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Friday, July 29, 2011

Pew: Wealth Gaps Rise to Record Highs Between Whites, Blacks, Hispanics

The Pew Research Center has released Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics:

The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009. These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession that ended in 2009.

Chart 1

The Pew Research Center analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households. As a result of these declines, the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149. Moreover, about a third of black (35%) and Hispanic (31%) households had zero or negative net worth in 2009, compared with 15% of white households.

Chart 2

(Hat Tip: Bridget Crawford.)

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Comments

The NYT had a similar article that also mentioned Asian households, who had lost 54 percent of their household wealth (going from 168k to 78k), a number very similar to other minorities. It doesn't look to be a race issue so much as a location issue. Hispanics are typically located in areas such as California, Arizona and Florida and Asians are generally located in California. It's unsurprising that many of them lost a good deal of their household wealth, but it would be more useful to compare them against Non-Hispanic Whites who also lived in the same areas (and who I suspect were hit much worse than 16%). Most African-Americans also live in large urban areas which saw similar trends.

Given the high percentage of Whites in many areas where property values did not boom and bust, such as middle America, I don't find the facts surprising.

Posted by: ry | Jul 29, 2011 6:07:40 AM

Some are getting wise that this "hope and change" thing isn't working out so well for them.

BET: "Barack Obama Losing African-American Support Over Economy"

According to a new Washington Post/CBS poll, “The number of African-Americans who believe the president’s actions have helped the economy has dropped from 77 percent in October to just over half of those surveyed.” ..It would seem that you can only push people so far, and when you’re talking about their pocketbook, and the stability of their family, you have even less room to push.

Posted by: Woody | Jul 29, 2011 6:14:12 AM

I was in a Walmart last night (Okay, I've seen lawyers in there, too.), and it was very sad to see so many people who need help and were asking for money. These weren't crack addicts, they were regular people and families. With our country's tax threats against businesses, economic policies, and environmental over-regulation, job creation will remain stagnant.

Here's an article on a small business owner who tried to create jobs for marginally educated people, but threw up his hands and gave up in frustration over anti-business, environmental opposition: ‘I’m just quitting’: A scene right out of ‘Atlas Shrugged’ in Birmingham.

This article specifically addresses black unemployment: African-American Middle Class Eroding As Unemployment Rate Soars

...The Congressional Black Caucus has been leaning on President Obama to address the epidemic of black unemployment on his watch. So far, the president has resisted the notion of job programs specifically targeting African-Americans. His position is that a rising tide will lift all boats. But the tide remains out as far as job creation goes. ....

The Urban League’s Patrick Graham believes small business should be the major driver to employ African-Americans. ..At its convention in Boston this week, the National Urban League released a troubling report on that topic. It found that the recession has virtually wiped out all of the economic gains blacks made in the past 30 years. .....

Posted by: Woody | Jul 29, 2011 6:55:02 AM