Story at a glance
- A triennial survey from the Federal Reserve reveals large gaps in wealth between white, Black and Hispanic families.
- Economists say the gap is due to prolonged socioeconomic inequality.
New data from the U.S. Federal Reserve Board’s triennial Survey of Consumer Finances (SCF) revealed that while income has been broadly growing among all ethnic groups over the past three decades, Black American families’ average wealth is less than 15 percent than that of white American families.
According to the survey, the median wealth of white families was $188,200, compared with only $24,100 for Black families.
Data also found that within all racial groupings, “the mean is substantially higher than the median, reflecting the concentration of wealth at the top of the wealth distribution for each group.”
The survey, which provides a snapshot of the economic conditions of Americans and can be siphoned based on race and ethnicity, looks at wealth trends in three-year intervals.
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Some of the trends show that between 2016 and 2019, median household wealth rose across all race and ethnicity groups, with Black and Hispanic families seeing faster rates of growth, at 33 and 65 percent, respectively, than their white counterparts, who saw a 3 percent growth rate.
Simultaneously, the faster wealth growth rates for Black and Hispanic families only saw modest changes in the longstanding gaps in wealth between these and white families, since minority households started off at a lower initial rate. The report specifically notes that the Black-white gap in median wealth only increased to $164,100 in 2019 compared to $163,700 in 2016.
The corresponding Hispanic-White median wealth gap fell to $152,100 in 2019 compared to $160,000 in 2016.
The results follow a previously established pattern that was recorded during the recession, where median wealth for all races fell by about 30 percent, but Black and Hispanic families saw their wealth fall an additional 20 percent from 2010 to 2013, while white families’ wealth was relatively unchanged.
Other sources of wealth were examined, including homeownership, inheritances and wealth gains over life cycles. Across all examples, white families earn more wealth from these sources than Black and Hispanic counterparts.
While the survey focused on wealth accumulation patterns between Hispanic, Black and white families, it included a category dubbed “Other,” which encompasses families identifying as Asian, American Indian, Alaska Native, Native Hawaiian, Pacific Islander or another race.
Authors noted that “the same patterns of inequality in the distribution of wealth across all families are also evident within race/ethnicity groups,” implying that while families identifying as other races have more wealth than Black or Hispanic families on average, they are still lower than white families.
Briefly mentioned in the survey was the effect the coronavirus-induced recession has on household wealth across different races. It cited a paper which found that “without the substantial cash assistance included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, there would be large disparities by race and ethnicity in the share of families who could cover their normal, recurring expenses if they were to lose their job for six months or more.”
The findings underscore messages about racial economic inequality, which have been at the forefront of the national conversation since resurgence of Black Lives Matter protests over the summer. A national race reckoning has highlighted inequalities across American life, including police brutality, the lasting socioeconomic effects of slavery and institutionalized racism, and the subsequent disparity of economic opportunities Black Americans face compared to white Americans.
An earlier economic impact report commissioned by Citibank found that the systemic gaps Black Americans face has cost the U.S. economy roughly $16 trillion over the past two decades.
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Published on Sep 29,2020