Monday, September 28, 2015

Wealth Inequality Gap Widens Across Racial and Ethnic Lines

The Pew Research Center reports that the wealth inequality gap has widened since the Great Recession.  According to Pew:  "The Great Recession, fueled by the crises in the housing and financial markets, was universally hard on the net worth of American families. But even as the economic recovery has begun to mend asset prices, not all households have benefited alike, and wealth inequality has widened along racial and ethnic lines.  The wealth of white households was 13 times the median wealth of black households in 2013, compared with eight times the wealth in 2010, according to a new Pew Research Center analysis of data from the Federal Reserve’s Survey of Consumer Finances. Likewise, the wealth of white households is now more than 10 times the wealth of Hispanic households, compared with nine times the wealth in 2010."  The median net worth of white families at the end of 2013 was $141,900, while the median net worth of black families at the end of 2013 was $11,000, while the net worth of Hispanic familes was $13,700 as shown in the chart above.  Essentially then, white family net worth is 13x greater than that for black families and 10x greater than that for Hispanic families.

Since 2010, white household wealth has increased by about 2.5% while black and Hispanic household wealth has fallen by 33.7% for black families and fallen by 14.3% for Hispanic families.  Why?  Stock markets have rebounded since the crash in 2008 and generally while households own more stock in retirement accounts than black or Hispanic households, according to Pew.  Further, all households have reduced asset ownership since the Great Recession, but black and Hispanic households have shed assets at greater rates than white households, including lesser homeownership.

Inequality in the United States continues unabated and the trend is that the gap is getting worse, not better.  Again, according to Pew:  "[T]he racial and ethnic wealth gaps in 2013 are at or about their highest levels observed in the 30 years for which we have data."

1 comment:

  1. Economic inequality varies between societies, historical periods, economic structures and systems as per the rules.