Median Net Worth of Whites Twenty Times that of African-Americans
The Pew Research Center has a report showing not just the decline in net worth across demographic groups from 2005 to 2009, but more importantly, the relative net worth of those groups.
It shows that, no matter how bad the $23,000 drop in net worth that the housing crash represented to whites, they’re still doing far better off than people of color. Hispanics lost $12,000, fully 66% of their net worth. African Americans lost almost $6,500, more than half of their net worth.
And of course, the real scandal is that the media net worth for whites is 20 times that of African Americans and 18 times that of Hispanics.
Here’s how the report describes the source of these discrepancies (the short version is that whites have more assets in addition to their homes–and lost less value in their home–than Hispanics and African-Americans).
Hispanics: The net worth of Hispanic households decreased from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all groups. Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and are more likely to reside in areas where the housing meltdown was concentrated. Thus, the housing downturn had a deep impact on them. Their net worth also diminished because of a 42% rise in median levels of debt they carried in the form of unsecured liabilities (credit card debt, education loans, etc.).
Blacks: The net worth of black households fell from $12,124 in 2005 to $5,677 in 2009, a decline of 53%. Like Hispanics, black households drew a large share (59%) of their net worth from home equity in 2005. Thus, the housing downturn had a strong impact on their net worth. Blacks also took on more unsecured debt during the economic downturn, with the median level rising by 27%.
Whites: The drop in the wealth of white households was modest in comparison, falling 16% from $134,992 in 2005 to $113,149 in 2009. White households were also affected by the housing crisis. But home equity accounts for relatively less of their total net worth (44% in 2005), and that served to lessen the impact of the housing bust. Median levels of unsecured debt among whites rose by 32%.
Even with this explanation, the Pew Report doesn’t talk about the implications of this. What kind of stability can a family have if they effectively have only $6,000 to fall back on (and for 24% of Hispanic and African-American households, that $6,000 represents nothing more than a car). Given the rush to gut social security, what kind of retirement (or disability) can this family have?
And note the rise of unsecured debt among all races. A lot of folks are just living on credit cards or other debt (or were, back in 2009; a lot of people have gone bankrupt since then).
There’s a huge chunk of this country living on the edge and that group is disproportionately African-American or Hispanic.
We are getting that “third world” look around the edges…
Right. THe thing that’s amazing is that, since this is median net worth, this is a totally different measure than the economic disparity of the country (though it is influenced by it). So one thing that’s going on is that the richest 400 own everything. (Those 400, many though not all of whom are white, wouldn’t affect the media net worth, of course).
But at the same time, there’s a big split between those w/o much (a few cars and some equity in a house) and those with nothing.
At Netroots Nation, Alan Grayson was talking about this–he was describing that we have not two Americans (Edwards’ vision) but three, with the folks with just a car, if that, at a whole other layer.
One other thing I’m trying to get my brain around: the means here are very different than the medians (though still unequal).
Does that reflect an Oprah effect? Does it suggest there are a handful of very wealthy African-Americans and Latinos pulling the mean way up?
Well, I wonder if there is a group of folks who come to America with money behind them. My foreign exchange student roommates in college, all had wealthy families back home. Were coming from aristocracy in their homeland…I remember a mexican brother and sister and several friends from Iran. It’s not just poor Mexicans that come here. Or poor Iranians or poor Indians. Some come with financial backing at home. Perhaps this group affects the mean?
I’d say those median levels for whites are pretty dismal too. What is the age associated with this median net worth? $150K is not much if you are getting close to retirement age. A bout of unemployment and/or a medical emergency would wipe you out toute suite.
With positively-skewed distributions (such as net worths or incomes), means are always above medians. By how much the mean is higher than the median is a half-arsed but usable estimate of how skewed the distribution is. So when a comparison of two groups has a ratio of medians of X and a ratio of means of Y, the difference between X and Y is a quarter-arsed but still usable estimate of the difference in skew between the two distributions.
As to what causes differences in skew, anyone could provide you with wild guesses that are as good as mine. But, please, when you evaluate these guesses, keep in mind that there are factors besides race in play. For example, the way the tax code is written and the way that some people play games to avoid paying taxes, plus the baseline costs of (e.g.) feeding a human, all of these – if thought of as being fixed values, not proportions – would act to alter the skew as a function of the mean. In English, I’m saying that groups with higher mean new worths might be more skewed because of the higher mean (plus the factors I gave above) and not for any other group-specific reason. Put another way, the relationship between mean and median is correlational; be careful about inferring a specific causal story.
OT – we need the edit function back; I try to proof-read, but keep failing
You have a great and truthful typo
“And of course, the real scandal is that the media net worth for whites is 20 times that of African Americans and 18 times that of Hispanics.”
Though I am not sure how you measure media worth.
JTMinIA
Sorry for me being daft today. Is it fair to try to interpret what the mean means separate from what the media means?
So, who are the House Republicans, besides mostly white males?
Here’s my speculation:
– 25% in-the-closet gay – who cross-pledge mutual loyalty to each other and vote against gay rights. Rahm got this group to switch, as a 60-vote block, on the Healthcare vote.
– 50% out-and-out corrupt – in bed with lobbyists – using their power and position to enrichen themselves. Based simply on the gooper addiction to earmark pork.
– 25% morally compromised – porn, mistresses, fetishes, gambling, alcoholism, etc. The only thing stronger than their impulses is their sense of entitlement.
All of them are Ideologues, who gladly sign pledges to demonstrate their loyalty to the Party-over-Country ’cause’ – rationalizing their ‘secret’ indulgences – and march in lock-step just like they’re told…
…by their owners…
…because Loyalty (or else!) trumps all other considerations.
Boehner, like Hastert and Delay before him, is just a field boss – he’s not the dark hand behind Republican block-voting.
Shine a light on the wire-pullers, and the irrationality comes to an end.
jm2c
Thx for highlighting this. There’s a political visibility aspect to this evidence. I recall when Michael Harrington published “The Other America” in the early 1960’s. Although it was true then as it is true now that people of color are far more likely to live in poverty than whites, only when there was widespread realization that a majority of the poor were white did the story get traction.
I suspect that the same is true now. In terms of numbers, there are probably a lot more more poor whites than poor Hispanics and African Americans.
Not that I expect this kind of evidence to gain any traction now. Social conscience, or perhaps I should say, concern about persistent or inherited socio-economic inequality, is largely absent among the teapers as well as a large segment of the white population in America. Data, facts, do not matter. But at the same time I hardly think many of those folks buy in any more to Horatio Alger mythology. Rather they’re hunkering down into pure hedonism.
And then we have this public language by our political leaders, who avoid reference to “poor people,” or even to the “working class.” In their repeated reference to the “middle class” represents a social and moral blindness to the economic reality that many people — and especially people of color — find themselves in.
ot: “Jerry Brown nominates Goodwin Liu to California Supreme Court”
http://latimesblogs.latimes.com/lanow/2011/07/brown-nominates-berkeley-professor-goodwin-liu-to-california-supreme-court.html
Means are medians are very different things, assuming that the distribution is skewed. And you hit the key issue in your post when you said something about the upper tail being irrelevant to the median; that’s exactly why the two are so different. The median is just the middle point, with half of all value above and half below. It only depends on the values in the middle. The mean is “center of mass” for the data; in this case, the tails make a huge difference.
Added thought: if it were still the 1960s or 1970s, then I could accept that the gov’t would be releasing summary stats on things like net worth or income. But, com’on! It’s 2011 and pdfs are cheap to make and free to read. Show us the distribution function! Let us see whether the upper tail for minorities is pulling away from the mass of the data as quickly as it is for whites. That’s what we want to know. We want to know if, while getting screwed more, the upper tail for minorities is being squashed down as hard or worse or if the upper tail for minorities is as protected from recession as the upper tail for whites. That’s what would be interesting.
Thanks for highlighting this, EW.
This really shows the modern face of Racism in America. It may not be overt,but it is devastating nonetheless.
Bob in AZ
At what point will the “powers that be” understand the historical significance of how extreme disparity radicalizes those who see no chance of improving their lot? I fear that realization will come much too late, if at all.
Good post. I missed that you left firedoglake. Glad to find you.
You’re post on deespair is excellent. Keep hope alive.
@JTMinIA # 13–It’s the Pew Research Center, not the government, that did the calculations. The survey data comes from the US Census Bureau, but the analysis is Pew’s. You can find the answer to your question about the upper tail for minorities in Chapter 8 of the Pew report. Here’s the quick summary for the cut-off point for the top 10 percent of wealth-holders by race: whites=$702,950;
Hispanics=$236,161;
blacks=$234,252;
and Asians=686,349.
So there is also a large gap between the top 10% of each group-by-race.
For the full dataset from the Census Bureau, try this link:
http://www.sipp.census.gov/sipp_ftp.html#sipp08