Here's one reason why America's racial wealth gap persists across generations – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Life Insurance News
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Articles
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
Sign in or register to be an INNsider.
  • Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
  • Insider Pro
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Advisor News
Newswires RSS Get our newsletter
Order Prints
August 15, 2022 Newswires No comments
Share
Share
Tweet
Email

Here's one reason why America's racial wealth gap persists across generations

Minnesota Public Radio (MN)

Angela Chevaux and her husband have made a good living in York, Pa. She's an insurance claims supervisor and he's in construction. But still, a recent inheritance from her father-in-law has been life-changing. He left them a retirement account, a life insurance policy, an annuity — and her husband and his brother inherited an old farmhouse in a secluded spot with a pond.

"We were able to buy the property — the other half — out from his brother at a decent price," Chevaux says.

She figures they paid about half what the appraised value would have been.

Related stories

  • Fed slows rate hikes even as Powell says there's more work to do
  • Mortgage rates in U.S. fall again, hit 6.09%

They're renovating the farmhouse to live in and are selling their own home, saying goodbye to 11 more years of payments.

"We'll be mortgage-free at [ages] 50 and 59!" she says with a laugh.

Her father-in-law also left Chevaux's 24-year-old son a money market account.

"He had given our son some money towards college before he passed," she says. "So then this allowed him to pay off the rest of his college debt."

Her son is a financial adviser and has invested the rest of his inheritance, with plans to use it to help buy a house.

The family's financial fortunes show one way that America's stark racial wealth gap has persisted — and even widened — over generations. White adults are more than twice as likely as Black and Latino households to get sizable financial help from parents or other elders. That's according to a new poll by NPR, the Robert Wood Johnson Foundation, and the Harvard T.H. Chan School of Public Health.

Dorothy Brown, a tax law professor at Georgetown University, wishes more white families would talk about these intergenerational benefits.

"Because you have Black Americans who are doing everything they were told is right and not getting ahead," she says. "And they're scratching their heads wondering, 'How come I'm not doing better than I am? How come I'm not doing better than the guy in the cubicle next to me?' "

The new poll finds 38% of white adults say they've gotten at least $10,000 in gifts or loans from a parent or older relative. Only 14% of Black adults receive similar gifts or loans. The share is 16% for Latinos and 19% for Native Americans.

Brown says this divide reflects generations of segregation and racism, especially in housing policies. Racially restrictive covenants barred white people from selling or renting their homes to African Americans or other minority groups. And Federal Housing Administration policies supported such restrictions.

"So if your grandparent got a home that was FHA insured, it was a result of their being white," she says. "You don't think about that, but it was."

The racial wealth gap is also evident in lots of other questions in the poll.

"When people talk about the American dream, it's here," says Robert Blendon, a Harvard professor emeritus of health policy who worked on the poll.

A large number of Black, Latino and Native American adults say they want to move to better housing and expect their children to go to college, but they don't have the money to pay for those things.

"These minority communities are ... going to have to borrow everything in a very risky environment for that," Blendon says, "and they don't have anything to at least help defray some of the costs."

What's at stake, he says, is the ability to make the choices that can help families, and future generations, move ahead.

For Black Americans, wealth is more likely to flow up

For African Americans, especially, tax expert Brown says the generational wealth transfer is actually more likely to go the other way — children helping parents who suffered under Jim Crow.

That's the story of Theodore Bailey, who's 76 and remembers a tough childhood in segregated Nashville.

"My father died when I was 3 years old," he says. "My mother was a single mother with four sons."

His dad died while he was a military cook in World War II, which led to a major break for Bailey. As a war orphan he was able to go to college on the GI Bill, and that launched a successful career as an engineer and missile designer. From early on, Bailey sent money to help his mother get by.

"I knew she was struggling, you know. And at the time, I didn't have a whole lot to spare, but I'd send her whatever I could," he says.

Now retired in Arizona, Bailey says he's always helped family. That includes supporting a brother who lost a job, sending grandchildren to college, and being there for others along the way.

"Oh," he says with a chuckle, "there's always cousins and nephews and things that want to borrow money, and a lot of times they don't pay back."

Research shows family help like this seriously depletes the wealth of college-educated Black Americans. Bailey says he's now having to cash out more of his IRA than he'd like to in this bad market, to meet his own expenses.

He's not sure how much there will be left to pass on to his children and grandchildren.

"I invested in them, putting them through college and so forth," he says. "I'm hoping they can take care of themselves."

Copyright 2022 NPR. To see more, visit https://www.npr.org.

Older

'Just stunned': NC woman who manages a McDonald's plans to buy home with $1 million lottery win

Newer

Colorado adopts new annuity sales regulations

Advisor News

  • Fed slows rate hikes even as Powell says there's more work to do
  • Mortgage rates in U.S. fall again, hit 6.09%
  • 1 in 3 Americans struggling financially but goal-setting is a game-changer
  • Advisors bet on US stocks to outperform in 2023 amid tech rebound
  • Investors want more ESG information from companies
More Advisor News

Annuity News

  • Study: Does pessimism really suppress annuity sales?
  • Sweet streams of income: ChatGPT, the bard of annuities
  • F&G Annuities & Life announces equity investment in life IMO SYNCIS
  • Investors scrambling to lock in rates propel annuity sales to record highs
  • North American and Annexus launch new fixed index annuity
Sponsor
More Annuity News

Health/Employee Benefits News

  • State: all insurers failed to comply with Oregon Reproductive Health Equity Act
  • Will plan fix California health care?
  • Insurance giant Elevance to move into 15th state
  • Medicare card scam targets seniors for personal info
  • Yes, states are re-checking Medicaid and CHIP eligibility starting in April
More Health/Employee Benefits News

Life Insurance News

  • Chris Wilson tells court former friend Murdaugh confessed he was ‘stealing money’
  • State's motive testimony could prolong Alex Murdaugh murder trial
  • Equitable expands portfolio in VUL market
  • New date set for billionaire suspect accused of bribing state cabinet member
  • House approves bill protecting life insurance payouts from bankruptcy
More Life Insurance News

- Presented By -

Top Read Stories

  • Chicago news roundup: PPP fraud uncovered in Chicago, informant reveals $100K bounty on FBG Duck and more
  • Gov. Carney: Enrollment on Delaware's Health Insurance Marketplace for 2023 Reaches All-Time High
  • 25 people charged in fake nursing diploma operation
  • Missouri Department of Insurance: Over $24 Million Returned To Missouri Insurance Consumers In 2022
  • Connecticut addressing broker shortage amid The Great Unwinding
More Top Read Stories >

FEATURED OFFERS

Meet Encova Life
We know agents matter. You can count on our life team to be high tech, high touch and responsive.

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Articles
  • Monthly Focus

Top Sections

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2023 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.