America’s racial wealth gap grows to largest on record

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(NNPA)—In the 25 years since the federal government began publishing demographic data on wealth, the worst disparities emerged for 2009. A newly released analysis by the Pew Research Center found that the median wealth of White households is 20 times that of Blacks, and 18 times that of Latinos—a gap that nearly doubled in size for these same three racial groups more than 20 years ago.

CharleneCrowell

Further, when Pew compared wealth gaps for 2005 to those of 2009, the clear conclusion was that the combination of the housing market bubble and the subsequent recession were the underlying causes for these record disparities. In 2005, just before the housing bubble burst, White median net worth was $134,992. Comparable figures for Latinos and Blacks were respectively $18, 359 and $12,124.

By 2009, all three groups lost wealth; but Black median net worth was less than half of that recorded for 2005: $5,677; Latinos families were only slightly better at $6,325. Yet for White households, the median net worth decreased to $113,149.

According to Pew, household wealth is determined by subtracting all debts owed from the accumulated sum of all assets, including real estate, cars, savings and checking accounts, retirement accounts, stocks, etc.

Since the report was released, much of the extensive news coverage has omitted a key finding. From 2005 to 2009 the number of families with either zero or negative worth grew dramatically as well. For Black families, the percentage grew from 29 percent to 35 percent; for Latino families, the negative wealth grew from 23 percent to 31 percent. Yet for White families, negative wealth went from 11 percent to15 percent.

More plainly stated, African-Americans are becoming poorer at a faster rate than any other race or ethnic group in the country. Our forefathers may have worn the shackles of slavery. But this generation is wearing shackles of a different kind: poverty and debt.

According to the Bureau of Labor Statistics, America’s Black unemployment level is double that of White America. After comparing unemployment data to that of Core Logic, a private research firm, among the nation’s top states for underwater mortgages—states with homeowners owing more than their house is now worth—the top five of those states also have the nation’s highest unemployment: Nevada (12.4 percent), California (11.8 percent), Florida (10.6 percent), and Michigan (10.5 percent).

If these trends are allowed to continue, America’s ‘haves’ and ‘have nots’ will move even further towards the two separate Americas first warned by the Kerner Commission Report in the 1960s. Named for then-Illinois’ Gov. Otto Kerner, the report told a tale of two Americas were emerging—one Black and the other White. In 2011, the divide is not just about race but wealth as well.

All of America should feel uncomfortable about the growing concentration of poverty in Black and brown communities, who together represent 28 percent of the nation’s population.

It is time for leaders—public and private—to stand up and insist that our nation create new and sustainable jobs with incomes that lift this country’s poor into self-sufficiency and hopefully one day—sustainable prosperity.

(Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She can be reached at Charlene.crowell@responsiblelending.org.)

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