Racial wealth gap greatest in quarter century
If it seems like the consequences of the dire economic climate keep rushing on, that’s because they are. A new Pew Research Center analysis of census data shows that the wealth gap between white people and minorities is the widest it has been in 25 years.
The average white households’ net worth is 20 times more than that of the average black household, and 18 times larger than the average Hispanic household, the data shows, according to NPR.
Roderick Harrison, who formerly specialized in racial statistics at the Census Bureau, told the Associated Press that he was reminded of race relations in the 1960s.
“I am afraid that this pushes us back to what the Kerner Commission characterized as ‘two societies, separate and unequal,'” he said. “The great difference is that the second society has now become both black and Hispanic.”
Both geographic and societal trends can help explain the growing economic divide. The minority population skews younger, with the bulk of their investments tied up in homes, while the white population is comparatively older, with their investments in 401 Ks and other markets. While the markets have bounced back, the housing market has not yet done so, especially in regions such as California and Arizona, which have large minority populations.
Between 2005 and 2009, the average Hispanic family lost two-thirds of its net worth. Black families lost about half. White families, in contrast lost about 16 percent of their wealth in the same time period.
Tom Shapiro, at Brandeis University, is a student of the racial wealth gap. He told NPR that if the economy didn’t dramatically improve soon, the gap would likely widen even further.
“If a family doesn’t have enough for a safety net for itself, it can’t think about moving forward or moving ahead,” he said.