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Apr 30 - Black, Hispanic Families Lost Most Wealth Under Obama...

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 Apr 30 - Black, Hispanic Families Lost Most Wealth Under Obama...
Unread 2 years agoclass of '13 - away - #1
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Wealth Gap Among Races Has Widened Since Recession

By ANNIE LOWREY

WASHINGTON — Millions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute.

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“It was already dismal,” Darrick Hamilton, a professor at the New School in New York, said of the wealth gap between black and white households. “It got even worse.”

Given the dynamics of the housing recovery and the rebound in the stock market, the wealth gap might still be growing, experts said, further dimming the prospects for economic advancement for current and future generations of Americans from minority groups.

The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth — as measured by a.ssets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances — white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.

The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families.

“The racial wealth gap is deeply rooted in our society,” said Caroline Ratcliffe, one of the authors of the Urban Institute study. “It’s here, it’s not going away, and we need to care about it.”

Many experts consider the wealth gap to be more pernicious than the income gap, as it perpetuates from generation to generation and has a powerful effect on economic security and mobility. Young black people are much less likely than young white people to receive a large sum from their parents or other relatives to pay for college, start a business or make a down payment on a home, for instance. That, in turn, makes their wealth-building prospects shakier as they move into adulthood.

Two major factors helped to widen this wealth gap in recent years. The first is that the housing downturn hit black and Hispanic households harder than it hit white households, in aggregate. Many young Hispanic families, for instance, bought homes as the housing bubble was inflating and reaching its peak, leaving them saddled with heavy debt burdens as house prices plunged in places like suburban Phoenix and inland California.

Black families also were hit disproportionately by the housing collapse, because heading into the recession housing constituted a higher proportion of their wealth than for white families, leaving them more exposed when the market crashed. Higher unemployment rates and lower incomes among blacks left them less able to keep paying their mortgages and more likely to lose their homes, experts said.

Discriminatory lending practices were also a factor. “We know that communities of color, their rate of subprime or predatory loans was twice what it is in the overall population,” said Tom Shapiro, the director of the Institute on a.ssets and Social Policy at Brandeis University.

Black families also suffered bigger hits to their retirement savings, the Urban Institute found. On aggregate, the value of black families’ retirement accounts shrank 35 percent between 2007 and 2010, while white families’ accounts actually gained 9 percent over the same period. With lower earnings and higher unemployment rates leaving them with a thinner safety net to begin with, black families were more likely to take funds out of the market when it was depressed, leaving them out in the cold as the market recovered.

“That reservoir of what you can dig into for emergencies and contingencies is a lot shallower in communities of color,” Professor Shapiro said. “That pushes black families to sling off a.ssets, like I.R.A.’s or stocks, that you might have had another goal in mind for.”

Something similar may be happening as the housing recovery takes hold. “Some people talk about it in terms of a land grab,” said Professor Hamilton of the New School, as mainly white investors are buying foreclosed homes from disproportionately minority owners. “As the housing market starts to appreciate, some of those minority buyers might not be back.”

All in all, Hispanic families lost 44 percent of their wealth between 2007 and 2010, the Urban Institute estimates, and black families lost 31 percent. White families, by comparison, lost 11 percent of their wealth. The economic turbulence worsened a gap that has persisted for as long as social scientists have measured it, and has its roots in institutional racism, they said, which, for instance, prevented black Americans from benefiting fully from the G.I. Bill back in the 1940s and 1950s.

The Urban Institute study looked at mean wealth figures, where a small number of high-net-worth families skews the averages upward. Median wealth figures — where half of households have more wealth and half less — produces lower numbers, but the trends are the same, the Urban Institute researchers said.

Even if blacks and Hispanics make progress in the years ahead as the economy improves, the persistence of the wealth gap has pushed many public policy scholars to recommend the adoption of more ambitious programs to help reduce worsening inequality.

The Urban Institute suggests reforming government policies that encourage savings but disproportionately benefit the already wealthy and families with high incomes, like the home mortgage interest deduction. Automatic savings vehicles also might help lower-income and lower-wealth families start saving, it said.

Professor Hamilton has proposed “baby bonds,” granting savings accounts to infants, seeded with funds that allocate greater sums to families with less wealth. (Such accounts would be race-blind, Professor Hamilton emphasized.) Accountholders could tap that money as young adults, to pay for college or start a business. “That’s really going to break the link of intergenerational poverty, and the intergenerational wealth gap,” Professor Hamilton argued.

But in the absence of such far-reaching measures, scholars and advocates remain generally pessimistic that the wealth gap will narrow even as members of minority groups increase their share of the American work force.

“The growth in the wealth divide is going to be very hard to close,” said Dedrick Muhammad, the senior director of the economic department at the National a.ssociation for the Advancement of Colored People, the civil rights organization. “I don’t have a positive feeling about racial wealth inequality resolving itself with the recovery.”

http://www.nytimes.com/20... recession.html
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21 comments for "Apr 30 - Black, Hispanic Families Lost Most Wealth Under Obama..."

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Unread 2 years agoclass of '13 - away - #2
Ladklap 436 heat pts436 space
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I think this explains alot...
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Unread 2 years agoclass of '13 - away - #3
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Blood Edge said:
Don't they lose the most during any economic period? African American families as a group have been losing since integration.

It would be interesting if they compared African immigrants to African Americans though.
Yeah it would be interesting...
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Unread 2 years agoclass of '10 - on now - #4
Account001  space
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Naw... Africans are doing better and Idk if they still do it, but immigrants get a lot of tax breaks.

Also to be an immigrant to the US you either gotta get lucky and/or have money in your own country so they usually come over above the poverty level
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Unread 2 years agoclass of '04 - away - #5
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Matt504 said:
Black people in America are headed towards becoming a permanent underclass.



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Unread 2 years agoclass of '10 - on now - #6
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And i dont agree with alot of points dude makes in the vid... and in america they do look at how much money you make for class determination. Also everybody identifies themselves with the things the buy as well as buy new sh*t when it comes out.

I do agree that blacks spend too much money on sh*t they shouldnt even want.
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Unread 2 years agoclass of '11 - away - #7
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Unread 2 years agoclass of '08 - away - #8
DrX 56 heat pts56 space
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ppl always try to push their bs political bs....the reality is....blks are fu*ked economically



blks don't owned nothing
blks buy valueless sh*t
blks want to be employees rather than bosses
blks like to be consumers rather than owners
i can go on for days


most blks are slaves still mentally
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Unread 2 years agoclass of '08 - away - #9
foestacks 11 heat pts11 space
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THE GAWD
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WE STILL LIVIN THOUGH
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Unread 2 years agoclass of '08 - away - #10
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davilla24c said:
WE STILL LIVIN THOUGH
yeah living like fools and suckers
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Unread 2 years agoclass of '08 - away - #11
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DrX said:
yeah living like fools and suckers

speak for yourself
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Unread 2 years agoclass of '10 - away - #12
zaneduson 7 heat pts space
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looking at that first graph....i think how much money we DONT HAVE compared to whites is the REAL issue here...
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Unread 2 years agoclass of '10 - away - #13
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Account001 said:
Naw... Africans are doing better and Idk if they still do it, but immigrants get a lot of tax breaks.

Also to be an immigrant to the US you either gotta get lucky and/or have money in your own country so they usually come over above the poverty level
This if you don't have money it is very difficult to come to th US
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Unread 2 years agoclass of '04 - away - #14
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zaneduson said:
looking at that first graph....i think how much money we DONT HAVE compared to whites is the REAL issue here...
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Unread 2 years agoclass of '06 - away - #15
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DrX said:
ppl always try to push their bs political bs....the reality is....blks are fu*ked economically



blks don't owned nothing
blks buy valueless sh*t
blks want to be employees rather than bosses
blks like to be consumers rather than owners
i can go on for days


most blks are slaves still mentally
All by design.
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Unread 2 years agoclass of '05 - away - #16
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hood135 said:
All by design.
yet they are still stuck in it
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Unread 2 years agoclass of '11 - away - #17
whouthinkitis 11 heat pts11 space
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BtMkRs said:


Dude is telling the truth but stupid a.ss black folks ain't trying to hear this and the first video that was posted in this thread. It's a shame how far black folks have fallen and how far we have to go.
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Unread 2 years agoclass of '10 - away - #18
Hovi Bryant 263 heat pts263 space
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Personal wealth is more of a personal issue than something you can blame someone for.

The death of the middle class and stagnation of our incomes is.

And this has been the elephant in the room since Reagan.
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Unread 2 years agoclass of '06 - away - #19
hood135 2 heat pts space
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dg177bx said:
yet they are still stuck in it
Kind of hard to win a chess game when you're playing checkers.
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Unread 2 years agoclass of '13 - away - #20
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hood135 said:
Kind of hard to win a chess game when you're playing checkers.
This.
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