Twenty-five years ago there was a glaring wealth gap in the U.S. between blacks and Hispanics on one hand, and whites on the other. Little has changed, a new report shows.
White families are still more than twice as likely as Hispanic and black families to have wealth—assets minus liabilities—above the median U.S. level, according to a report by economists William Emmons, Bryan Noeth and Ray Boshara at the Federal Reserve Bank of St. Louis. The report analyzes data from 1989 to 2013 taken from the Federal Reserve’s Survey of Consumer Finances.
The researchers found that the median wealth levels of Hispanic and black families are about 90% lower than the median wealth levels for whites. Median family-income levels for the two historically disadvantaged groups are 40% lower, the St. Louis Fed said.
Back in 1989, the median wealth of a white family was $130,102. In 2013, it was $134,008, after adjusting for inflation. For an Asian family, the two figures were $64,165 and $91,440. For a Hispanic family, they were $9,229 and $13,900. For a black family, they were $7,736 and $11,184.
The St. Louis Fed researchers said it’s not differences in age or education levels that explain the racial and ethnic wealth disparities; these persist even if you’re looking at older and better-educated blacks, Hispanics and whites.
Put simply, the gaps in median income and wealth between black Americans and Hispanics and white Americans remain large and haven’t changed much in 25 years.
The findings are the latest to show that while America’s economy is finally picking up steam again six years after the Great Recession, many black and Hispanic Americans—and indeed, much of the nation’s middle-class—are being left behind.
Late last year, a study by Pew Research Center also highlighted the fact that while overall U.S. wealth levels are topping records, this masks persistent racial and ethnic gaps.
The lack of improvement among black and Hispanic Americans is all the more striking because the story with Asian families is very different.
They, too, are twice as likely as Hispanic and black families to have above-median wealth.
But on top of that, gaps between Asians and white Americans are narrowing; Asians’ median wealth could even surpass that of whites soon, thanks partly to the rising education levels among young Asians. (The median income for Asians has already passed white median income.)
Like white Americans, Asian families have balance sheets that are a lot stronger than those of Hispanic and black families, which helps cushion them from financial emergencies that can lead people to default on debt or take out high-cost loans. Whites and Asians also, the St. Louis Fed said, are more likely to own stock and bond investments, houses and vehicles.