Impact of Discrimination on Racial and Economic Inequality

Impact of Discrimination on Racial and Economic Inequality

A comprehensive study and analysis of contemporary racial and economic inequality in the United States cannot be done without considering the impact of past economic, racial and economic discrimination. Racial inequality is concerned with the study of the advantages and disparities affecting the various racial groups in America. Racial inequality reveals the imbalances in the distribution of political and economic opportunities that can be traced to the discrimination of yore meted out to the minority racial groups. Past acts of discrimination negatively fuel both racial and economic inequality and need to be properly addressed.

The African-American community is the worst affected racial group in terms of racial and economic inequality in the United States of America. According to a study done by Brandeis University, the wealth gap between African-American households and Caucasian households in 2009 was $236,500 (Matthews). This shows a glaring economic inequality that is worsening every year. The study further states that the wealth gap between the average African-American household and that of a typical Caucasian family is widening at a constant of 1.5 percent per year (Matthews). Matthews argues that the wealth of the average African-American household is estimated at $5,600 while that of the average Caucasian family is valued at $113,000.

Individual family wealth is what is used to tabulate both racial and economic inequality. Wealth is defined as the total economic worth of things or assets owned by a family minus the family’s debts and liabilities (Matthews). Wealth does not include income as income is defined as earnings from employed work, dividends, and pensions. Wealth is important in determining the economic lifestyle of households. According to Matthews, a survey conducted by the Federal Reserve only 5 percent of African-American households are worth more than $350,000 while more than 30 percent of Caucasian households own more than that amount.

The massive gap in wealth between African-Americans and Caucasians can be traced to the discrimination meted out to African-Americans in the past. African-Americans were shipped to America in the 18th century as slaves. Their labor was inhumanly and degradingly exploited by their white masters in massive agricultural plantations and mines that were Caucasian-owned. Therefore, African-Americans labor was used to make economically empower the average Caucasian family in America. The African-Americans being slaves were not commensurately paid for their labor with most of them being given pittance that could only sustain their survival.

Upon the abolition of slavery in the United States in 1865 the Southern States of America carried on with their segregation and racist policies that kept the African-American man at the lowest strata in American society. The African-American families lacked land and with that, they had to offer their labor to feudal lords who were largely White as land tenants. This further fueled the gap between African-Americans and Whites as the African-Americans were offered meager salaries as their toil made the Caucasian farm owners rich. Wealth cannot be generated without the dialectic use of commercial banks for savings and borrowing of finances. Most African-Americans were exempted from the use of banks and where they were allowed were subjected to higher interest rates compared to their White counterparts. This contributed to the African-American community having low opinions about banks and therefore not accessing the services offered by commercial banks.

In closing, the racial inequality coupled with a widening economic gap between Whites and African-Americans has its roots in the past discrimination of the African-American community. The limited access African-Americans had in the past to political, civil liberties and economic inequalities contributed largely to their inferior economic and racial status

Work Cited

Matthews, Dylan. “The Massive New Study on Race and Economic Mobility in America, Explained.” Vox, Vox, 21 Mar. 2018,