What is the Racial Wealth Audit™ ?
Wealth is critical for family financial security and the capacity to build a better life. Today, the typical white household owns more than 13 times the wealth of an African American household and more than 10 times the wealth of a Latino household.
As this country rapidly becomes both a more diverse and an increasingly unequal nation, policymakers face the urgent need to address such wealth gaps. A racial justice filter of this sort has been lacking from understanding how policy impacts different communities. In addition, it has been extremely difficult to determine which policies can truly begin to reduce racial wealth disparities.
The Racial Wealth Audit™ is a framework that yields a better understanding of how a policy or program might impact the racial wealth gap. In particular, the Racial Wealth Audit™ can be used to evaluate the effect of housing, education and labor policies on the wealth gap between white, black, and Latino families. Drawing on data from the nationally representative Survey of Income and Program Participation (SIPP) and the Survey of Consumer Finances (SCF), the Racial Wealth Audit™ measures how current racial disparities in wealth would change if key racial wealth gap factors were equalized.
The legacy of past discrimination in housing and other resources has been codified into current policy when programs that ignore these persistently unequal outcomes are enacted. But policy offers the chance to either intensify or combat current trends, which are leaving households of color increasingly more vulnerable financially. The Racial Wealth Audit™ provides the information necessary to identify and promote public policy decisions and designs that overcome discrimination and the barriers to wealth accumulation rooted in history.
The Racial Wealth Audit™ fosters greater wealth equality by reshaping the discussion of how policy affects economic disparities across communities. It promotes more informed engagement with constituencies, advocates, organizations, the public, and policymakers as a normal feature of policymaking.
IASP and Dēmos work in partnership with organizations interested in utilizing the Racial Wealth Audit™ to demonstrate the effect of a policy proposal on the racial wealth gap, for the purpose of defending social protections or to move forward.
