stocks, which increase in value with time. By late life, these investments will have grown by high rates.

The lack of wealth among the minority groups has an impact in the economic security of the families of the minority groups. Brown (38) found out that the minority groups have insufficient retirement assets to help them sustain a comfortable standard of living in their life span. Thus, such households are forced to delay their retirement and even after retirement, the retirement benefits cannot be enough to sustain them and invest.

From the historical racial discrimination in America, there arose in wealth inequality between the different racial groups in America. With the great recession of 2008, most of the households lost their savings and investments. After the end of recession, the increase in the value of investments has benefited households differently. Thus, the wealth inequality between the racial and ethnic lines has increased.

Work cited

Brown, Tyson H. “Diverging Fortunes: Racial/Ethnic Inequality in Wealth Trajectories in Middle and Late Life.” Race and Social Problems 8.1 (2016): 29-41.

Kochhar, Rakesh, and Richard Fry. “Wealth inequality has widened along racial, ethnic lines since end of Great Recession.” Pew Research Center 12 (2014).

 
Do you need an Original High Quality Academic Custom Essay?