Wealth is also an area where we see especially large racial gaps, between whites and blacks in particular. (For extensive background on this, see Black Wealth/White Wealth, by Melvin Oliver and Thomas Shapiro, and Being Black, Living in the Red, by Dalton Conley.) And the recession has exacerbated wealth gaps between races, as a Pew analysis of newly available 2009 data shows:
The Pew Research analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.
As a result of these declines, the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149.
In addition to the decreased median, many more households now have zero or negative net worth:
Overall, 20% of U.S. households were in this position in 2009, up from 15% in 2005. The share of households with zero or negative net worth is much higher among Hispanics and blacks. About one-third of Hispanics (31%) and blacks (35%) had no wealth or were in debt in 2009, compared with 15% of whites.
The increase in the share of households with zero or negative net worth from 2005 to 2009 was greatest among minority households. It increased from 23% to 31% for Hispanics, from 12% to 19% for Asians, and from 29% to 35% for blacks. The change was more modest for white households, with the share climbing from 11% to 15%.
Non-white households are more dependent on their homes as a source of wealth, and Hispanic and Asian households were hit particularly hard by the housing collapse for geographic reasons:
In 2005, more than two-in-five of the nation’s Hispanic and Asian households resided in Arizona, California, Florida, Michigan and Nevada, the five states with the steepest declines in home prices. By contrast, only about one-in-five of the nation’s white or black households resided in these states.
Pew offers much, much more in the way of statistics showing both how badly median wealth has declined overall and the enormous racial disparities in household wealth and in the effects of the recession on the household wealth of different racial groups. The declining median income we saw in yesterday's Census report is a factor in declining wealth, of course, since it's a lot harder to save money or buy a home if your income is going down. But declines in wealth are about more than that—they represent people losing what they had, whether due to unemployment, the housing market in their area crashing, the stock market on which their retirement accounts depended crashing, or other economic factors beyond their control.