Voices of Our Tomorrow
Eliminating the wealth gap is crucial
By: Ernesto Gomez
The United States faces the most prominent wealth inequality than any other major developed nation in the world. America also faces larger issues of wealth inequality among races which is often unjustly dismissed with racial prejudice and stereotypes.
Proposed solutions include an increase in the federal minimum wage, expansion of earned income tax credit, education investments, progressive tax code, and ending residential segregation. Each of these policies, if implemented properly, has the potential to lift working families out of poverty, support economic mobility, ultimately reducing wealth inequality and ending the cycle of generational poverty.
It is necessary to understand the difficulty of coming out of poverty. Low-income families often endure bulky overdraft fees, high check-cashing fees, extortionate loan interest rates, and higher food costs. If this same low-income family struggling paycheck to paycheck were to face any emergency requiring cash, such as a medical emergency, or experience a loss of work hours, or even have a delayed paycheck, they could face financial ruin.
Years of slavery, Jim Crow Laws, exception from the GI Bill, redlining, low-quality schools and public services, and over-policing formed solid barriers between American minorities and the “American Dream”. Even today, the legacy of discriminatory policy plagues the American people.
Black Americans still face systematic barriers in eliminating the wealth gap between themselves and white Americans. The wealth gap remains regardless of household income, marital status, age, or education. For example, the median wealth of Black households with a college degree was about 70 percent of the median wealth for white households without a college degree. The gap also grows as households age. In 2016, Blacks between the ages of 50 and 65 who are close to retirement had only about 10 percent of the wealth compared to whites in the same age group.
Intergenerational transfers of wealth contribute to the cycle of poverty across generations. Those coming from a wealthy household are more likely to have greater opportunities than those coming from an impoverished household.
Estimations suggest that inheritance contributes anywhere from 5 to 20 percent of the racial wealth gap. The dependence of wealth based on your family’s past success puts American minorities at a disadvantage due to years of racial discrimination and prejudice.
But regardless of race or identity, the future for all Americans outside of the top 10 percent doesn’t look good. Since the 1970s the wealth divide has been growing. In 1965 the CEO-to worker compensation ratio was 20-to-1. Today it is 271-to-1.
Understanding the struggles of the poor who have unfair and unequal circumstances is necessary, and the implementation of policies benefiting the most vulnerable communities is crucial.
The idea of youth voice takes on many forms, including sharing experiences and ideas with policy makers, which many of the young people of Our Tomorrow have done. Youth leaders within the Our Tomorrow network have learned about funding for youth services and are participating in a task force with adults to form recommendations on investments in youth, presented their ideas on sex education to the State Board of Education, and participated in our annual civics fair, Speak Up! Speak Out!
However, young people’s experiences and ideas are abundant and we at Our Tomorrow and UP Partnership wanted to create a space for them to share their thoughts on current issues they face and those they see on the news. Voices of Our Tomorrow is a series of blogs that we will share every Thursday that highlight these experiences, thoughts and opinions.
These thoughts and opinions do not expressly represent the thoughts of UP Partnership, its leadership team or board of directors.