The wealth gap is the difference between acquired wealth and assets between the white population and (primarily, but not inclusively) the black and Hispanic population. On the outside, it is primarily based upon numbers – such as the value of white homes being ten times that of black or Hispanic homes – but there is more to the story than just the visible numbers. The wealth gap is also about the systematic structuring put into place by legal and financial institutions that have helped to at worst widen the gap and at best keep it the same.

Historically, financial institutions (primarily lending) have helped to create this gap by purposefully giving better opportunities to white clients, and worse opportunities to black clients. Additionally, as per the book, between 1934 and 1962 the federal government had allotted money for housing loans, but the vast majority of these loans were given to white citizens – only two percent of these loans went to nonwhite citizens. Too, in the early 20th century, banks decided that housing areas that were primarily white had higher value than those areas that were primarily nonwhite (particularly black). This artificially increased the gap. This practice was outlawed in 1968, but that did not end the discrimination. Even today, white clients are guided towards prime mortgages, while nonwhites (particularly blacks) are guided towards subprime mortgages. Even in 2003, blacks and Hispanics were more likely to be turned down for mortgages – while Asians, as the model minority, were slightly more likely to be approved over whites.

Currently, there are numerous factors that help to sustain the wealth gap. Labor is a big one. Blacks and Hispanics make around 20% less than whites, and in addition to that are less able to invest or save that money. Investment, in this instance, is an example of the rich getting richer and the poor getting poorer.

Education is another factor. People with degrees tend to make more than those without degrees, and nonwhites are not as likely to be able to get degrees. As we saw with the race and education model, poor schools are more likely to have black or other nonwhite students. These poor schools tend to gear children towards low-end opportunities, such as working in factories or in retail. As a result, children are not aided in going to college. Not only that, but because they live in poor areas they are exposed to other poor lifestyles, such as criminal/gang activities. As a result, they are much less likely to advance to college (or even finish high school) than their white middle-class counterparts. Thus, they are not afforded the same job opportunities that higher education provides. People in poor areas who do go onto college have to overcome much harder obstacles than their white-class counterparts.

And, of course, not acquiring valuable skills or learning cycles back into the issue of labor. People without a high school degree or a college degree – and no opportunity to learn other valuable trade-skills – are more likely to make less, or find a job that does not pay much. Then, in order to make ends meet, a person might be forced to work two or three jobs – which then further limits their opportunity to learn valuable skills that might help them get a better paying job.

As a result of all of this, we go into the last factor: housing. Housing is a major way to store money, and accrue value. However, being born of poor parents, getting a high school (or less) education, and being forced into a labor pool that does not provide much money results in either only being able to rent or buying a home in a poor area that is unlikely to accrue value (and may even depreciate). Then, a person’s children will only be able to attend a poor school, which inserts the next generation into the same cycle.

As for future solutions, I’m going to go on to sounding like a broken record: education, and educating children. Sadly, the poor in our country tend to be devalued (in more ways than one) and left behind; there is an aversion in our society and culture to aiding people who are in rough situations. We tend to think of them as being lazy, and their issues as being their own fault. However, our society and culture has a tremendous weak spot for children. By raising the minimum standards allowed in schools (and very stringently enforcing those standards), providing aid programs for schools below standards, and investing more money into those schools, we raise the chance of breaking the cycle. Additionally, providing good after-school programs (either by creating or helping to expand those that already exist) for these children so they are less likely to turn to the criminal element in their need for camaraderie, self-value and structure, would also help to break the cycle. Further, helping state colleges provide more financial aid opportunities for high school graduates from poor families would also be a start.

Additionally, educating children from all walks of life into thinking about people as people would help to break the cycle. These are the people who will one day be working in financial and legal institutions, and who will one day face the choice of looking at someone’s skin color and deciding what opportunities they are allowed to have.

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