Wealth In America: Whites-Minorities Gap Is Now A Chasm

As Congress and the White House wrestle whether to raise taxes for the wealthiest Americans, a new analysis of Census data shows that the wealth gaps between whites and blacks and Hispanics widened dramatically during the recession.

The analysis by the Pew Research Center, released on Tuesday, found that from 2005 to 2009, inflation-adjusted median wealth fell 66 percent among Hispanic households and 53 percent among black households, compared with a 16 percent decline among white households.

Those declines increased the wealth gap between white and minority households to the largest since the census began collecting such data in 1984. The ratio of wealth for whites to blacks, for instance, is now roughly 20 to 1, compared to 12 to 1 in the first survey 25 years ago and 7 to 1 in 1995, when a booming economy lifted many low-income Americans into the middle class.

The wealth ratio for whites to Hispanics was 18 to 1 in 2009, also up from 7 to 1 in 1995, the Pew analysis found.

The declines from the recession left the median black household with $5,677 in wealth (assets minus debts, where assets include items like a car, a home, savings, retirement funds, etc.) and the typical Hispanic household with $6,325. White households, by comparison, had $113,149, the study found.

Sliced another way, the data from the Census Bureau’s Survey of Income and Program Participation (SIPP), showed that 35 percent of black households and 31 percent of Hispanic households had zero or negative net worth in 2009. The comparable rate for white households was 15 percent.

The SIPP income questionnaire is considered to provide the most comprehensive snapshot of household wealth by race and ethnicity.

The Pew analysis said the housing crisis was largely to blame for the widening gulf. The median level of home equity held by Hispanic homeowners declined by half from 2005 to 2009, from $99,983 to $49,145 it found. By comparison, white homeowners saw their median equity decline from $115,364 in 2005 to $95,000 in 2009. Black homeowners’ median equity fell from $76,910 to $59,000 over the same period.

The study said the sharper decline among Hispanics happened because a large share of Hispanics live in California, Florida, Nevada and Arizona, which were among the states hardest hit by the housing crisis.

Other studies have noted that blacks and Hispanics lost so much more home equity because they were far more likely to be sold a high-cost, sub-prime loan, regardless of their credit histories. Those mortgages now have the highest foreclosure rates.

It also noted that because whites are more heavily invested in the recovering stock market than blacks or Hispanics, the former had recovered a higher percentage of the wealth lost to the recession.

National Urban League President and CEO Marc Morial called the report a “wake-up call” that minority communities need more investment in long-term job creation.

"A paramount issue for this nation for the 21st century is to ensure the narrowing and closing of the racial wealth gap," Morial told the Associated Press on Tuesday, a day before the National Urban League opens its annual convention in Boston. "It has deep social implications. It has deep political implications."

In Washington, the wealth gap has been a major point of friction in talks about raising the debt ceiling and putting the nation on sounder fiscal footing. President Barack Obama and Democrats have sought a variety of ways to increase revenue, all aimed at those in the upper income bracket.

The president has proposed closing loopholes in the tax code, such as breaks for owners of private jets and for oil companies as well as higher income tax rates on wealthier individuals and families. Republicans have made resistance to any tax increases a focal point in the debate, arguing that raising taxes in a recession is an impediment to creating jobs. Neither plan currently under consideration contains any tax increases.

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  • by Greenville Pirate Location: Greenville, NC on Jul 27, 2011 at 07:14 PM
    Some of these posts are interesting...Thinking about it...there are a lot of successful Blacks in America...Michael Jordan, Obama, Jay-Z and Beyonce just to name a few, which are from all walks of life. I don't see them talking about slavery and having a hard life because of what the WHITE people did to them. They WORKED for what they have and what they have ACCOMPLISHED with their lives. You don't see them trying to get handouts. The main thing here is you need to WORK for what you deserve. Only YOU are responsible for YOU! If you want to get somewhere in life you need to WORK for it. So did Michael Jordan, Obama, Jay-Z and Beyonce get where they are today because their parents were rich and they were just GIVEN things to make it in this world? NO! Did they sit around on their butt collecting from the Government? NO! So get off your lazy butt, put on your BIG BOY pants and get a J-O-B.
  • by ex republican on Jul 27, 2011 at 02:17 PM
    “It all boils down to this according to the Right Wing leaders and followers: 1.) Get rid of all federal legislatio­­n regarding anything that interferes with companies making money for; this especially includes anything related to the FLSA (minimum wages, overtime laws, child workers), OSHA, the EPA, etc. 2.) We will return to the pre-indust­­rial revolution economic and labor state; possibly even return to the economic system of the middle ages consisting of fiefs. 3.) There will be no middle class- all workers will revert to being serfs to aristocrat­­s or will we will all become slave laborers like in China. (Isn't this one argument righties have- that the U.S. companies are forced to move to other countries because they can not compete here?) 4.) Anyone who does not conform to their ideology, gender guidelines­­, race, religion or sexual preference­­s are relegated to the bottom of society. Women will not have access to any birth control (like in the 19th century) and all but a select few will be disenfranc­­hised. 5.) Anyone who is poor, disabled, elderly or unemployed will have to beg on the streets. 6.) Only the rich will have access to health care; to everyone else it will be too bad if you get sick. 7.) Anyone that's does not survive the system that will also be too bad. We (the righties) have faith in social-Darwinism.”
  • by looking out for the rich on Jul 27, 2011 at 02:09 PM
    For many years in Calif we got paid over time for working more than 8 hours in a day. A few years ago the republican­s took control, the first thing they did was to remove this law. We had to work 40 hours in a week. The company I worked for changed our hours so we would not get paid any over time. 10 hour days, 4 days a week, staggered work shifts. 2 years later we threw out the Read More... republican­s over this. Our over time pay was restored. I HATE the republican party.
  • by country boy Location: havelock on Jul 27, 2011 at 10:26 AM
    I am sick of hearing the goverment talk about the number of people living in poverty. Poverty definition was made by the govenment to get more dependent on the government, ie votes. I have very little sympathy for most who are living off the government, most of it is their fault, either just to darn lazy to work or look for work, or chooses to have children they cannot afford. I am tired of giving my money for stupid and bad decisions. Who in their right mind would have 4 or 5 children making minimum wage?? Bottom line is they are not concerned, us tax payers will come to their rescue. I wish there was a 90 day limit to receive welfare, get a job, quit havig children, or put them up for adoption. I am tired of working for others.
  • by Anonymous on Jul 27, 2011 at 09:19 AM
    We are all minorities while this pres is in the outhouse.
    • reply
      by Common Sense on Jul 27, 2011 at 11:34 AM in reply to
      If Boehner and the Republicans get their way we'll all (except 1%) be poor too! Protect the rich at all costs.
  • by Dave Location: Wilson on Jul 27, 2011 at 08:37 AM
    This is the problem with liberal democrat policies that is as old as time. They claim to represent the poor and minorities but their policies ALWAYS end up hurting them more. The dem and obama policies have created minority unemployment levels not seen for a generation. Welfare and foodstamps directly contributed to the breakdown of the black family by eliminating the need for a strong father figure. Your government daddy will provide for you!!! One day maybe these populations will learn. Under Bush minority unemployment was half of what it is under obama. The wage gap under Bush was not as wide. obama is failing everyone.
    • reply
      by I Fought the Law on Jul 27, 2011 at 09:07 AM in reply to Dave
      Right on Dave....great comments
    • reply
      by Anonymous on Jul 27, 2011 at 06:30 PM in reply to Dave
      Ummmmm Bush failures in 8 years....and counting. http://www.publicintegrity.org/investigations/broken_government/articles/full_list/
      • reply
        by Anonymous on Jul 28, 2011 at 04:40 AM in reply to
        Ummmmmm obamas failures in just a few years.........ASTOUNDING!
  • by US-First Location: Greenville on Jul 27, 2011 at 07:50 AM
    So with Obama and the Liberals in total control for two years, their target voters slipped further into poverty even as they hold stronger to liberal propaganda that they will be lifted by government social programs.
  • by BLT on Jul 27, 2011 at 07:22 AM
    It's not a black or white issue. The census was flawed. I know TONS of people, friends and family included, that were born in poverty. I support government assistance when it's appropriate. Honest people will get back on their own and make something of themselves. The dishonest and lazy will lie and do nothing with the support they are given; then they have the nerve to blame whites and government for their problems. Sorry, but using this mindset doesn't get you out of your hole. You gotta get a shovel and pack dirt underneath your feet until you finally crawl out.
    • reply
      by Barbara on Jul 27, 2011 at 08:45 AM in reply to BLT
      BLT, if you run for office, let me know--I will support you! You have a lot of common sense. I, too, support short term government assistance, but not as a way of life forever!
  • by Anonymous on Jul 27, 2011 at 07:01 AM
    The reason for the gap is all the lazy folks got laid off during the recession and are still drawing unemployment because they're too lazy and sorry to go out and look another job as long as their check is in the mail.
    • reply
      by To anonymous on Jul 27, 2011 at 07:50 AM in reply to
      Have you ever prayed the Lord's prayer? Do you remember the words, "forgive me my trespasses as I forgive the trespasses of others"? I pray you avoid those words from now on or you are in trouble!
      • reply
        by Anonymous on Jul 27, 2011 at 09:09 AM in reply to To anonymous
        What....for telling the truth. Yeah why don't pray for yourself....judge not.
  • by Anonymous on Jul 27, 2011 at 06:55 AM
    Half the comments aren't going through....wonder why??? WITN's got someone who is onesided screening this article.
    • reply
      by Anonymous on Jul 27, 2011 at 07:46 AM in reply to
      ha ha WITN screener....you posted this worthless comment of mine just to TRY to prove a point. You know you're onesided and have left out some comments just because you don't like them.
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