The importance of generational wealth
At Prosper Waco we envision a future in which every Wacoan has financial security, stability, and growth. In fact, financial security is one of the three core components of our collective impact strategy. We, like many organizations, understand that in order to work towards financial security for all, we must consider things such as access to housing, childcare, and high paying jobs in every neighborhood.
There is, however, another factor to consider that is widely overlooked: generational wealth. According to William Darity, professor of economics at Duke University, generational wealth is defined as a collection of assets that gets passed down from one generation to the next. According to this research that Professor Darity conducted, wealth is the most significant dimension of economic well-being, and generational wealth is the number one reason that people have wealth. In this framework, wealth comes from things like properties, money gifted from family members, and emergency funds.
Some examples of what wealth provides us:
Greater access to private schools or better public schools, debt-free college education
Capacity to participate politically
Fund of resources to use in emergency situations without emptying bank account (medical emergency, loss of job, etc.)
Reduced financial stress simply by knowing you have this backup
Wealth is not the same as income. In fact, even a high paying job does not automatically create wealth as one might think. This is especially true for minority groups. In fact, according to the research done at Duke, unemployed White Americans have higher net worths than Black Americans who work full time. Let that sink in for a moment.
In addition, higher education does not necessarily equate wealth for minority groups either. Research shows that Black college graduates have about $10,000 less in net worth than Whites who never finished high school. It is clear that the racial disparity in generational wealth is a serious issue that makes it extremely hard for people of color to reach a level of financial well-being.
Minorities make up about 45% of Waco so we know the disparity in wealth is affecting our community. With all of this given data, Prosper Waco recognizes how important it is to utilize this knowledge to work towards financial growth and security for every resident. We will continue to work towards this common goal and will use this research as a foundation for building upon and informing others of the present disparities. We have hope that the future Waco is a thriving and equitable place to live for every single individual.
Alysse Traverso is working on her Masters of Social Work at the University of Texas at Arlington, and currently serves as an intern at Prosper Waco.