By bridging the racial wealth divide, we can reduce the economic inequality that’s holding down our entire country.
The marches in the streets may have been provoked by police conduct in Ferguson and Staten Island. But there is a deeper dream that has been deferred.
The gap between white wealth and Black wealth has grown since the end of the Great Recession of 2007-2009. According to a new Pew Research Center analysis, the 2013 median wealth of white households is 13 times greater than the median wealth of Black households, up from 8 times greater in 2010. White households have 10 times more wealth than Hispanic households, up from 9 times greater in 2007.
Median wealth for Black households in 2013 was $11,000, down from $16,600, a staggering decline of 33.7 percent. For white households, the median wealth was $141,900, up from $138,600 in 2010, an increase of 2.4 percent.
Between 2010 and 2013, the median wealth of Hispanic households declined 14.3 percent, from $16,000 to $13,700.
There is a high correlation between wealth –what you own minus what you owe –and security. Wealth provides a cushion, reserves to fall back on in the face of hardship. Homeownership has been a foundational asset, something to pass on to one’s children.
While people of all races saw their net worth implode during the recession, white wealth has slightly recovered. This is because whites own more financial assets, such as stocks and bonds, which have rebounded since 2009. Meanwhile home values, which represent the largest share of assets for households of color, have not rebounded at the same rate.
This study does not pull out the richest 1 percent of white households, which have captured a huge percentage of wealth growth in the last decade.
Politicians are quick to point to the good news of declining unemployment and foreclosure rates, but there are other signs of deeper distress in the economy.
The U.S. homeownership rate has been steadily declining, from 69 percent in 2004 to 64.4 percent in the third quarter of 2014. For Blacks, the homeownership rate fell from 45.6 percent in 2010 to 42.9 percent in the third quarter of 2014. Over 40 million people have student debt averaging $33,000. And over 43 million households are holding medical debt.
Behind these statistics are people’s lives under stress, people losing homes, jobs, savings and stability. The collapse of middle class wealth has touched people of all races, but has been more severe in communities of color.