Black Americans in 2019 had one-sixth the wealth of White Americans on a per capita basis, according to analysis in a paper this month from economists Ellora Derenoncourt, Chi Hyun Kim, Moritz Kuhn and Moritz Schularick. Though that’s a drastic improvement from the 60-to-one ratio in 1860 on the eve of the Civil War, it’s still less than what they had in the 1980s. 

“The recent role of capital gains in the widening of the racial wealth gap paints a sobering picture for the future of racial wealth convergence,” the authors wrote in the paper, circulated by the National Bureau of Economic Research. 

“In the absence of policy interventions or other forces leading to improvements in the relative wealth-accumulating conditions of Black Americans, wealth convergence is not only a distant scenario, but an impossible one,” they said.

The pandemic saw wealth concentration reach its highest level since World War II, Derenoncourt, from Princeton University; and Kim, Kuhn and Schularick, of the University of Bonn in Germany, said. 

Should current wealth-accumulating conditions continue for coming generations, they estimate the level of White-to-Black wealth could reach 8.4 by 2200 from around 5.6 in 2019. In that year, Black wealth stood at $60,125.58 compared to $338,092.80 for non-Black households.

The failure of the Black and White wealth gap to narrow since the 1980s can in large part be attributed to the types of assets that make up each group’s holdings. Black households hold nearly two-thirds of their wealth in housing and very little of it in stocks, while White Americans own shares of publicly traded companies in much greater numbers. In the past 70 years, stocks have appreciated five times as much as housing prices.

But the vast chasm between White and Black wealth following emancipation — when Black Americans were freed from bondage without receiving reparations for the nearly 250 years of US enslavement — would ensure a wealth gap today even if Black Americans hadn’t been left out of major wealth-building opportunities in the past 160 years, the authors found.

“Even under equal conditions for wealth accumulation after slavery, in other words, identical savings rates and capital gains across the two groups, our convergence model portends a racial wealth gap of 3 to 1 today,” they wrote.

The authors find that policies that marry reparations with ones targeting portfolio composition changes could one day lead to a convergence in White and Black wealth, but it could take hundreds of years.

“Nevertheless, we argue these approaches are complementary, as policies that redistribute stocks of wealth without addressing racial gaps in savings and capital gains have but a transient effect on the wealth gap,” they wrote.

The Federal Reserve has published wealth data by race since 1989, but not much data is available before that. The economists created their dataset, which dates back to 1860, in part by using census figures and by digitizing 50 years’ worth of southern state tax reports.