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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.
Worse, 35% of African Americans and 31% of Hispanics reported zero or negative net worth in 2009. By contrast, only 15% of white households were in the same boat.
Pew implies that black and Latino households have less investment savings in vehicles like 401(k) plans and individual retirement accounts than white households, and thus didn’t benefit from a bounce back in the U.S. stock market starting in 2009. In addition, black and Latino households relied more on unsecured debt (like credit cards) than did white households, further widening the wealth gap.
Also, blacks and Hispanics are more likely to live in concentrated areas where housing values declined more sharply, contributing to further wealth reductions, Pew says.
It’s not a pretty picture, and it’s not a trend that should turn around soon. Until the jobs picture improves and the housing market rebounds, the U.S. has not only a government debt-gap problem but also a demographic wealth-gap problem.
And a big one, at that.
Brian O’Connell is a Doylestown, Pa.-based freelance writer with 15 years’ experience covering business news and trends, particularly in the financial, health care and career-management sectors. A former Wall Street bond trader and the author of 14 books, O’Connell has written for dozens of national business publications, including the Wall Street Journal, CNBC, TheStreet.com, Yahoo! Finance and CBS Marketwatch.
Read more: http://moneyland.time.com/2011/07/26...#ixzz1TGzT2s3c
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.
Worse, 35% of African Americans and 31% of Hispanics reported zero or negative net worth in 2009. By contrast, only 15% of white households were in the same boat.
Pew implies that black and Latino households have less investment savings in vehicles like 401(k) plans and individual retirement accounts than white households, and thus didn’t benefit from a bounce back in the U.S. stock market starting in 2009. In addition, black and Latino households relied more on unsecured debt (like credit cards) than did white households, further widening the wealth gap.
Also, blacks and Hispanics are more likely to live in concentrated areas where housing values declined more sharply, contributing to further wealth reductions, Pew says.
It’s not a pretty picture, and it’s not a trend that should turn around soon. Until the jobs picture improves and the housing market rebounds, the U.S. has not only a government debt-gap problem but also a demographic wealth-gap problem.
And a big one, at that.
Brian O’Connell is a Doylestown, Pa.-based freelance writer with 15 years’ experience covering business news and trends, particularly in the financial, health care and career-management sectors. A former Wall Street bond trader and the author of 14 books, O’Connell has written for dozens of national business publications, including the Wall Street Journal, CNBC, TheStreet.com, Yahoo! Finance and CBS Marketwatch.
Read more: http://moneyland.time.com/2011/07/26...#ixzz1TGzT2s3c
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