In an address to Members of Congress and participants attending a Congressional Black Caucus meeting, Robert L. Johnson, founder and chairman of The RLJ Companies, called for a national discussion about the growing wealth gap which he referred to as a “wealth gap Tsunami threatening African- American families.”
The founder of Black Entertainment Television and billionaire cited the recent Institute on Assets and Social Policy at Brandeis University study, among other studies, which conclude “the wealth gap between white and African-American families has more than quadrupled over the course of a generation; the racial wealth gap increased by $75,000, from $20,000 to $95,000; and, at least 25 percent of African Americans have no assets.” According to U.S. Census data, “white household median net worth is 10 times that of Black households. The median net worth for African Americans was $11,800 compared to $118,000 for whites.”
During his speech, Johnson cited a study by United for a Fair Economy that found that “for every dollar of white per-capita income, in 1968, African Americans had 55 cents and only 57 cents in 2001. At this pace, it would take African Americans 581 years to get the remaining 43 cents and achieve income parity with whites.”
Johnson also made reference to a 2007 Pew Charitable Trusts study that found that “nearly half of African Americans born to middle-income parents in the late 1960s plunged into poverty or near-poverty as adults” and “45 percent of black children whose parents were solidly middle class in 1968 – a stratum with a median income of $55,600 in inflation-adjusted dollars – grew up to be among the lowest fifth of the nation’s earners, with a median family income of $23,100.”
“These indisputable facts point out that middle-income whites have far more wealth than even some high-income African Americans,” Johnson said. “Equally disturbing, educational success achieved by many Blacks has not led to racial wealth equality. The current economic crisis that we confront will only serve to exacerbate and magnify the growing wealth disparity.”
Johnson told Congressional leaders late last month that part of the reason for the race-based wealth gap can be attributed to past racial inequities and injustices that have never been adequately acknowledged or addressed by lawmakers. “We must admit the harsh reality of a history of institutionalized racism and economic discrimination against African Americans is the primary cause of wealth disparity between Black and white Americans” and “we must be willing to talk about race recognition remedies at the highest levels of government as well as between Black and white Americans.”
“How do we address this compelling national crisis?” Johnson asked. “First, we must admit that a history of institutionalized racial and economic discrimination against African Americans is the primary cause of wealth disparity between Black and white Americans.
“Unless this harsh reality is addressed, the wealth gap will continue unabated and we will confront a society where many Black Americans are the recipient of entitlements and white Americans are faced with making transfer payments to support the economic well being of these African-American families.”
Johnson suggested that the wealth disparity between Blacks and whites compares to the “compelling national interest test” cited in the Supreme Court’s Adarand decision where the Court ruled ‘a racial or ethnic classification must serve a compelling interest and must be narrowly tailored to serve that interest.’ In his remarks to the Caucus, Johnson listed several race recognition policy initiatives that could be discussed. Among the recommendations Johnson said deserved more attention and discussion among lawmakers was allowing African-American families earning less than $250,000 annually to defer all federal income taxes, without interest, provided tax savings are placed into a 401(k) type savings account which can only be drawn out at retirement or upon death at which time the government would be reimbursed for the deferred taxes. He contended that this would allow the gain on the 401(k) investment to be available to the families at retirement or passed on to future generations.
“I wish the answers to close the wealth gap were as politically palatable and acceptable as proposals to make our public schools better for minorities, to retrain minority workers for the new jobs market, and aggressively enforce laws against racial and economic discrimination,” Johnson said. “Over the years, this nation has been committed to all of these objectives, but this effort will not close the Black wealth gap. I recognize that public policy based on race is extremely provocative and controversial but controversy should not prevent a reasonable dialogue about a societal dilemma that is real and economically devastating in its potential to millions of African Americans,” he concluded.
Posted By: Siebra Muhammad
Monday, August 2nd 2010 at 1:23PM
You can also
click
here to view all posts by this author...
