It probably comes as no surprise that there are substantial disparities in wealth between Whites, Blacks and Hispanics. However, figures released last week by the Census Bureau drives home the point by documenting the extent of those disparities and showing how the gaps have been growing over the past decade.
As I wrote in today’s WI Budget Project Blog post, the new data released August 21st by the Census Bureau show not only that the top 20% of Americans have been enjoying most of the economic gains over the last decade, but the median net worth of most Americans has actually decreased.
The new report divides households into quintiles and compares the changes in net worth for each fifth of Americans from 2000 to 2011. Median household net worth decreased by $5,124 for households in the first (bottom) quintile, but it increased by $61,379 (or 10.8%) for those in the highest (top) fifth. (Figure 1).
Additional highlights of the Census Bureau report (Distribution of Household Wealth in the U.S.: 2000 to 2011) can be found in the Budget Project Blog post. However, that blog post didn’t delve into another very important part of the data – the large and growing wealth gap between Whites and minorities.
Here are a few noteworthy parts of the data that illustrate the huge racial and ethnic disparities in wealth:
- From 2000 to 2011, the median net worth of non-Hispanic Whites increased by $3,730 or 3.5% (in inflation-adjusted dollars), but decreased by $3,746 (37%) for Blacks, and by $5,576 (42%) among Hispanics.
- In 2011, the median net worth of Black households was just $6,314, which was only 5.7% of the median for non-Hispanic White households, and Hispanics had a net worth of just 7.0% of the median for non-Hispanic Whites.
- Those gaps have widened considerably since 2000, when non-Hispanic White households had assets that were 10.9 times greater than Black households, and 9.9 times greater than Hispanic households. In 2011 those ratios had grown to 17.5 and 14.4, respectively.
A very important factor in the growing divide is the increasing importance of education. For example, in 2000, a householder with a bachelor’s degree or higher had a net worth 7.3 times higher than someone without a high school diploma. In 2011, the data is aggregated somewhat differently, but the figures show that a householder with a bachelor’s degree had a net worth 15 times higher than someone without a high school diploma, and the ratio jumps to 24.6 for those with a graduate or professional degree.
Helping minority students succeed in the K-12 system and in higher education would be a very important step in reversing the unfortunate growth in wealth disparities.
Jon Peacock