Wednesday, May 10, 2017 | 2 a.m.
CARSON CITY — There is a wealth gap between white families and those of color, an issue that experts say Nevada lawmakers can help solve.
It would take an average black family 228 years to accrue the same amount of wealth as a white household today, according to Solana Rice, state and local policy director at the Corporation for Enterprise Development.
Rice and Opportunity Alliance Executive Director Nancy Brown spoke Tuesday before the Senate Committee on Revenue and Economic Development and the Assembly Committee on Taxation, telling lawmakers what they can do to help close the growing racial wealth gap.
“Data shows that minorities are having a more difficult time building wealth and moving up the economic ladder than whites,” Brown told members of both committees. “This is not due to the lack of hard work but because of years of policies that were created that kept African-Americans and minorities from building wealth.”
Rice said a 2014 study shows closing the racial wealth gap would improve the American economy by $2.1 trillion, a 14 percent increase.
She said the gap isn’t necessarily a matter of working hard to get ahead, but the result of years of American policies that have left some groups out.
Rice said the G.I. Bill was one example of policies that have prevented minorities from building wealth at pace with white families. Veterans officials distributed most of the low-cost home mortgages and other benefits to white service members under the bill, as banks generally refused loans for mortgages in black neighborhoods and blacks were still not welcome in suburban America.
Another example, Rice said, is the country’s minimum wage protections in the 1930s that left out professions mostly held by African-Americans. Servers, shoe shiners, domestic workers and others in tip-based professions predominantly filled by African-Americans were excluded from the Fair Labor Standards Act of 1938.
The law permits an employer to take a tip credit toward its minimum wage obligation for tipped employees. Sen. Aaron Ford, D-Las Vegas, said after the hearing that such policies that are implemented on racial grounds should be rejected.
“While the rationale given for, for example, a tip credit, makes sense on its face, when you look at the actual genesis for the rationale in the first place, it makes me cringe,” Ford said during the hearing.
Sen. Julia Ratti, D-Sparks, said the presentation was intended to make lawmakers aware of the research being done on the topic.
Several factors contribute to the gap, Rice said, such as education, employment, home ownership and policies that disproportionately leave out minority families. One of those is homeowner tax credits, and Rice said tax reform is needed.
One of the barriers to homeownership is a higher percentage of income going toward rent, Rice said, which impacts the ability to save while paying bills and maintaining a solid credit score. In Nevada, data from 2014 shows over 61 percent of white households own homes compared to more than 27 percent for African-Americans.
Families looking for low-income housing with Section 8 vouchers can face discrimination from renters. Rice said this is another area where lawmakers could step in.
Rice said that even when unemployment improves nationally, a disparity still exists for people of color.
Consumers also need to be protected from predatory loans, Rice said. Her presentation showed support for Assembly bills 163 and 222, which deal with these types of loans. AB163 is set for a May 10 hearing, but AB222 failed to meet an April deadline to move forward this legislative session.
Assembly Bill 255, on the other hand, was included in Rice’s presentation as an issue to oppose. The bill seeks to exclude out-of-state customers from rules related to certain short-term loans and passed unanimously out of the Assembly.
Brown said one important step the Legislature can also take is passing Senate Bill 118, which would create the Financial Security Task Force to research the best course of action to bridge the gap.
“The purpose of today’s presentation was is not to point fingers but to provide an understanding of policy history that have kept minorities from building wealth and what can be done now and in the future to change the course of history,” she said.
This version of the story has been updated with comments from state Sen. Aaron Ford, D-Las Vegas.
