US race wealth gap at widest in quarter century
Source: Agencies |
July 28, 2011, Thursday
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THE wealth gap between whites and minorities in the United States has reached the widest in a quarter of a century, after the economic crisis hit non-whites the hardest, a recent study has shown.
The median wealth of white households is 20 times greater than that of black households and 18 times that of Hispanic households, according to an analysis of newly available government data from 2009 by Pew Research Center, an independent think tank.
That is the largest wealth gap since the data was first collected 25 years ago and is about double the level in the run-up to the 2007-2009 recession.
"Plummeting house values were the principal cause of the recent erosion in household wealth among all groups, with Hispanics hit hardest by the meltdown in the housing market," senior researcher Rakesh Kochhar said in the report, published earlier this week.
The disparity surged from 2005 to 2009 as the housing market's collapse bled equity from homes.
Minority wealth is more concentrated in homes than among whites, which helps explain the widening.
From 2005 to 2009, Hispanic median net wealth shrank by two thirds and blacks' by 53 percent, against a 16 percent drop for whites, Pew said.
More than half the net wealth of Hispanics and blacks is concentrated in homes, compared with 44 percent for whites. Housing prices fell 27.3 percent from the fourth quarter of 2005 to the fourth quarter of 2009, according to the Case-Shiller National home price index.
In 2009, black median household wealth - the sum of assets minus debt - stood at US$5,677, compared with US$6,325 for Hispanics and US$113,149 for whites, the Pew report said.
Blacks and Hispanics lost a greater percentage of wealth than whites in the stock market and mutual funds also.
High long-term unemployment and shrinking incomes, themselves results of the economic slump, may also have contributed to minorities' dramatic dips in wealth.
In June, 16.2 percent of blacks were unemployed, compared with 11.6 percent of Hispanics, and 8.1 percent of whites, according to data from the Bureau of Labor Statistics.
Hispanics saw the largest drop in wealth, in part because many live in the regions of the country hardest hit by the housing bust - Arizona, California, Florida and Nevada.
The Pew analysis is based on data from the US Census Bureau's Survey of Income and Program Participation, a questionnaire distributed to 43,000 households.
The median wealth of white households is 20 times greater than that of black households and 18 times that of Hispanic households, according to an analysis of newly available government data from 2009 by Pew Research Center, an independent think tank.
That is the largest wealth gap since the data was first collected 25 years ago and is about double the level in the run-up to the 2007-2009 recession.
"Plummeting house values were the principal cause of the recent erosion in household wealth among all groups, with Hispanics hit hardest by the meltdown in the housing market," senior researcher Rakesh Kochhar said in the report, published earlier this week.
The disparity surged from 2005 to 2009 as the housing market's collapse bled equity from homes.
Minority wealth is more concentrated in homes than among whites, which helps explain the widening.
From 2005 to 2009, Hispanic median net wealth shrank by two thirds and blacks' by 53 percent, against a 16 percent drop for whites, Pew said.
More than half the net wealth of Hispanics and blacks is concentrated in homes, compared with 44 percent for whites. Housing prices fell 27.3 percent from the fourth quarter of 2005 to the fourth quarter of 2009, according to the Case-Shiller National home price index.
In 2009, black median household wealth - the sum of assets minus debt - stood at US$5,677, compared with US$6,325 for Hispanics and US$113,149 for whites, the Pew report said.
Blacks and Hispanics lost a greater percentage of wealth than whites in the stock market and mutual funds also.
High long-term unemployment and shrinking incomes, themselves results of the economic slump, may also have contributed to minorities' dramatic dips in wealth.
In June, 16.2 percent of blacks were unemployed, compared with 11.6 percent of Hispanics, and 8.1 percent of whites, according to data from the Bureau of Labor Statistics.
Hispanics saw the largest drop in wealth, in part because many live in the regions of the country hardest hit by the housing bust - Arizona, California, Florida and Nevada.
The Pew analysis is based on data from the US Census Bureau's Survey of Income and Program Participation, a questionnaire distributed to 43,000 households.
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