In 1994 the average African-American family had less than one fifth the average net worth of white families.
Facts and Figures
The presence of poverty amidst the abundance of affluence found in our society is disconcerting. Large wealth disparities found between the rich and poor have been growing at an alarming rate.
- The wealthiest ten percent of households in the United States saw their average net worth increase 6% since 2001, and up 76% since 1995 (in 2004 dollars).
- By contrast, the poorest quarter by net worth fell backwards from being $50 in the black in 2001 to being $1400 in the red in 2004 (Federal Reserve's Survey of Consumer Finances, 2005).
Racial wealth disparities are also staggering. In 1994 the average African-American family had less than one fifth the average net worth of white families.
In response to the large disparities of wealth found in our society, policy proposals and programs have been designed to encourage the accumulation of assets among low-income and low-wealth individuals and families. Individual Development Account's (IDA) are one example of such a program that promotes the accumulation of assets. IDAs are matched savings accounts targeted to help low-income and low-wealth households accumulate savings for specified investments such as education, homeownership, retirement and entrepreneurial endeavors.
Programs that attempt to level the playing field, such as IDAs, need to grow in reach to allow all citizens an opportunity to succeed. Asset-based policies and programs promote the idea of stakeholding. By acquiring a 'stake' in the system through homeownership, starting a business, attaining an education or investing in retirement, households will overcome poverty on more than just an economic level. O•N•E believes that asset building programs can motivate and assist low-income individuals to increase their assets, boost their net-worth, break the cycle of poverty and ultimately close the wealth gap.