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This week’s episode is dedicated to a conversation with journalist Kimberly Atkins Stohr. We discuss her series about how to solve the racial wealth gap.
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The racial wealth gap between Black and white Americans began with the institution of slavery, and it has been reinforced throughout history by discriminatory policies, such as redlining. These practices made building wealth difficult for many Black Americans. The median wealth of a white family was roughly $188,000 in 2019, according to the Brookings Institution. For Black families, that number was just over $24,000. Solving the racial wealth gap will take a reimagining of how our financial system works, including the structure and use of credit scoring, says Kimberly Atkins Stohr, senior opinion writer and columnist for Boston Globe Opinion.
When it comes to credit scoring, Atkins argues that the structure of credit scores is discriminatory and leads to disparities in scores between Black and white Americans. For example, mortgage payments are counted as good behavior, while rent payments are generally not considered. Since Black Americans are less likely to be homeowners than white Americans, they can have fewer opportunities to build up good credit.
Opt-in tools like Experian Boost and UltraFICO can help mitigate the financial challenges Black Americans face. But Atkins suggests curbing the practice of using credit scores for non-credit related decision-making, like whether or not to hire someone. Solving the racial wealth gap will need to be approached on numerous fronts, and it starts with reimagining the systems we currently have in place.
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Sean Pyles: The racial wealth gap has been carved over centuries. Can it be bridged in our lifetime? Welcome to the NerdWallet Smart Money Podcast. I’m Sean Pyles.
Liz Weston: And I’m Liz Weston. In this episode, we’re talking with Kimberly Atkins Stohr, opinion writer for The Boston Globe and the inaugural columnist for The Emancipator. The Emancipator was the very first anti-slavery newspaper in the United States when it was founded over 200 years ago. Today, it’s been given new life as a collaboration between The Boston Globe and Boston University’s Center for Antiracist Research.
Sean Pyles: Kimberly recently wrote a series for The Emancipator about solving the racial wealth gap, including how we got to where we are today, the prejudices built into credit scores and the …….