Racial Wealth Gap Much Greater Than Income Gap
March 14, 2000
A survey conducted for the Federal Reserve reveals that the incomes of non-white and Hispanic families is a little less than two-thirds that of white households. But the household worth of non-white and Hispanics is less than one-fifth that of white families.
- In 1998, the median net worth for Hispanic, African-American, Asian and other minorities was $16,400 -- amounting to 17.28 percent of the net worth of white families.
- The median net worth for non-Hispanic white families was $94,900.
- The median income for non-white and Hispanic families was $23,300 in 1998 -- 61.8 percent that of non-Hispanic whites.
- Non-Hispanic whites registered a median income of $37,700.
Minorities own homes at a much lower rate than whites and are far less likely to invest some of their earnings in stocks -- which propelled the assets of many white families upward in the 1990s.
While whites inherit more money than minorities and so have a larger asset base to devote to investments, that is not the whole picture. Part of the gap is simply the result of statistical quirks. Wealth figures are calculated by household, not by individuals. More blacks, for example, are single than whites and so household net worth, and income, are likely to be lower -- even if the individual members are equally well off.
Source: Yochi J. Dreazen, "U.S. Racial Wealth Gap Remains Huge," Wall Street Journal, March 14, 2000.
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