The Wealth Gap Between Blacks And Whites Is Worse Than You Thought
The wealth gap is not only growing between rich and poor, it is also ballooning between Blacks and Whites. That gap has been increasing since the recession began and continued as jobs and financial issues continued to grow.
Recently the Pew Research Center reported that the median White household was worth $141,900–this is a whopping 12.9 times more than the typical Black household, which was worth just $11,000. This gap — and the issues around it — were brought into sharp relief in the short documentary Black Heirlooms, which talks about the wealth gap and estate planning.
But according to Jordan Weissmann in Slate, Pew is overstating Black wealth. “Do you consider your car an asset? Or is it a consumer good?* Because if you don’t count it as an asset, the median Black household has virtually no ‘wealth’—which is what a family owns minus all of its debts—to speak of,” Weissmann writes.
Pew’s findings are based on the Federal Reserve’s 2013 Survey of Consumer Finances. When the Central Bank adds up America’s net worth, it includes vehicles and some other durable goods along with items like houses, stocks, bonds, and savings. And, according to the Fed, the median vehicle is worth about $15,800.
When you remove vehicles and other durables from the picture, the picture for minority families is much worse. According to New York University economist Edward Wolff, the median Black family, minus cars and the like, is worth only $1,700, that makes the median White family’s worth, about, 69 times more.
“The story is complicated. But the upshot is simple: When it comes to finances, the U.S. has left the typical Black household with just about nothing,” writes Weissmann.