As this presidential campaign season gets under way, the racial wealth gap is getting a fair amount of attention. African-Americans typically have about one-tenth the wealth of whites. Several presidential hopefuls such as former Secretary of Housing and Urban Development Julian Castro as well as Sens. Kamala Harris and Elizabeth Warren have supported the idea of reparations for the descendants of slaves to rectify this massive inequality born out of an unspeakable historic injustice.
A new paper from researchers at the Cleveland Federal Reserve now argues that almost all of the wealth gap between African-Americans and whites is driven by the racial income gap – African-Americans earning about half of what whites earn.