By Karuna Jaggar
The economic justice movement has historically focused on income equality. To the extent that attention was given to assets, the assumption was that once families’ incomes are not consumed with basic needs, asset accrual will follow. While some gains have been made in narrowing the earnings gap, today wealth inequality is higher in the United States than any other industrialized country: the wealthiest one percent own one-third of the nation’s wealth. As with all inequality, it is important to recognize the racial and gendered elements of the disparity. In the United States, families of color own just one-tenth of what white families own.
Lack of wealth is both a cause and an effect of low income and poverty, and the two are highly correlated, creating a cycle of economic instability. Without adequate income, poor people—who are disproportionately people of color and women—are unlikely to acquire assets, whether purchasing a home or saving. Similarly, lack of asset ownership limits income opportunities, such as seeking advanced education or starting a business.
Asset ownership and wealth are in many ways a more elemental measure of economic well-being than income. Income is a short-term measure and is certainly critical for meeting daily living expenses. In contrast, wealth—which is more likely to be affected by previous generations—allows families to weather financial hardships, such as economic downturns and unexpected periods of unemployment. More profoundly, wealth creates opportunity and allows families to move from poverty to long-term prosperity.