Wealth Gap Rises Between Whites, Non-Whites
People like to talk about “the wealth gap” as relating only to the one percent and the 99. But there are actually multiple wealth gaps emerging – by age, gender and now, by race.
According to a study by the Census Bureau, the wealth gap between whites, Hispanics and black Americans grew during the recession.
Between 2005 and 2010, the media net worth of white Americans (non-Hispanic) fell 15 percent, to $110,729. The median net worth of black Americans fell 55 percent to $4,955. And the median net worth of Hispanic Americans fell 56 percent, to $7,424. The net worth of Asians fell 54 percent, to $69,590.
Asians and whites lost more in absolute terms, with Asian median wealth dropping by $83,000 while whites lost $20,000. That compares to a loss of about $6,000 for blacks and $10,000 for Hispanics. Yet because whites' and Asians' net-worths are higher, their percentage losses were lower.
What accounts for this widening wealth-race gap?
The main contributor is home ownership and wealth portfolios. Historically speaking, homes make up a larger share of wealth for black and Hispanics. Whites have a greater share of wealth in other assets, like stocks, mutual funds and other financial instruments.
Because financial assets have recovered from the recession more strongly than home prices, wealth for whites also recovered more rapidly.
Blacks and Hispanics have also suffered from higher unemployment than whites. The unemployment rate for whites is around 7.4 percent; it’s nearly twice that level for blacks.
Just to be clear, the study doesn’t show that race is a cause of these disparities. But it is clear that in strict economic terms, the wealth gap in America is growing between the races.
Do you think there are other reasons that the wealth gap between races is growing?
-By CNBC's Robert Frank
Follow Robert Frank on Twitter: @robtfrank