AFRICANGLOBE – The housing bust and and recession led to a seismic collapse of middle-class wealth that, according to at least one prominent economist, has left the median American family poorer today than it was in 1969. But, as the Federal Reserve Bank of St. Louis reminds us in a report, the fallout hasn’t been quite the same for families of all races. While there has always been an enormous wealth gap between whites, blacks, and Hispanics, the past few years have only seen it widen.
Households of all ethnicities saw their net worth decline after 2007. But between 2010 and 2013, white and Asian families experienced a slight rebound. Black and Hispanic families did not.
As a result, the typical Black or Hispanic household is a bit poorer compared with the typical white household now than it was a few years ago.
The important issue here isn’t the precise ratio of white wealth to Black or Hispanic wealth. Rather, it’s the divergent paths. Whites and Asians, who tend to have more of their money saved in the sorts of financial assets that have rebounded nicely in the past few years, are recovering. Blacks and Hispanics, who before the crash tended to have an outsize portion of their net worth tied up in their homes, are simply not.
By: Jordan Weissmann