By bridging the racial wealth divide, we can reduce the economic inequality that’s holding down our entire country.
New Census survey stats show a substantial widening in the net worth gap between and within white, black, and Hispanic America.
Has the Great Recession been an equal opportunity destroyer? Or have some Americans survived the nation’s worst economic downturn since the 1930s significantly better than others?
A new report from the Pew Research Center, based on extensive Census Bureau survey work in 2005 and 2009, resolves these questions — on two fronts.
The first: ethnicity. The Pew data show that the Great Recession has widened the wealth gap substantially between white and black and white and Hispanic households.
In 2005, the typical white household held seven times more wealth than the typical Hispanic household and 11 times more than the typical African American household. In 2009, these gaps stood around twice as wide, 18 times between white and Hispanic households, 20 times between white and black.
The primary source of these growing wealth gaps between white and minority households? The collapse of the housing bubble.[pullquote]The Great Recession has grown the wealth gap “in favor of the wealthiest within each racial and ethnic group.”[/pullquote]
Minority households get much more of their net worth from the equity they hold in their homes than white households. Geography exacerbates the gap: Hispanic families reside disproportionately in the states — California, Florida, Nevada, and Arizona — that have seen home values sink the fastest.
But the new Pew report tells another story as well. The Great Recession hasn’t just widened the wealth gap between ethnic groups. The recession, the Pew researchers note, has widened the gap within each ethnic group — grown that gap “in favor of the wealthiest within each racial and ethnic group.”
The richest top 10 percent of white households have increased their share of white household wealth, from 49 to 56 percent. For the richest 10 percent of black, Hispanic, and Asian households, even heftier increases.
How much of that increasing wealth share for the top 10 percent have the really rich — households in the top 1 percent — grabbed?
The Pew report can’t help us here, since Census surveys don’t effectively track wealth at America’s economic summit. The best data on wealth at the top come from the Federal Reserve’s triennial Survey of Consumer Finances. The next of these studies, covering 2010, won’t be out until next winter.