For Financing Higher Education, the Racial Wealth Gap Remains Huge

A decade ago Melvin L. Oliver, now a professor of sociology at the University of California at Santa Barbara, and Thomas Shapiro, professor of law and social policy at Brandeis University, published a landmark study on the racial gap between blacks and whites in America. Their research, reported in the book Black Wealth/White Wealth, found that white middle-class families whose head of household had a college degree had an average net worth of $74,922. On the other hand, black families with similar incomes and educational levels had an average net worth of only $17,437. Thus, these middle-class black families had only 23 percent of the wealth of middle-class white families.

The huge differences in financial assets (stocks, bonds, money in the bank, etc.), which can readily be used to finance the cost of higher education, are far greater than the figures for overall net worth. According to the Oliver and Shapiro study, white middle-class families had an average of $19,823 in financial assets. Black middle-class families had an average of only $175 in financial assets. Thus, white middle-class families had on average 113 times more in financial assets than black middle-class families.

Now the two scholars have published a second edition of the book with two new chapters updating some of the data on the racial wealth gap. The authors find that despite a small narrowing of the racial income gap, the racial differences in wealth remain huge. “Right now 80 percent of black kids begin their adult life with no assets whatsoever,” Oliver reports. “That’s not the case for white kids. If they don’t have financial resources, they have access to them through their families.”