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An Exclusive Discussion On The Racial Wealth Gap With Melvin Gravely II

Photo courtesy of Melvin Gravely II

According to the Federal Reserve System, the average white family has eight times the wealth of a typical Black family while also having five times the wealth of a typical Hispanic family. The gaps in wealth between Black and white households reveal the widely negative issues of accumulated inequality and discrimination.

Disparities of power and opportunity can also be connected back to inequality beginning at the inception of the United States. Numerous impediments throughout history prevent Black Americans from creating wealth. The violent massacre of Tulsa’s Greenwood District in 1921, congressional mismanagement of the Freedman’s Savings Bank in 1874, and the discriminatory Jim Crow policies in the late 19th century are all significant historical markers that contribute to a trend of unequal monetary inheritances.

According to the Brookings Institution, over the last thirty years, the median net worth for white households has far exceeded that of Black households through recessions and booms. Economists Darrick Hamilton and William Sandy Darity conclude that inheritances and other examples of intergenerational wealth “account for more of the racial wealth gap than any other socioeconomic and demographic indicators.” The accumulation of wealth often exists along a life-cycle arc, which illustrates families accumulating wealth during one’s working years in preparation for retirement. Intergenerational transfers of wealth are lightly taxed, which helps the wealth persist through historical gaps over generations.

Wealth is a safety net that allows people to take personal and career risks, remain secure amongst setbacks, and have a higher quality of life for themselves and their families. The racial wealth gap largely contributes to society not affording equality of opportunity for all citizens, thus creating an array of inequalities that affect numerous aspects of the lives of marginalized individuals. 

Melvin Gravely II is a business leader, author, and educator diligently working to help entrepreneurs succeed. He is the majority stakeholder of Triversity Construction Company and was named president and CEO in 2011. Gravely has also served as CEO of various businesses in industries varying from a civil and structural engineering firm to a management consulting practice. Additionally, he founded the Institute for Entrepreneurial Thinking Ltd., a think-tank focused on getting the best results from minority business development initiatives.

Gravely shares his knowledge of business and entrepreneurship by authoring numerous books on business success, leadership, and minority entrepreneurship. His upcoming novel, “Dear White Friend: The Realities of Race, the Power of Relationships and Our Path to Equity,” taps into three critical questions at the heart of racial issues in America. By educating as a professor, writing books, and developing forums for individuals to expand their business knowledge, Gravely is considered a leading national thinker on business and entrepreneurship.

“African Americans are more likely to inherit poverty instead of wealth, so generation after generation, we fall further behind.” Gravely

The New York Trend spoke with Gravely.

New York Trend: What inspired you to found the Institute for Entrepreneurial Thinking?

Melvin Gravely II: The inspiration came from the notion that our future relies on an increase in entrepreneurship amongst Black individuals since there needs to be a focus on creating multigenerational wealth.

New York Trend: In what way does intergenerational wealth affect the racial wealth gap? 

Melvin Gravely II: African Americans are more likely to inherit poverty instead of wealth, so generation after generation, we fall further behind. Money makes money. So having wealth for the first time is an essential first step, and passing it on begins a powerful and uplifting journey.

New York Trend: What are some common obstacles for Black entrepreneurs getting started? Does the wealth gap play a part in this? 

Melvin Gravely II: The wealth gap is definitely an obstacle. Actionable relationships also prove to be an obstacle. These relationships would be ones to which you can take your entrepreneurial ideas for help in developing these ideas into capital.

New York Trend: What actions do you believe should be taken to help ease the strain of the racial wealth gap on people? 

Melvin Gravely II: We have to study reparations. I don’t know of another way to close this gap without paying back lost wealth from past centuries. Additionally, our tax code and tax structure are likely areas to help marginalized communities recover lost wealth; however, this would not likely allow them to catch up to the majority.

New York Trend: What is one thing that you want aspiring entrepreneurs and business owners to know? 

Melvin Gravely II: There is nothing more important than the strength of your business idea and your personal capabilities.

About the Author

Morgan McBride is a current college student studying journalism with a passion for digital media and storytelling. She takes pride in providing informative and engaging content. She hopes to continue to explore and create intriguing conversations.

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