http://articles.boston.com/2010-05-1...white-families
ON THE SURFACE, the American Dream for African-Americans has risen on a steady slope right into the White House. Not only did the United States elect its first black president in 2008, that was also the same year, according to a new report from the Brookings Institution’s Metropolitan Policy Program, that the percentage of African-Americans who live in the suburbs crossed the 50 percent mark. “Within metropolitan areas,’’ the report said, “the 2000s indicate that the nation is well on its way toward achieving greater city-suburban racial and ethnic integration.’’
But below the surface, there remains a terrible silent segregation. Yesterday, Brandeis University’s Institute on Assets and Social Policy released a report that found that the wealth gap between white and African-American families more than quadrupled in the last quarter century. In 1984, the median value of financial assets for white families in America — not including home equity — amounted to $22,000. The median value for African-American families was $2,000.
By 2007, white families had a median value of $100,000 in financial instruments, such as retirement accounts, pension funds, stocks, bonds, and CDs. But the median value of African-American family financial holdings grew to only $5,000. Thus, the gap grew from $20,000 in 1984 to $95,000 in 2007. The study said the gap in 1984 amounted to a couple years of public college tuition. Today, the gap would fund “full tuition at a four-year public university for two children, plus tuition at a public medical school.’’
The gap is so huge that white middle-income families far outpace high-income African-American families. High-income African-Americans have a wealth of $18,000, barely more than for middle-income African-Americans. The respective median wealth of high-income and middle-income white households are $240,000 and $74,000.
“It wasn’t just surprising, it was shocking,’’ said study co-author Thomas Shapiro. That says a lot coming from him, a long-time researcher on racial wealth gaps and co-author of the award-winning 1995 book, “Black Wealth, White Wealth.’’
He said the new data is poignant because it follows the same set of families over 23 years. Previous reports on wealth gaps were derived from statistical “snapshots’’ from single points in time. “We were taken aback because we assumed that whatever baseline a particular family started from, things are going to naturally get better for them,’’ Shapiro said. “But for African-American families, it didn’t.’’
Shapiro has interviews planned over the next two years to find out why. The data belie the stereotype that African-Americans are less wise with their money, since savings rates of black and white households are similar by income. While the study does not look at home values, the asset gap is probably embedded in America’s housing and lending structure, which still rejects African-American households at higher rates than similar-earning white households for housing and home equity loans. That disproportionately forces black families into more onerous financial arrangements. In a domino effect, such families may have to take on higher debt or pay more out of pocket for education. Other factors may include a stronger need to help out extended family.
“It is not that wealth has not accumulated for African-American families,’’ Shapiro said, “What we’re showing is that along the way, they have to spend it.’’
Shapiro said the gap is so wide that the government has to help narrow it. He pointed out that, according to the Pew Economic Mobility Project, the vast majority of federal deductions and benefits to enhance upward mobility ended up in the hands of the wealthiest Americans. For instance, between 72 percent and 98 percent of deductions for retirement savings, health insurance, home mortgages, self-employed health insurance, and preferential rates on capital gains in 2006 went to the top 20 percent of income-earning Americans.
“We need a national portfolio shift in that investment,’’ Shapiro said. “Right now, we have a broken chain of achievement. African-Americans are achieving. But the payoff that gets passed on to the next generation is not the same.’’ For too many achieving families, the American Dream is still a restless night.
http://www.post-gazette.com/pg/10068/1041225-84.stm
Women of all races bring home less income and own fewer assets, on average, than men of the same race, but for single black women the disparities are so overwhelmingly great that even in their prime working years their median wealth amounts to only $5.
In a groundbreaking report released Monday by a leading economic research group, social scientists turned a spotlight on the grave financial challenges facing an often overlooked group of women, many of whom could not take an unpaid sick day or repair a major appliance without going into debt.
"It's rather shocking," said Meizhu Lui, director of the Closing the Gap Initiative based in Oakland, Calif., who contributed to the report "Lifting as We Climb: Women of Color, Wealth and America's Future."
Among the most startling revelations in the wealth data is that while
single white women in the prime of their working years (ages 36 to 49) have a median wealth of $42,600 (still only 61 percent of their single white male counterparts), the median wealth for single black women is only $5.
"Even for those of us who have been looking at the wealth gap for a while, we were shocked and amazed at how little women of color have," Ms. Lui said.
Researchers at the Insight Center for Community Economic Development, based in Oakland, Calif., analyzed data from the 2007 Survey of Consumer Finances, a voluminous report the Federal Reserve Board issues every three years that examines household finances in this country.
Wealth, or net worth, measures the total of one's assets -- cash in the bank, stocks, bonds and real estate; minus debts -- home mortgages, auto loans, credit cards and student loans. The most recent financial data was collected before the economic downturn, so the current numbers likely are worse now than at the time of the study.
Black women, in general, were more likely to have participated in the subprime loan crisis with upper-income black women being five times more likely to have received a high-cost mortgage than upper-income white men.
"The popular image is they spend too much, which is the reason they are running up credit card and consumer debt, but the cost of living has risen faster than income, and they need to go into debt for basic daily necessities," Ms. Lui said. "It's compounded because unemployment is twice as high in the black community than it is in the white community."
For all working-age black women 18 to 64, the financial picture is bleak. Their median household wealth is only $100. Hispanic women in that age group have a median wealth of $120.
"That means half of [black women] have a net worth of more than $100 and half have a net worth of less than $100," Ms. Lui said. "So that gives you an idea of how far in debt some women of color are."
Married or cohabitating white women have a median wealth of $167,500. Married or cohabitating black women have a median net worth of $31,500.
The reasons behind the daunting financial challenges black women face are numerous and complex.
"There are excuses and circumstances that have evolved in society, which put black women where they are," said Esther Bush, executive director of the Urban League of Greater Pittsburgh, who said in Pittsburgh more than 70 percent of African-American families are headed by single women.
The recession has hit single mothers especially hard.
According to a recent report by the Institute for Women's Policy Research and the Women and Girls Foundation of Southwest Pennsylvania, more than four out of 10 families headed by single mothers in Pittsburgh and more than one in three in Pennsylvania, live in poverty.
In Pittsburgh and across the country, the financial burdens of single parenthood fall mostly on women, but black women are more likely to endure the work and responsibility of raising children on their own. They are more likely to be the backbone of their families and communities, with greater responsibilities to support struggling friends and families.
In a 2008 study of black women and their money, the ING Foundation found that black women -- who frequently manage the assets of their households -- financially support friends, family and their houses of worship to a much greater degree than the general population.
They also are more likely to be employed in jobs and industries -- such as service occupations -- with lower pay and less access to health insurance. And when their working days are done, they rely most heavily on Social Security because they are less likely to have personal savings, retirement accounts or company pensions. Their Social Security benefits are likely to be lower, too, because of their low earnings.
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High unemployment and high incarceration rates for black men also lower the likelihood of single black women finding a partner to help build a more secure financial future.