| The Increasing Racial/Ethnic Wealth Gap
At the beginning of this chapter, we noted that racial and ethnic inequality has existed since the beginning of the United States. We also noted that social scientists have warned that certain conditions have actually worsened for people of color since the 1960s (Hacker, 2003; Massey & Sampson, 2009). [3]
Recent evidence of this worsening appeared in a report by the Pew Research Center (2011). [4] The report focused on racial disparities in wealth, which includes a family’s total assets (income, savings and investments, home equity, etc.) and debts (mortgage, credit cards, etc.). The report found that the wealth gap between white households on the one hand and African American and Latino households on the other hand was much wider than just a few years earlier, thanks to the faltering US economy since 2008 that affected blacks more severely than whites.
According to the report, whites’ median wealth was ten times greater than blacks’ median wealth in 2007, a discouraging disparity for anyone who believes in racial equality. By 2009, however, whites’ median wealth had jumped to twenty times greater than blacks’ median wealth and eighteen times greater than Latinos’ median wealth. White households had a median net worth of about $113,000, while black and Latino households had a median net worth of only $5,700 and $6,300, respectively (see Figure 3.5 "The Racial/Ethnic Wealth Gap (Median Net Worth of Households in 2009)"). This racial and ethnic difference is the largest since the government began tracking wealth more than a quarter-century ago.
Figure 3.5 The Racial/Ethnic Wealth Gap (Median Net Worth of Households in 2009)
Source: Pew Research Center, 2011.
A large racial/ethnic gap also existed in the percentage of families with negative net worth—that is, those whose debts exceed their assets. One-third of black and Latino households had negative net worth, compared to only 15 percent of white households. Black and Latino households were thus more than twice as likely as white households to be in debt.
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