DAVID GREENE, host: A number we heard this week underlines a shift that continues in our economy. Even though the economy grew in 2010, median income actually fell. Some people are winning big; others are losing, and for decades the gap between them has been growing.
STEVE INSKEEP, host: That leads over time to a huge difference in the accumulated wealth of different families. And this morning we'll report on the gap between white and black families. The average white family has 20 times the wealth of the typical black family. According to the Pew Research Center, that is the biggest wealth gap in 25 years. NPR's Pam Fessler starts a two-part series with the story of two families - one white, one black.
PAM FESSLER: Dametra Williams and Stephanie Upp aren't that different in many ways. Both were raised by single mothers who struggled financially. Both worked hard to get where they are today. But just listen to how these two California women describe basically the same thing. First, Dametra: 40, African-American, a single mother of one, who just started her own business.
DAMETRA WILLIAMS: It's funny, you know, the American dream is sort of steeped in this myth of, you know, work hard, be self-sufficient, you know, and push yourself forward, pull yourself up by your bootstraps, that kind of thing. But much of the wealth in this country was not built on that, in no way, fashion or form.
FESSLER: And now here's Stephanie, 43, white, mother of two, part-time consultant.
STEPHANIE UPP: You know, I think about the little things, that, like when I went to college, when I graduated, you know, my mom had enough resources to give me her car so that I had a car to get to work so that I could earn money that I could then save to help put me into the next position that I could then save more money and have opportunities. So it wasn't like we had a lot, but there was enough. I didn't do it all by myself.
FESSLER: And that's the difference. White families are more likely than blacks and Hispanics to enjoy certain economic advantages, even - and this is important - when their incomes are similar. Often it's the subtle things: help from mom and dad with a downpayment on a home or with college tuition, or a tax break on money passed from one generation to the next. Tom Shapiro of Brandeis University has tracked hundreds of families for almost 30 years. He says the gap perpetuates itself.
TOM SHAPIRO: The larger the amount of financial wealth a family starts with, the more financial wealth it accumulated over that period of time.
FESSLER: In other words, it's easier to get richer if you already are. Since African-Americans and Hispanics are less likely to have much wealth to begin with, they're less likely to have money to invest in the stepping stones to success - a small business or college or home. Let's go back to Stephanie Upp.
UPP: How about Cowboy Ned and Andy? Have you read that one yet?
FESSLER: She, her husband, Ben Corson, and their two children live in a small bungalow in Oakland. Tonight, they snuggled on the couch for bedtime reading. Three-year-old Calder sits on dad's lap as six-year-old Clare reads.
CLARE CORSON: Sir Kay(ph) was eager to register for the jousting...
FESSLER: This family is well on its way to achieving the American dream. Ben works in software. Stephanie consults for nonprofits.
BEN CORSON: Good eyes. And is that your three peas?
FESSLER: But Stephanie credits her success in part to something that happened a long time ago. When her parents divorced, her mother insisted on keeping their home in suburban Kansas. They didn't have much money, but they had stability and good schools, where college was a given and expectations high.
UPP: In my mind, there wasn't a question that I would have a richer life than I grew up with both financially and then also in terms of experience.
FESSLER: College led to grad school, then a career, then Ben. They started a family, and when they wanted to buy their first house, they got an unexpected boost.
CORSON: We were able to have a downpayment for this house, thanks to my great aunt.
FESSLER: Great Aunt Dottie left the couple $60,000 in her will.
CORSON: So that definitely helped us.
FESSLER: Tom Shapiro of Brandeis says inheritance is big when it comes to the racial wealth gap. White families are four times more likely than blacks to inherit. And when they do, the median inheritance is 10 times greater. Now Stephanie and Ben plan to leverage their house into a new and bigger one, and better schools.
UPP: OK, Clare bear. Good night, sweet pea.
FESSLER: Stephanie says they aren't rich but they have options. Clare reads a poem painted on the wall above her bed.
CORSON: You have brains in your head, you have feet in your shoes, you can steer yourself any direction you choose. Dr. Seuss.
FESSLER: Choices and expectations - experts say they can make all the difference.
WILLIAMS: When you don't have enough money to make any mistakes, the bottom line is, you just don't - you know, there's no room.
FESSLER: Today, Dametra Williams thinks she finally has choices. Her home health care business in Berkeley is getting off the ground, and she beams when her 18-year-old daughter, Yvonne, talks about getting into Mount Holyoke for college.
YVONNE WILLIAMS: I applied to so many.
WILLIAMS: That she did; she applied to about 23, 24 schools - I'll say the numbers. And she was offered admission and scholarships to about 18 of them, so I'm very, very proud.
FESSLER: But it's been a very, very tough journey. Only 12 years ago, Dametra and her daughter were poor and homeless. Dametra says that in her family, growing up in Texas, education was not a priority and college wasn't in the cards.
WILLIAMS: My plan was to work and start my family.
FESSLER: Unlike Stephanie's mother, Dametra's didn't own a home - not uncommon among black and Hispanic families. In fact, about a third have no assets at all - double the rate for whites - no home equity, no mortgage interest deduction, and certainly no Great Aunt Dottie.
WILLIAMS: There was no cushion, you know, for me to go back to, so the reality for me was either make things work and/or be homeless, you know. I remember my grandmother telling us we could do anything we wanted to do.
FESSLER: But, she says, not how to do it. Like inheritance, financial know-how is key. Stuart Butler of the Heritage Foundation says families that don't expect to climb the economic ladder often don't acquire the skills to do so. He says some blacks especially, after decades of discrimination, can be discouraged about their prospects.
STUART BUTLER: If somebody thinks they will not succeed, there is a high probability that they won't succeed, because if they don't expect to go to college, if they don't expect to be affluent, they start doing things with that in mind.
FESSLER: Like not planning for the future. Dametra attended one college briefly at the urging of a school counselor, but dropped out when she realized she didn't have the right skills. Instead she started a family. When she and Yvonne's father split, her income wasn't enough. Dametra and her daughter wound up homeless, then in public housing.
WILLIAMS: It was really hard.
FESSLER: But here's where her story takes a turn. Dametra was poor but smart. With the help of a housing authority savings program, she eventually returned to college and got her degree.
WILLIAMS: She's the first one to go to college in our family, by the way. Just throwing it out there.
FESSLER: Dametra also got Yvonne into private schools through a special program for inner-city youth. Nonprofits helped her to save money for tutors and a business. Today, she thinks she might be breaking the cycle.
WILLIAMS: Families of color in particular are becoming much more knowledgeable and much more aware on how to create wealth here in America. 'Cause I think there is a formula for it, and it's not work hard and do well. Most poor people work really hard.
FESSLER: She says she's still working hard to catch up, but that Yvonne at least is going into the world with the headstart she never had. Pam Fessler, NPR News.
(SOUNDBITE OF MUSIC)
INSKEEP: And tomorrow we'll hear about efforts to narrow the racial wealth gap. This is NPR News.