Closing the Racial Wealth Gap — Series | Closing the Gap
“Continue to build union between movements stretching across the globe because we must put away our willingness to profit from the exploitation of others.”
— the late U.S. House Representative, John Lewis
(Together, You Can Redeem the Soul of Our Nation, The New York Times)
When I was 16 years old I worked in the U.S. House of Representives as a House Page. Though I was in the Capital building and on the House floor many times with him, I never met John Lewis.
However, when I found out that he passed away it felt like I had just heard that my grandfather died.
Mr. Lewis had many admirable qualities, but the one that is most striking to me was how he always used his resources and positions of power to help the most marginalized people in our country.
Even as he neared the end of his life he chose to spend his time writing to young people with love and encouragement.
John Lewis and many women and men like him remind me of the importance of standing up for what is true and what is right.
The need to close the racial wealth gap is true, and it is the right thing to do.
We must no longer be willing to profit from the exploitation of others. Daily we see how such willingness and complacency has led to deep disparities in our country, including a growing racial wealth gap. And as we’ve discussed, the most direct way to close the gap is to increase our black neighbor’s net worth.
It’s a simple process, but it will take a lot of work.
The Simple Part
Elpida has developed a simple visual to conceptualize the process of closing the racial wealth gap. It’s called the Wealth & Worth Cycle.
The Wealth & Worth Cycle has four phases: Determine, Grow, Maintain, and Give. This process works differently for those working to grow wealth versus those who already have wealth, but it also allows each group to work in tandem. Each phase centers on net worth as its primary indicator of progress.
In the “Determine”phase we determine/calculate net worth to assess wealth status.
For black folks growing wealth: This is your starting point to determine how big the gap is between your net worth and the net worth of the average white household, which is approx. $170,000.
For those with wealth: This is an opportunity to assess your net worth and determine how much wealth to hold onto for your financial wellness and how much to redistribute for the financial wellness of others, particularly your black neighbors.
In the “Grow” phase we work to increase net worth and improve financial wellness.
For black folks growing wealth: once you know your wealth status you can engage in two main activities to grow your net worth: paying down debt and increasing income.
For those with wealth: this is your first opportunity to redistribute your net worth and networks and grow wealth for others. Strengthen relationships with your black neighbors and follow their lead on how to support them in reducing their debt load and using your networks to support them in securing highly compensated and benefited employment.
In the “Maintain” phase we work on ensuring that the wealth that’s grown will last throughout life’s ups and downs.
For black folks growing wealth: this phase includes aquiring insurance and building an emergency savings so that no matter what challenges you face your finances can withstand them.
For those with wealth: this is an opportunity to find ways to help make sure insurance is accessible to all people, particularly black people. You can also directly contribute your resources to growing the emergency savings of your black neighbors and supporting initiatives and programs that make it easier for black folks to grow and maintain savings.
In the “Give” phase the main objective is to share wealth with family and communities so that they can thrive and start making their way through the Wealth & Worth Cycle.
For black folks growing wealth: This phase involves “estate planning” like having a Will, a Health Care Power of Attorney, Financial Power of Attorney, and potentially a Trust. All of these tools allow you to pass on the wealth you have grown to your family and community in the event you become incapacitated or pass away.
This phase also involves giving or sharing what you’ve learned in the process of going through the Wealth & Worth Cycle, and being generous with your time and resources.
For those with wealth: This is an opportunity to really assess what you need, and freely give the rest away to marginalized communities with little wealth, particularly black communities.
But this phase also requires the same as it does for black folks growing wealth. Give/share what you’ve learned with your peers, and be generous with your time and resources. It will pay off.
The “A Lot of Work” Part
The hard work comes with a mental shift.
A shift from thinking individually, and thinking communally. A shift from thinking that more money means more self worth to instead seeing money as a tool to be used within the context of community. The biggest mental shift is from thinking that the racial wealth gap exists because black people don’t work hard and are bad with money to instead recognizing the inequitable systems that created the racial wealth gap and committing to dismantle them.
This current global pandemic, economic crisis, and civil unrest due to systemic racism all demonstrate that we’re interdependent, it’s time we start engaging with money as if that were true.
There is so much more value we could bring out of our communities if we only invested in them.
Over the remainder of this August we will discuss each of these phases in more detail and we will have a very special announcement at the end of the month.
See you next week.
