Tuesday, July 26, 2011

Wealth & Race in America

Here is a bit from a Pew Research report on the wealth gap between racial groups in America:
Click to Enlarge

Hispanics: The net worth of Hispanic households decreased from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all groups. Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and are more likely to reside in areas where the housing meltdown was concentrated. Thus, the housing downturn had a deep impact on them. Their net worth also diminished because of a 42% rise in median levels of debt they carried in the form of unsecured liabilities (credit card debt, education loans, etc.).

Blacks: The net worth of black households fell from $12,124 in 2005 to $5,677 in 2009, a decline of 53%. Like Hispanics, black households drew a large share (59%) of their net worth from home equity in 2005. Thus, the housing downturn had a strong impact on their net worth. Blacks also took on more unsecured debt during the economic downturn, with the median level rising by 27%.

Whites: The drop in the wealth of white households was modest in comparison, falling 16% from $134,992 in 2005 to $113,149 in 2009. White households were also affected by the housing crisis. But home equity accounts for relatively less of their total net worth (44% in 2005), and that served to lessen the impact of the housing bust. Median levels of unsecured debt among whites rose by 32%.

Asians: In 2005 median Asian household wealth had been greater than the median for white households, but by 2009 Asians lost their place at the top of the wealth hierarchy. Their net worth fell from $168,103 in 2005 to $78,066 in 2009, a drop of 54%. Like Hispanics, they are geographically concentrated in places such as California that were hit hard by the housing market meltdown. The arrival of new Asian immigrants since 2004 also contributed significantly to the estimated decline in the overall wealth of this racial group. Absent the immigrants who arrived during this period, the median wealth of Asian households is estimated to have dropped 31% from 2005 to 2009. Asians account for about 5% of the U.S. population.

No Assets: About a quarter of all Hispanic (24%) and black (24%) households in 2009 had no assets other than a vehicle, compared with just 6% of white households. These percentages are little changed from 2005.
The difference in outcome for these different groups comes down to where their wealth was held. Only the whites had significant financial assets and these assets have mostly recovered. The other groups (even the previously dominant Asian group) has most of their wealth in their home (or small business) and these assets have not recovered during this Little Depression.

You would expect that the American people would be fighting mad that they are being forced to struggle through this Little Depression while their politicians in Washington are not concerned about jobs, unemployment, credit to small businesses, or Main Street. Instead Washington is wrapped up in itself with an ideological battle over "debt".

I should make it very clear: when I say "Washington" is wrapped up around itself over "debt" I mostly mean the Republican obstructionists, but I also include the idiotic "leadership" of Obama that allowed itself to twiddle away almost 2 years on health care instead of jobs & recovery, and is now wrapped up in "debt" rather than jobs & recovery. A plague on both their houses!

No comments: