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wealth by race chart
We tend to talk less about wealth than income, but wealth is a crucial part of economic well-being. That's especially true in a recession and housing collapse: Do you have savings to get you through a period of unemployment? Does a house that's lost a huge part of its value represent your only significant asset?

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.

Originally posted to Daily Kos Labor on Wed Sep 14, 2011 at 08:54 AM PDT.

Also republished by A Fighting Chance and Daily Kos.

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Comment Preferences

  •  C'mon, job creators, save us! (4+ / 0-)
    Recommended by:
    Kinak, annieli, shoeless, nailbender

    The top 1% needs another tax break!

  •  An important post. (4+ / 0-)

    Glad you wrote it.

    The American people must wise up and rise up!

    by TomP on Wed Sep 14, 2011 at 09:00:54 AM PDT

  •  Just read about this in a local Argentine paper. (4+ / 0-)
    Recommended by:
    TomP, wishingwell, Marie, Utahrd

    It was interesting to read their understanding of our problem and then compare our numbers to their own.

    Our poverty rate is higher than that of Argentina though the rate at which poverty begins is very different - about $22,000 per family of 4 in the US and about $3500 per family of four in Argentina. No wonder folks in South America all think we are rich even when we are poor.

    •  Its MUCH more expensive to live in America. (2+ / 0-)
      Recommended by:
      montressor, Utahrd

      people seem to forget this.

      Republicans HATE America. Deal with it. / It's the PLUTONOMY, Stupid!

      by xxdr zombiexx on Wed Sep 14, 2011 at 09:50:45 AM PDT

      [ Parent ]

      •  It's also expensive to live like Americans in Arg (1+ / 0-)
        Recommended by:
        Utahrd

        in Argentina.

        Two cars, detached single family homes are unheard of in Argentina for the middle class.

        •  But not for the upper middle class... (0+ / 0-)

          my boys go to a private school here - not super rich but not lower middle class.

          The assumptions they make about Americans are amazing. They really do think we are all rich.

          They think the only poor people in their own country are immigrants.

          In many ways, they are not unlike a lot of Americans I know.

      •  It is not MUCH more... (0+ / 0-)

        the cost of living is different. That is a different think all together, really.

        Food here is cheaper but it costs the average person a lot more to buy it.

        The irony is that our poor people in America are rich compared to some other nations. I don't think that makes it right, by far. But it gives us a lot to talk about if we are concerned about worldwide poverty and how to overcome it.

        •  Food here is cheaper (0+ / 0-)

          but it costs the average person a lot more to buy it.

          ERGO - it's MORE expensive to live in America.

          People with some means probably don't see it the same way as those without that same "not lower middle class" socioeconomic status.

          Republicans HATE America. Deal with it. / It's the PLUTONOMY, Stupid!

          by xxdr zombiexx on Wed Sep 14, 2011 at 12:39:57 PM PDT

          [ Parent ]

          •  I think the average Argentine spends more (0+ / 0-)

            of their salary on the basics of living - shelter, clothing, and food than an American does but I have no facts or figures to back me up.

            I am not sure how economists do an analysis comparing such things between two countries. It would be interesting to see and not only because I am living here right now and see the poverty everyday.

            I may have to do some homework and write a diary :)

  •  But but the job creators .... (4+ / 0-)
    Recommended by:
    Kinak, wishingwell, annieli, shoeless

    "Rick Perry talks a lot and he's not very bright. And that's a combination I like in Republicans." --- James Carville

    by LaurenMonica on Wed Sep 14, 2011 at 09:02:50 AM PDT

  •  You Don't Want to Talk About Wealth on a Democratc (3+ / 0-)
    Recommended by:
    TomP, Marie, WheninRome

    electoral based forum.

    Since Disco it's been a HELL of an embarrassment.

    Image Hosted by ImageShack.us

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Wed Sep 14, 2011 at 09:05:11 AM PDT

  •  These Reports (6+ / 0-)

    Are clearly showing the failure of free market capitalism, i.e. ronnynomics, as well as the already well known tax cuts to the 'job creators' don't create jobs, and didn't since bush got them rubber stamped, one of the things that kept it afloat was the constant changing of the credit scheme's making people feel they had more then they actually did!

    The downfall didn't just happen in the last couple of years but over the long haul starting long before this recession and collapse, in construction that was slowing down a couple of years before the housing bubble burst, across the board, industrial, commercial and residential. And you can find other show of same in other industries and businesses.

    The facts now coming show that folks have exhausted the avenues of help, extended unemployment etc., and are exhausting, or have already, any savings they had, even if finding a job they are now living check to check and unable to save.

    The once capitalist system is no longer, the wealthy now have what they've always wanted, total control, and the wealth to maintain at least for awhile. But by destroying what we had once built they too will fall and when they do it'll be extremely fast, they think the growing world populations can maintain their great wealth, boy are they in for a big surprise!!!!

    CCR:"If you're a torturer, be careful in your travel plans. It's a slow process for accountability, but we keep going."

    by jimstaro on Wed Sep 14, 2011 at 09:09:47 AM PDT

  •  GOP.....Can't make an omelette without breaking (3+ / 0-)
    Recommended by:
    shoeless, xxdr zombiexx, Kinak

    a few backs.

  •  Another Grim Report (1+ / 0-)
    Recommended by:
    Kinak

    Mike at Rortybomb:

    Why don’t we mass refinance student loans in the same way there is talk about doing a mass refinancing of houses?  Like housing refis, there are significant advantages.  We certainly could use some more channels for monetary policy to run through, as rates are at record lows.  People struggling to make their student loan payments are in places where there is a lot of unemployment, so it is well targeted.  And most crucial is that a refinancing of this would be felt by the person as a permanent increase in income; as such they’d have a high propensity to spend it, which is the best kind of stimulus.
    ...

    He has the graphs and charts.

  •  question about net worth (1+ / 0-)
    Recommended by:
    Kinak

    Does it include money in retirement savings such as a 401K?

  •  Good lord (3+ / 0-)
    Recommended by:
    ItsSimpleSimon, Kinak, greendem

    That's one of the most shocking graphs I've ever seen.  Nevermind the change between 2005 and 2009.  The disparity is unreal.

    To believe that markets determine value is to believe that milk comes from plastic bottles. Bromley (1985)

    by sneakers563 on Wed Sep 14, 2011 at 09:39:56 AM PDT

  •  more Judge Craters than Job Creators /nt (0+ / 0-)

    I am off my metas! Präsidentenelf-maßschach; Warning-Some Snark Above"Nous sommes un groupuscule" (-9.50; -7.03)

    by annieli on Wed Sep 14, 2011 at 09:41:59 AM PDT

  •  Worth noting the components of wealth (1+ / 0-)
    Recommended by:
    Kinak

    which, when understood makes this all the more stark.

    Assets
    •  Financial institution accounts
    o  Savings accounts
    o  Money market deposit accounts
    o  Certificates of deposit (CD)

    o  Interest-earning checking accounts
    o  Regular checking accounts
    •  Other interest-earnings assets
    o  U.S. government securities
    o  Municipal or corporate bonds
    o  U.S. savings bonds
    •  Stocks and mutual fund shares
    •  Business or profession
    •  Motor vehicles
    •  Owned home
    •  Rental property
    •  Vacation homes and other real estate
    •  IRA and Keogh accounts
    •  401(k) and Thrift Saving Plans
    •  Mortgages held for sale of real estate
    •  Amount due from sale of business or property
    •  Other financial assets

    Liabilities
    •  Secured liabilities      
    o  Margin and broker accounts
    o  Debt on business or profession  
    o  Vehicle loans      
    o  Mortgages on own home    
    o  Mortgages on rental property
    o  Mortgages on other homes or real estate
    •  Unsecured liabilities      
    o  Credit card and store bills  
    o  Student loans      
    o  Doctor, dentist, hospital, and nursing home bills
    o  Loans from individuals    
    o  Loans from financial institutions  
    o  Other unsecured liabilities

    Major assets not captured by SIPP are equities in defined-benefit pension
    plans, the cash value of life insurance policies, the value of household
    furnishings and jewelry, and future claims on Social Security. Thus,
    wealth estimates from SIPP are typically less than the estimates from the
    Survey of Consumer Finances.

    Those groups with declining net wealth are not merely up against it today, they are in all likelihood facing bleak retirement.

    Why am I sure of this?

    Because they do not have available to them the volume of long-term savings for retirement that constitute one of the core components of the wealthier.

    Now consider just how at risk these populations are should pain be inflicted through changes to Social Security, Medicare, Medicaid.

    Rick Perry executed a man ... just to watch him die

    by ItsSimpleSimon on Wed Sep 14, 2011 at 09:49:56 AM PDT

  •  I am white and have close to ZERO wealth (3+ / 0-)

    $80 in the bank today but the mortgage paid, other bills up to date and some food in the house (OK...I eat really well).

    I have a car I want to sell and an old truck (1995) to repair and drive for a couple more years.

    The house HAS lost significant value but I still owe less than it's worth, several dollars, even.

    I'm 51, have a master's degree and a professional license and still have never broken $50k/year. I have worked hard and EVEN PASSED DRUG TESTS but I cannot seem to do more than live check to check.

    I delivered pizza to the wealthy and that often left me with the "where have I gone wrong?" meme in my head.

    Republicans HATE America. Deal with it. / It's the PLUTONOMY, Stupid!

    by xxdr zombiexx on Wed Sep 14, 2011 at 09:50:03 AM PDT

    •  "Wealth" (0+ / 0-)

      Don't feel bad, I have a full-time job + mandatory overtime and make a lot less than half of what that average is.  Thank god for midwest low-cost-of-living landlocked shitholes.  

      It's amusing that even the words we use have shifted to the right along with the mainstream political culture and the word "wealth" is now used to describe any amount of money.  I only have $500 that I will need to pay rent and buy food.  Do I feel like I have wealth or am wealthy?  Hell no.

    •  White, 42, B.A. and M.Ed., $39K in the hole (0+ / 0-)

      thanks to a student loan taken out for a second career that didn't pan out. There's a good chance that I will never have a net worth above zero.

      I can't help but think that in the minds of the Banana Republicans, this means I will never have a net worth above zero. If you know what I mean.

      And if the Blue Sky Mining Company won't come to my rescue, if the sugar refining company won't save me, who's gonna save me?

      by Geenius at Wrok on Wed Sep 14, 2011 at 11:22:59 AM PDT

      [ Parent ]

  •  Kind of like that Census.gov poverty report (1+ / 0-)
    Recommended by:
    guinea

    One thing that struck me about that census.gov poverty report that came out yesterday is the low rates of poverty in mining and farming states.  Which also in some cases are states with less-than-diverse populations.

    High mineral prices, oil prices and commodity prices have meant low rates of poverty for places like Wyoming, Utah and Nebraska.  But New Hampshire also has a low rate of poverty?  Well, if I lived back east; I would spend all my money skiing there.

    The Grio:  Blacks should move to the Boondocks.

    •  Those states have less than 6M (0+ / 0-)

      people combined [NB, WY & UT]. I'm sure they're all in the pot for homeland security funds and other monies that flow from the Federal Gov't and which is distributed at a larger per capita rate than among the more populous states.

      There must be some correlation to winter climate going on, although Michigan comes to mind. It's expensive to survive the cold. I don't know what New Hampshire has going on with it. Can't be the huge maple syrup industry.

      •  New Hampshire has zero state income taxes (1+ / 0-)
        Recommended by:
        Utahrd

        and zero sales taxes.  They don't even have trash collectors in many of their towns.  It's all privatized.

      •  National Parks, Native American areas (0+ / 0-)

        There was an article recently about how Flaming Gorge Dam, a good 3 hours away from the nearest international airport gets Homeland Security money.  Technically, I suppose someone could blow it up and flood the Uintah/Ouray reservation downstream.

        Wyoming & Utah have national parks, lots of miles of Interstates, a few military bases and several Native American reservations.

        We also have to spend money here to imprison that noted threat to national security, Tim DeChristopher.  Dick Cheney is a free man but Tim DeChristopher is headed to a federal prison?

  •  Sure, let's privitize (3+ / 0-)
    Recommended by:
    WheninRome, Kinak, greendem

    social security and health care.

    It's working so well for savings, housing and other "wealth-building" activities.

    With these median levels - more than 1/2 the country cannot retire, cannot get sick, cannot invest in anything to make it better (education, new business start up, even  moving to get a job out of town).

    why I'm a Democrat - Isaiah 58:6-12, Matthew 25:31-46

    by marking time on Wed Sep 14, 2011 at 10:03:34 AM PDT

  •  Shocking, especially with the % drops (1+ / 0-)
    Recommended by:
    Kinak

    in the black and hispanic communities.

    Not surprising, but shocking.

    Justified anger does not grant you unrestricted license.

    by GoGoGoEverton on Wed Sep 14, 2011 at 10:06:39 AM PDT

  •  Hmmm... (2+ / 0-)
    Recommended by:
    guinea, Geenius at Wrok

    According to the graph posted yesterday, the income between the two groups shows that Black and Hispanic income is about half of white median income (with Asians making more than anyone). About a 2:1 ratio.

    And yet the "wealth" disparity is closer to 15:1.

    It's pretty obvious that we need basic financial education in every school along with deep structural reform or public programs to create more opportunities for Black and Hispanic Americans to accrue wealth. There's no good reason the ratio should go from 2:1 to 15:1 when comparing median income to wealth, and it's bad for society and the economy to have people with only a month's worth of savings.

    And a quick note: Asians will likely regain their status as most wealthy racial group sometime  in the near future as prices reinflate and the new immigrants from Asia accrue wealth. In any case, I don't know why Pew didn't include them in the graph, as it reinforces the idea that Asian-Americans are somehow in the "other" category of American racial life.

    it fitfully blows, half conceals, half discloses

    by Addison on Wed Sep 14, 2011 at 10:15:03 AM PDT

    •  Having an intact nuclear family would have helped (2+ / 0-)
      Recommended by:
      Utahrd, Geenius at Wrok

      also.  I guess that could go into basic financial education as well.

      •  I agree... (0+ / 0-)

        ...and there are many reforms and programs that could assist there.

        States and municipalities creating or zoning for low-income housing that is more accessible and better-suited for families, ending the "War on Drugs", and obviously the development of jobs that pay salaries capable of supporting a family, would all be good steps allowing Blacks and Hispanics with low net financial worth to accrue wealth more quickly. There are many more such steps.

        This all goes for groups of Whites and Asians in poverty as well, of course (Native Americans have a slightly different set of problems vis-a-vis net worth, it seems to me).

        it fitfully blows, half conceals, half discloses

        by Addison on Wed Sep 14, 2011 at 10:33:03 AM PDT

        [ Parent ]

    •  Wealth disparities have been greater (0+ / 0-)

      than income disparities for quite some time, and for a lot of deep-seated historical and structural reasons. The books I mentioned go into that in depth.

      You're right about Asians -- their drop is due both to housing losses based on the geographic distributions I did mention and to the fact that there have been enough new immigrants who've yet to get a real toehold to affect the wealth rates for the entire demographic.

      Good question about the graph.  Sometimes Asians are left off time series graphs because they only started being tracked relatively recently, but obviously it was longer ago than 2005, so I don't know.

      •  Also, don't forget the estate tax (0+ / 0-)

        Every reduction in the estate tax widens the gap between the offspring of the luxury class and the offspring of the poor. Inherited wealth is capital that can be used to generate even greater wealth. Inherited poverty just makes everything cost more.

        And if the Blue Sky Mining Company won't come to my rescue, if the sugar refining company won't save me, who's gonna save me?

        by Geenius at Wrok on Wed Sep 14, 2011 at 11:26:00 AM PDT

        [ Parent ]

      •  Right... (1+ / 0-)
        Recommended by:
        Laura Clawson

        ...the disparity has been there for a LONG time (was there ever, historically, not this income/wealth disparity?). And that's exactly why I made, and you make, and policy advocates should make the case for deep structural reforms and public programs. It is apparently not enough to say "work harder", there's something more going on there in terms of ability to accrue wealth.

        And yeah, my quick note on Asian-Americans was offered after reading the Pew report. For a number of reasons Asian-Americans immigrants are more likely that average to accrue wealth quickly (they often come to work in an already established family business or in a high-tech/academic field, they are more educated upon arrival than other immigrant groups and even native Americans, etc).

        As far as the graph, in this situation I really do feel like Pew as an organization is still treating Asian-Americans as a marginal phenomenon not important enough to represent in a graphic about wealth and race in America. I could be wrong. At least they made it into the textual analysis.

        it fitfully blows, half conceals, half discloses

        by Addison on Wed Sep 14, 2011 at 11:39:15 AM PDT

        [ Parent ]

  •  Most of the wealth was in home equity. (1+ / 0-)
    Recommended by:
    greendem

    Many of the minorities had very little equity put into their homes and now that prices are underwater, much of that equity was also wiped out.  

    Whereas many of the white Boomers had paid off their homes, so the decline in home prices do not affect them as much, and in fact only lowered their property tax burdens.   Also white people were more likely to work for jobs that offered 401ks (which while down is still 40% above the 2009 lows).

  •  Of course it affect minority households more (2+ / 0-)
    Recommended by:
    greendem, Geenius at Wrok

    They were the targets of the predatory lending and credit practices that took place over the past decade.

    "Now watch what you say or they'll be calling you a radical, a liberal, a fanatical criminal" -- Logical Song -- Rick Davies & Roger Hodgson

    by Over50Lib on Wed Sep 14, 2011 at 10:23:10 AM PDT

  •  Wonder what MEAN net worth is (1+ / 0-)
    Recommended by:
    Geenius at Wrok

    Median net worth means that there are an equal number of persons under and over that amount.  It is not AVERAGE (or the MEAN) net worth which is if you took the total of ALL net worth and divided it by the number of persons.  With the income disparity we are experiencing,  the MEAN amount is probably MUCH higher for whites in that they most likely represent a disproportional amount of the super rich.

    In a perfect bell curve, the Median, Mean and Mode (amount with the most occurrences) are all the same.  The bell curve is "skewed" left or right depending where the extremes in amounts are encountered.

    "Now watch what you say or they'll be calling you a radical, a liberal, a fanatical criminal" -- Logical Song -- Rick Davies & Roger Hodgson

    by Over50Lib on Wed Sep 14, 2011 at 10:35:13 AM PDT

  •  Black and Hispanic average net worth (2+ / 0-)
    Recommended by:
    greendem, Geenius at Wrok

    is literally down to a couple of middle-income paychecks. That's a very sad statement on where we are as a nation.

  •  Where is the Obama Anti-poverty campaign? (1+ / 0-)
    Recommended by:
    Geenius at Wrok

    I hear zero, zip, from this administration about getting Americans out of poverty.

    Is that really considered too radical to talk about in Tea Party America?

  •  The Plan Is Working But Not The Plan That (0+ / 0-)

    the American philosophy is compliant with.

    The Wall Street Journal says we are a plutonomy which means that jobs will be created when the 1-2% wealth want them created.

    But by no means before that.

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