US Wealth Gap Grows for Ethnic Minorities

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Published on Tuesday, October 19, 2004 by the Guardian/UK

US Wealth Gap Grows for Ethnic Minorities

by Suzanne Goldenberg in Washington


The wealth gap between white households and Hispanic and African-American families in the US has widened significantly, with the last recession inflicting a heavy toll on minority households, a new study said yesterday.

An analysis of US census data by the Pew Hispanic Center revealed that the 2001 economic downturn deepened a legacy of economic discrimination, with Hispanics and African-Americans harder hit and taking longer to recover. By 2002, that produced a further deterioration of the economic divide, where minorities own only a fraction of the wealth enjoyed by whites. The median net worth of white households was $88,651, or 11 times greater than Hispanic families ($7,932) and 14 times greater than African-American families ($5,988.)

"We have always known about the wealth gap, but what is new and disturbing is that the gaps are increasing," said Roderick Harrison, a demographer at the Joint Center for Political and Economic Studies. "What you are seeing here are the historic disadvantages of black and Hispanic populations from generations ago being carried over."

The Pew study focuses on the damage caused to Hispanic and African-American aspirations during an economic downturn. Between 1999 and 2001, rising unemployment reduced the net worth of Hispanics and African Americans by 27%. That left minority families without a financial cushion, and far more vulnerable to economic reversals than white households.

"Many of them are living on the edge and more than one quarter have zero or negative wealth," said Rakesh Kochhar, author of the report. "They don't have the cushion, and that makes recovery harder." Mr Harrison argues that minority families are also the last to benefit from times of economic expansion.

http://www.commondreams.org/headlines04/1019-03.htm