The average wealth gap between white families and Black and Hispanic ones reached a new high in 2022, topping $1 million in household wealth, according to a new report.
New research by the Urban Institute, a nonpartisan think tank focused on economic and social policy research, found that the average wealth of white families in 2022 reached a record high of over $1.3 million, compared to about $227,000 for Hispanic families and $211,000 for Black families. This report marks the first time the institute has recorded a seven-figure disparity in average wealth for both Black and Hispanic households.
The median wealth for white families was $284,000, compared to $62,000 for Hispanic families and $44,000 for Black families.
“Inequities measured at the median will give you a better sense of the comparisons across typical families, but inequities measured at the mean will give you a better sense of the macro-level disparities in wealth accumulation in this country — generally, and by race,” said Madeline Brown, a senior policy associate at the Urban Institute. She added that both numbers are important to consider because they are the result of structural racism.
“One million dollars in a gap indicates that we still have severe racial wealth inequity in this country,” Brown said. That lifetime difference in accruing wealth severely affects families’ ability to “buy a home, invest in their children’s college, invest in their children’s businesses, support their families,” she added.
The report shows how racial and gender gaps in earnings, retirement savings and emergency savings can contribute to a lifetime lag for individuals and families. But homeownership is the primary driver of wealth-building in the U.S., the report said, and continues to lag for Black families in particular because of “the stubborn legacy of racist housing policies.”
The average white homeownership rate has increased from about 64.9% in 1960 to 73.1% in 2022, according to the report, while Black homeownership has gone from 38.2% to 44.3% in the same period. Hispanic and Asian families both saw their highest recorded average homeownership rates in 2022, at 51.1% and 63.2%, respectively, but still lagged behind the rates of white families.
The research also found that significant disparities continue in individual lifetime earnings between white, Black and Hispanic people. Data shows the average white man born between 1960 and 1964 earned $2.9 million over the course of his career, compared to less than $1.8 million for the average Black man and about $1.7 million for Hispanic men. The average white woman in the same age bracket earned $1.7 million over the course of her career, compared to less than $1.3 million for Black women and $883,000 for Hispanic women.
“In a nation that professes that those who work hard and play by the rules should be rewarded with social and economic upward mobility, these persistent disparities are a stark reminder that, as a society, we have not achieved this goal,” the report said.
The Urban Institute’s data comes largely from the Survey of Consumer Finances conducted every three years by the Federal Reserve. The 2022 survey was the first time data was disaggregated for Asian Americans, who had the highest average family wealth of any group that year at $1.8 million. Other data shows that household income varies greatly among Asian American groups.
When it comes to solutions, the report proposes a series of policy changes to help close the racial wealth gap, including limits to the mortgage interest tax deduction and reparations for Black Americans.
“Looking at that $1 million gap, reparations are, depending on how they’re delivered, a promising policy in bringing that gap down,” Brown said. “Because the history is such that these policies have compounded on themselves and created a situation where, overall, our wealth distribution in this country is incredibly inequitable.”
Source: | This article originally belongs to Nbcnews.com
