Right now, white young people have 16 times the wealth of black young people. Baby bonds, a proposal embraced by likely presidential candidate Cory Booker, would give newborns savings accounts that would be worth tens of thousands of dollars by age 18. It’s an ambitious plan – and, according to a new study, it would almost entirely close the wealth gap between black and white young people.
Booker’s plan would offer all newborns $1,000, and then add up to $2,000 annually for children in low-income households. By age 18, that could add up to serious money; Booker’s team estimates that for kids from lowest-income families, the nest egg would average about $46,000. The median black person, by contrast, had a median net worth of $2,900. That is a ratio of 15:9: White young people were nearly 16 times richer than their black counterparts.
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