Fact check: Biden claims the racial wealth gap reached a 20-year low
Ahead of South Carolina's February primary, President Joe Biden appealed to the state's Black voters by touting his administration's efforts to bolster racial equity in the economy.
Posted — UpdatedAhead of South Carolina’s February primary, President Joe Biden appealed to the state’s Black voters by touting his administration’s efforts to bolster racial equity in the economy.
"We’re growing back Black wealth, but we have a lot more to do," he said Jan. 8 in Charleston at Mother Emanuel AME Church, the South’s oldest Black church. "The racial wealth gap is the smallest it’s been in 20 years, under my watch. More Black small businesses are starting up than in decades. Opening a new business (is) the ultimate act of hope."
Economists use both measures to assess the racial wealth gap, so Biden’s statement covered only half of the picture — and it was the more favorable half. All of the wealth measures calculate assets minus liabilities.
Since Biden made the statement in the context of Black wealth and when speaking to a Black audience, we focused this fact-check on economic disparities between white and Black families. The Federal Reserve also reports wealth data for Hispanic, Asian and other nonwhite communities.
Although average American families’ incomes grew during the COVID-19 pandemic, significant economic disparities between white and nonwhite families persisted. In 2022, the median wealth for white families was more than six times larger than that of Black families.
Data on the racial wealth gap shows a mixed bag
One way to determine the racial wealth gap is to measure Black families’ wealth in comparison with white families. This is calculated by dividing the median total wealth for Black families by the median total wealth for white families.
Average wealth increased for families in all racial groups from 2019 to 2022, partly because of pandemic-era government benefits. Black families had the fastest growth in wealth during this period, with a 61% jump. The typical white family’s wealth increased 31%.
However, despite this surge, Black families’ total dollar increase in wealth still trailed far behind that of white families.
From 2019 to 2022, the median wealth for white families increased by almost $67,000. For Black families, median wealth increased about $17,000. Because of the uneven increases, the wealth gap between white and Black families expanded by about $50,000, bringing the total wealth disparity to more than $240,000.
Both ways of measuring the racial wealth gap are accurate, said Jonathan Welburn, a senior researcher specializing in economics at the Rand Corp., a nonpartisan research organization.
The racial wealth gap during the Biden administration
In South Carolina, Biden took credit for the narrowing racial wealth ratio, saying it happened "under my watch."
PolitiFact ruling
Biden said, "The racial wealth gap is the smallest it’s been in 20 years."
By one measure, the white-Black wealth ratio, that’s true. In 2022, that ratio modestly reduced to the smallest it’s been in 20 years.
By a different measure, the dollar amount difference in wealth, the gap widened between white Americans and Black Americans to more than $240,000. That’s the largest disparity since 1989, the earliest year recorded in the Federal Reserve data.
Biden’s claim is partially accurate, but leaves out additional context about how the Federal Reserve assesses the racial wealth gap in the U.S.
We rate this claim Half True.
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