Racial, ethnic wealth gap widens, report says
NEW YORK - The wealth gap between blacks and Hispanics and whites has continued to increase in the midst of the economic recovery, according to a report by the Pew Research Center that was released Friday.
The report, which analyzed data from the Survey of Consumer Finances from the Federal Reserve, says the median net worth of white households in 2013 was $141,900, about 13 times that of black households at $11,000.
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In 2007, when the recession began in the United States, the median net worth of white households was $192,500, or 10 times that of black households at $19,200.
For Hispanics the numbers are similar, albeit slightly higher, than those for blacks. In 2007, the median net worth of a Hispanic household was $23,600, and in 2013 it was $13,700.
'The gaps are big and they are also persistent,' said Rakesh Kochhar, associate director for research at Pew's Hispanic Trends Project and one of the report authors. In the last 30 years, net worth for white American households has hovered around $100,000, or between 6 to 8 times higher than net worth for blacks, he said.
Wealth is defined as the value of an accumulated sum of assets that could include income, financial products like stocks and bonds, retirement accounts, or real estate subtracted from the debt that is owed against those assets.
It is built up over time and tends to increase with age, Kochhar said. This in part explains the widening racial gap, because blacks tend to earn less than whites and have fewer assets than whites do to pass on to future generations.
According to the Federal Reserve data, the median income of black and Hispanic households fell 9 percent from 2010 to 2013, compared with 1 percent for whites. Home ownership, also a factor in the creation of wealth, fell 6.5 percent for black and Hispanic households from 2010 to 2013, compared with 2 percent for whites.
A 'legacy of discrimination,' including lower levels of education and depressed property values in certain communities, has played a role in the widening wealth gap, Kochhar said.
A slight increase in net worth of Hispanics over blacks can partly be explained by geography, he said.
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