The Great Recession decimated the wealth of many Americans, but the downturn hit black and Hispanic families especially hard, a new study finds, widening the already large gap in wealth between white and minority households.
The average white family was six times wealthier in 2010 than the average black or Hispanic family, according to a study from the Urban Institute, a nonpartisan public policy research organization. That’s up from 1983, when the average white family was five-times as wealthy as the average black or Hispanic family.
To put that into more concrete terms: By 2010, the average white family had more than $500,000 more in total wealth than black or Hispanic families, up from $283,000 in 1983.
Overall, the economic downturn cut Hispanic families’ wealth by 40 percent, black households’ wealth by 31 percent and white households’ wealth by just 11 percent.
The racial income gap was actually much smaller than the wealth gap in 2010, with whites earning about two dollars for every dollar earned by black and Hispanic families, the study found. But when considering wealth, a measurement that includes both income and assets, black and Hispanic households appear at an even greater disadvantage since the recession in the event of an unexpected job loss, medical emergency, or other financial disaster.
The study adds to the growing body of evidence that the recession exacerbated already troubling trends. Only the richest Americans saw their wealth grow during the economic recovery, while everyone else’s dropped, according to a recent Pew report.
The housing bust and drop stock values dealt a blow to many Americans’ assets, but black and Hispanic families suffered disproportionately, the Urban Institute study found, indicating that the actions of some of the nation’s largest financial institutions in the lead up to the crisis may have augmented the racial wealth gap. Wells Fargo was among those accused of discriminatory practices in the lead up to the financial crisis, including targeting minority borrowers for predatory loans.
Hispanic households were hit especially hard on this front, with their average home equity cut in half between 2007 and 2010, compared to just one-quarter for black and white households, the study found.
At the same time, black families saw their retirement accounts drop by 35 percent in value on average, while Hispanic households’ dropped by 18 percent and white households saw a slight increase.
(Hat tip: The New York Times)
Also on HuffPost:
When the economy was roaring in 2007, the U.S. unemployment rate <a href="http://www.bls.gov/spotlight/2012/recession/pdf/recession_bls_spotlight.pdf">was 5 percent</a>. In January 2013 the unemployment rate <a href="http://www.huffingtonpost.com/2013/02/01/january-jobs-report-unemployment-rate_n_2597751.html">was 7.9 percent</a>.
Income And Wages
The U.S. median <a href="http://money.cnn.com/2012/09/12/news/economy/median-income-poverty/index.html">income fell to $50,054 in 2011</a>, which is the most recent full year in which that data is available. That's down 8.1 percent since 2007. Wages also fell to a record-low <a href="http://www.nytimes.com/2013/01/13/sunday-review/americas-productivity-climbs-but-wages-stagnate.html?_r=0">43.5 percent of the economy</a> in 2012, according to the New York Times. Meanwhile, corporate profits are still booming.
Number Of People On Food Stamps
The number of Americans on food stamps <a href="http://www.cnbc.com/id/48898378/Record_46_Million_Americans_Are_on_Food_Stamps">surged to a record in 46 million </a>in June 2012. That's compared to <a href="http://www.nytimes.com/2008/03/31/us/31foodstamps.html">26.5 million in 2007</a>.
More<a href="http://www.kaiserhealthnews.org/stories/2012/september/12/census-number-of-uninsured-drops.aspx"> than 16 percent of Americans</a> -- or 48.6 million people -- were uninsured in 2011, according to Kaiser Health News. This number is higher than what it was in 2007, when the share of uninsured Americans was <a href="http://www.nbcnews.com/id/26404454/#.UTYwAnyfHEl">15.3 percent</a>.
Student Loan Debt
The average student loan debt for a class of <a href="http://www.nytimes.com/2012/10/18/education/report-says-average-student-loan-debt-is-up-to-26500.html">2011 graduate was about $26,500</a>, according to the Project on Student Debt data cited by the New York Times. Since 2007, when the<a href="http://www.pewsocialtrends.org/2012/09/26/a-record-one-in-five-households-now-owe-student-loan-debt/"> average student debt was $23,349</a>, student loan debt has increased for almost every demographic and the size of that debt has gone up as well, according to Pew.
In 2011,<a href="http://usnews.nbcnews.com/_news/2012/01/18/10177017-homeless-numbers-down-but-risks-rise?lite"> 644,067 Americans experienced homelessness</a> on any given night, according to data from the National Alliance to End Homelessness cited by NBC News. Though that number is <a href="http://www.endhomelessness.org/library/entry/the-state-of-homelessness-in-america-2012">actually down 13 percent from 2007</a>, the decrease is largely attributed to a boost in the number of programs to help keep the homeless off the streets.
Children In Poverty
More <a href="http://www.census.gov/prod/2012pubs/p60-244.pdf">than 16 million children</a> -- or about 20 percent of American children -- were in poverty in 2011, according to the Census Bureau. That's up from nearly <a href="http://www.huffingtonpost.com/2012/01/03/child-poverty-20-percent_n_1181548.html">18 percent of American children</a> in 2007.
We're on our way to becoming a renter nation. The homeownership rate in the 12 months leading up to May 2012 was <a href="http://money.cnn.com/2012/04/30/real_estate/home-ownership/index.htm">65.4 percent</a>, according to Census Bureau data cited by CNNMoney. That's the lowest rate in 15 years. In the last quarter of 2007, the homeownership rate was <a href="http://www.census.gov/housing/hvs/files/qtr312/q312press.pdf">67.8 percent</a>.
There were <a href="http://money.cnn.com/2012/01/12/real_estate/foreclosures/index.htm">2.7 million foreclosures</a> in 2011. That's up <a href="http://www.realtytrac.com/content/press-releases/us-foreclosure-activity-increases-75-percent-in-2007-3604">from 2.2 million foreclosures in 2007</a>.