The “pernicious and persistent” impact of long-outlawed policies like “redlining” blacks out of white neighborhoods continues to influence the ability of minority families to amass wealth, and requires a deeper look at how those longstanding problems might be addressed, Atlanta Fed president Raphael Bostic said Friday.
Even as laws have moved forward to forbid discriminatory practices, “progress has been incremental,” with the median white household today holding 10 times the assets of a similar black household, Bostic said in webcast remarks to a conference on racial justice and finance hosted by the Atlanta Fed and Princeton University. “This ratio is not much changed from what it was more than 100 years ago.”
“Something more fundamental must happen,” Bostic said, encouraging researchers and policymakers to “look ‘under the hood’ at our institutions to see and truly understand their design and its implications … We can then find more creative and accurate ways to incorporate race into our models” and “truly create meaningful and lasting change.”
He did not offer specific policy suggestions, but noted how the exclusion of farm and domestic workers from Depression-era social insurance programs excluded a disproportionate number of blacks from benefits, while both redlining and other housing policies undermined the accumulation of wealth.
That and other policies have compounded over time into a persistent wealth gap.
Bostic, the first black person named president of one of the Fed’s 12 regional banks, has been among the most outspoken Fed officials in an evolving conversation at the central bank about economic inequality.