Although the recession is technically over, the wealth gap between whites and minorities has continued to grow. A recent study, conducted by Pew Research Center, suggests that white Americans are indeed experiencing economic recovery. However, in stark contrast, minority households continue to struggle. As the difference becomes more apparent, the United States wealth gap is nearing record levels.
For the purpose of the study, household wealth is defined as “the difference between the values of… assets and liabilities.” Although the researchers define minorities as “blacks, Hispanics and other non-whites,” the data provided in the public report was limited to black, Hispanic, and white households.
In 2013, the median household wealth in white families rose to $141,900. As outlined by Pew Research, the median wealth for Hispanic households fell to $13,700. Black households fell to $11,000.
Citing data provided by the Federal Reserve, the researchers explained that several factors have contributed to the widening gap.
Throughout the recession, both white and minority households lost key assets, including real estate, retirement funds, savings accounts, and stocks. However, the data suggests “the decrease in asset ownership tended to be proportionally greater among minority households.” As many white households maintained at least a portion of their assets, it was easier to recover once the recession was over.
The research suggests income is another contributing factor in the wealth gap between whites and minorities. As noted by the Federal Reserve, white households lost an estimated one percent of their income between 2010 and 2013, while minority households lost an estimated nine percent. With less income, minorities simply cannot replenish what they lost during the recession.
Although the wealth gap between whites and minorities has continued to grow, it has not surpassed the record set in 1989. However, the gap has reached its highest point in more than 20 years.
In 2007, when the recession began, white households’ average net worth was 10 times more than black households. Over the next six years, the gap widened to 13 percent.
Rakesh Kochhar, who co-authored the study, blames a “legacy of discrimination” for the widening wealth gap. As reported by the New York Times, he suggested several issues that may be contributing the issue.
“… lower levels of education and depressed property values in certain minority communities, has played a role in the widening wealth gap… A slight increase in net worth of Hispanics over blacks can partly be explained by geography… Hispanics are more concentrated in states with higher home values… blacks may own homes in Southern states with lower home values… “
Although the report cites several contributing factors, the researcher do not offer a solution to the increasing wealth gap between whites and minorities.
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