Morning Edition, September 15, 2011
Here's a startling figure: The typical white family has 20 times the wealth of the median black family. That's the largest gap in 25 years. The recession widened the racial wealth gap, but experts say it's also due to deeply ingrained differences in things such as inheritance, home ownership, taxes and even expectations.
And that's the difference. Study after study shows that white families are more likely than blacks and Hispanics to enjoy certain economic advantages — even when their incomes are similar. Often it's the subtle things: help from Mom and Dad with a down payment on a home or college tuition, or a tax break on money passed from one generation to the next.
Tom Shapiro of Brandeis University has tracked hundreds of families for almost 30 years and says the gap perpetuates itself.
"The larger the amount of financial wealth a family starts with, the more financial wealth it accumulated over that period of time," he says.
In other words, it's easier to get richer if you already are. Since blacks and Hispanics are less likely to have much wealth to begin with, they're less likely to have money to invest in the stepping stones to success — a small business, college or home.
Shapiro says inheritance is a big factor when it comes to the racial wealth gap. White families are four times more likely than blacks to inherit. When they do, the median inheritance is 10 times greater.This means no home equity to draw upon and no mortgage interest deduction to ease the cost of housing. recent study by the Pew Research Center
Hispanics and blacks are the nation’s two largest minority groups, making up 16% and 12% of the U.S. population respectively.
Wealth Gaps Rise to Record Highs Between Whites, Blacks, Hispanics
Moreover, since the official end of the recession in mid-2009, the housing market in the U.S. has remained in a slump while the stock market has recaptured much of the value it lost from 2007 to 2009. Given that a much higher share of whites than blacks or Hispanics own stocks— as well as mutual funds and 401(k) or individual retirement accounts (IRAs)—the stock market rebound since 2009 is likely to have benefited white households more than minority households.
Hispanics and blacks are the nation’s two largest minority groups, making up 16% and 12% of the U.S. population respectively.
Wealth Gaps Rise to Record Highs Between Whites, Blacks, Hispanics
Moreover, since the official end of the recession in mid-2009, the housing market in the U.S. has remained in a slump while the stock market has recaptured much of the value it lost from 2007 to 2009. Given that a much higher share of whites than blacks or Hispanics own stocks— as well as mutual funds and 401(k) or individual retirement accounts (IRAs)—the stock market rebound since 2009 is likely to have benefited white households more than minority households.
