Although Asians have made progress in median household income since 1989, Hispanics and blacks still trail badly. A new report looks at the challenges.
First, the good news. A study of household finances by the Federal Reserve Bank of St. Louis finds that Asian median family wealth increased from $64,165 to $91,440 from 1989 to 2013 in inflation-adjusted dollars.
And the sober news, which reflects overall wage stagnation and the effects of recessions: During the same period, the median wealth of white families (assets minus liabilities) rose only $3,906 to $134,008.
Then the kick-in-the-teeth. For Hispanics, inflation-adjusted wealth rose from $9,229 to $13,900. And for black families the numbers were $7,736 and $11,184 for 1989 and 2013 respectively.
Many people suspect these disparities intuitively and studies capture them as snapshots. This new report tracks the consequences of wealth inequality over many years.
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Although median income for Hispanics and blacks was 40 percent lower than whites, median wealth was 90 percent lower.
Interestingly, the report says age and education play a relatively small role in explaining the difference. It does point to stronger balance sheets on the parts of whites and Asians.
Researchers should pay more attention to intergenerational wealth. In the case of many black families, they were prevented from accumulating it by a century of Jim Crow in the South and de facto discrimination in many other places, exclusion from well-paying jobs and events such as the Tulsa riot aimed at the black middle class. Black workers were disproportionately hurt by movement of employment centers out of cities and lack of public transit.
Hispanics have their own intergenerational wealth challenges. In addition, they have become a much larger cohort at a time when good middle-class jobs, and the pathways up to them, have disappeared.
You can find the entire report here.
Today’s Econ Haiku:
Cars are out of style
But bikes won’t move Seattle
Build a subway, dig?
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