500 Years of the Racial Wealth Gap

The experiment of America is over two centuries old. Throughout our history, systems were designed that isolate and separate us, and that empower a select few—based on the invention of race—with the privilege of innovation, creativity, and power.

Policies, laws and practices have conferred advantages and disadvantages along racial lines—including in education, jobs, housing, public infrastructure and health. As a result, racial disparities exist across all indicators of success. Median Black household income in 2017 was $38,183 while the median white household income was $61,363—a gap of $23,180. Data from the Urban Institute showed that, in 2016, median white household wealth was $171,000 compared to median Black household wealth of $17,409.

Racism and inequity are products of design. They can be redesigned. As we work to close the income and wealth gaps, we must honestly and openly reckon with this history and its implications on the current context.

This timeline seeks to answer three questions:

What policies and events created and maintained the racial wealth gap?
What efforts have been made to repair past harm?
How have Black and white wealth and homeownership rates changed over time?

This timeline focuses on the history of slavery and reparations for African Americans, but a parallel timeline could exist highlighting institutionalized and systemic oppression toward Native Americans and attempts for reparations. As you read the following history, remember that all of this happened–and continues to happen–on stolen land.

Use the arrow keys or scroll to move through the timeline. At the end, you'll find a link to data sources and recommendations for further reading.

An undeniable "font of phenomenal wealth"

"Cotton grown and picked by enslaved workers was the nation’s most valuable export. The combined value of enslaved people exceeded that of all the railroads and factories in the nation. New Orleans boasted a denser concentration of banking capital than New York City...Given the choice between modernity and barbarism, prosperity and poverty, lawfulness and cruelty, democracy and totalitarianism, America chose all of the above."

- Matthew Desmond, from The 1619 Project

It took just one generation for white slaveholding families to regain their riches after slavery was abolished. Despite the financial losses they experienced after Emancipation, by 1900, the sons of the richest slaveholders were, once again, wealthier than other wealthy families who hadn't own slaves before the war.

The most likely explanation for the restoration of their wealth, according to the study, is the “role of social networks in facilitating employment opportunities and access to credit." The study found that "white resilience to economic catastrophe has been almost impenetrable."

- Reported by Brentin Mock in CityLab, "White Americans’ Hold on Wealth Is Old, Deep, and Nearly Unshakeable"

National Housing Act

The NHA creates the Federal Housing Administration (FHA), which insured private home mortgages with innovative loans that made homeownership a wealth-building opportunity for millions of Americans.

Redlining, which refers to the federal Home Owners' Loan Corporation's (HOLC) colored maps indicating communities of color as "high-risk" for mortgage lending, effectively barred Black families from benefiting. Racist restrictive covenants urged by the FHA barred white homeowners from selling to Blacks; real estate agents steered Black families away from white neighborhoods; and harassment and violence persisted. These and other tools were wielded by white residents to maintain neighborhood segregation.

By 1940, 80% of properties in Los Angeles and Chicago had racial covenants prohibiting sales to Black people.

"In 1865, just after Emancipation, it is not surprising that African Americans owned 0.5 percent of the total worth of the United States.

But by 1990, a full 135 years after the abolition of slavery, Black Americans still possessed only a meager 1 percent of national wealth."

- PBS, "RACE: The Power of An Illusion"

Timeline curated and designed by Megan McGlinchey & Alyssa Smaldino, Living Cities

If you found this timeline useful, or would like a printable version of the full timeline, please reach out to us at racialequity@livingcities.org

Title art by Pete Railand for Just Seeds