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Wealth Gap Between Whites, Minorities At Historic High

Wealth Gap Between Whites, Minorities At Historic High

 

A new report issued by the Pew Research Center shows that during the Great Recession the gap between median wealth of white households and minority households grew to the largest in a quarter century.

According to the report, the median wealth of white households is 20 times greater than that of black households and 18 times greater than that of Hispanic households.  These gaps are roughly twice the size of wealth ratios between the three groups for the two decades prior to the Great Recession.  In terms of percentages, the end of the housing bubble in 2006 followed by the 2007-2009 recession took a much greater toll on wealth of minorities than whites.

The numbers are astonishing.  From 2005-2009 inflation-adjusted median wealth fell by 66% among Hispanic households, 53% among black households and 16% among white households.

The report not only analyzes household wealth but also looks at the macroeconomic context of the impact of the recession, including the impact on asset ownership, the geography of the housing downturn and additional wealth gaps within racial and ethnic groups.  It is in the macroeconomic analysis that the degree to which minorities lost ground comes into troubling focus.

For example, the net worth of Hispanic households decreased from $18,359 in 2005 to $6,325 in 2009.  That dramatic decrease — a 66% drop — can be explained by the fact that Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and were more likely to reside in areas most affected by the housing crisis.  Hispanic net worth also diminished in part because of a 42% rise in median debt levels, including education loans.

Asians were also dramatically impacted by the recession.  In 2005 median Asian household wealth had been greater than median white household wealth.  But by 2009 Asians lost their place at the top of the wealth hierarchy as their net worth dropped by 54%.

To the extent that the American narrative that hard work and fair play will lead to upward social mobility was ever a truth, it certainly no longer is.  Predatory lending practices, stagnant wages and non-existent job growth have made it impossible for the next generation of Americans to move up the economic ladder.  Opportunities made possible through affordable land grant universities have evaporated — college is too expensive even at state schools and more and more minorities turn to for-profit colleges with a hope they can balance school and a full-time job only to succeed in accumulating mountains of expensive educational loans and a degree of very little utility.  This is the legacy of the Bush years — a return to the Guilded Age.

 

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Photo from tracyo via flickr.

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20 comments

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8:12PM PDT on Jul 29, 2011

Less than 10 years to slavery...tick tock

3:56AM PDT on Jul 29, 2011

Unsurprising, unfortunately. Let's face it the gap between the rich and ordinary Americans is getting wider every year.

7:11PM PDT on Jul 28, 2011

Steve R., states, "And thanks to bleeding hearts like you, I'm quite likely to lose out to a member of your "minority" groups when I apply for a job!"

Wrong Steve, you are mostly likely to lose out because of your attitude. I guess when you went to work for yourself, you were bitten by the greed bug like all the other Repigletans.

5:10AM PDT on Jul 28, 2011

Cutting spending on, so called, entitlements is ineffective for addressing the deficit. Cutting programs that support the low and middle class will further strain both who don’t even receive lower prices as a result of the U.S. job losses and create a disconnect that will end in another financial collapse. The justification for attacking government benefits as opposed to raising taxes is the creation of jobs. But where?

Corporations have over-powered our government which now believes that out-sourcing and off-shoring of U.S. jobs is inevitable and necessary with expectations that the middle class should fall on their swords. It is the underlying cause of the financial collapse and borders on national security with the loss of our middle class tax base. Yet, this nation does nothing, not even demand it be restricted by whatever method. International businesses are doing the UN-AMERICAN activity of destroying U.S. salaries, U.S. businesses that hire in the U.S., and as an end result, destroying the U.S. marketplace while still demanding BUSINESS ENTITLEMENTS and protections for themselves.

Infrastructure spending and tax breaks will not replace enough jobs to keep up with the hemorrhaging loss of U.S. jobs from out-sourcing over seas. Neither party will do anything about it unless we begin grass roots efforts to protest out-sourcing and off-shoring of U.S. jobs. If nothing is done we will deserve what we get and it will get a lot worse before it gets better

2:45AM PDT on Jul 28, 2011

Thomas m, robby c. Whites are not the minority. Hispanics are also white in that they are europeans. You and I probably can't tell the difference between someone from Ghana and someone from Kenya, but to them they are completely different. We just see them as Africans. Hence the not completely accurate term 'African american'. And the completely accurate term 'European american'. 
And even though there's a black man in the whitehouse, whites In general are still opposed to blacks. Then how comes he's there then? People might  ask. A majority white country voted in a black person? That's probably because he was the best man for the job at the time. And for the people of the world, don't think that just because America voted in a black man that it's not racist. Pakistan has had a woman leader and their attitudes to women still stink

6:02PM PDT on Jul 27, 2011

Thomas M- shhhhh.... be quiet- they'll call you a racist for saying that ;-)

5:49PM PDT on Jul 27, 2011

I thought the Whites ARE the minorities now. Sure the hell seems like it.

5:15PM PDT on Jul 27, 2011

Steve R- again, I thank you- you usually save me a lot of typing...

3:51PM PDT on Jul 27, 2011

And everyone can thank George W. Bush for destroying the United States and her people.
RECALL ALL REPUBLICANS!!!

2:50PM PDT on Jul 27, 2011

"We the people..." How many of us forget.

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