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Aiming to update its groundbreaking 2015 research into Boston’s racial wealth gap and help identify solutions, researchers at the Federal Reserve Bank of Boston announced a three-year research partnership with the Greater Boston Chamber of Commerce and several prominent foundations this week.
The Boston Foundation, the Greater Boston Chamber of Commerce, the Eastern Bank Foundation and the Barr Foundation are funding the research. Boston Fed Executive Vice President Prabal Chakrabarti told the audience of a Greater Boston Chamber virtual panel discussion yesterday the project will be focused on all of Massachusetts, and will take a special look at the state’s 26 immigrant-dominated, ex-industrial Gateway Cities. The aim is to build on the 2015 study to pinpoint the causes of the state’s dramatic racial wealth gap and create models that policymakers can use to test out potential solutions. The project also hopes to understand differences within the state’s minority communities to draw out why some may be succeeding in building wealth, while the majority remain behind.
“[A new study] just to tell us that the wealth gap is still there is not worth investing in,” he said.
The Boston Fed’s 2015 report, “The Color of Wealth in Boston,” shocked the city with its finding that the median Black household has a net worth of $8, compared to the median white household’s net worth of $257,000 once home equity and debts like auto loans, credit cards and mortgages are factored in.
“The story we wanted to tell…living in a capitalist system without capital is cruel, and we don’t want any family to live in that system without the choice, the same forward-looking opportunity other families might,” Ana Patricia Muñoz, head of Ecuador’s nonpartisan Grupo FARO research institute and a former Boston Fed researcher who helped write the 2015 report, said at Tuesday’s virtual Greater Boston Chamber event.
Boston Foundation President Lee Pelton, also a panelist at Tuesday’s event, said his nonprofit decided to fund the research in part because of the high stakes involved.
“These…are longstanding and will take time to unravel,” he said. “By one estimate the racial wealth gap has cost the American economy $16 trillion for the last 20 years; eliminating it in the commonwealth could raise the state GDP by $25 billion over five years.”
