"The study, which used data collected by the Census Bureau, found that the median wealth of Hispanic households fell by 66 percent from 2005 to 2009. By contrast, the median wealth of whites fell by just 16 percent over the same period. African Americans saw their wealth drop by 53 percent. Asians also saw a big decline, with household wealth dropping 54 percent.
The declines have led to the largest wealth disparities in the 25 years that the bureau has been collecting the data, according to the report.
Median wealth of whites is now 20 times that of black households and 18 times that of Hispanic households, double the already marked disparities that had prevailed in the decades before the recent recession, the study found.
“It’s a very stark reminder of the high share of minorities who live at the economic margins of this country,” said Paul Taylor, executive vice president of the Pew Research Center and an author of the report. “These data really show their economic vulnerability.”
The declines have led to the largest wealth disparities in the 25 years that the bureau has been collecting the data, according to the report.
Median wealth of whites is now 20 times that of black households and 18 times that of Hispanic households, double the already marked disparities that had prevailed in the decades before the recent recession, the study found.
“It’s a very stark reminder of the high share of minorities who live at the economic margins of this country,” said Paul Taylor, executive vice president of the Pew Research Center and an author of the report. “These data really show their economic vulnerability.”
Study Shows Racial Wealth Gap Grows Wider
by PAM FESSLER
July 26, 2011
There's long been a big gap between the wealth of white families and the wealth of African-Americans and Hispanics. But the Great Recession has made it much worse — the divide is almost twice what it used to be.
That's according to a new study by the Pew Research Center, which says that the decline in the housing market is the main cause.
The numbers are astounding. The median wealth of a white family in 2009 was 20 times greater than that of the average black family, and 18 times greater than the average Hispanic family. In other words, the average white family had $113,149 in net worth, compared to $6,325 for Hispanics and $5,677 for blacks.
That's the largest gap since the government began collecting the data a quarter of a century ago, and twice what it was before the start of the Great Recession.
Real Estate Downturn
Rakesh Kochhar, one of the authors of the report, says white households went into the recession in a much stronger position and, as a result, were better able to weather the storm.
One reason was investment in real estate. Minority families had most of their wealth in their homes, so when the housing bubble burst, Kochhar says, those households took a bigger hit.
"Especially Hispanics, for example. Sixty-six percent of their net worth derives from home equity," Kochhar says. "And they are concentrated geographically in parts of the country such as California, Arizona, Florida and Nevada, where the housing downturn was most severe."
The result is that the average Hispanic family lost two-thirds of its wealth between 2005 and 2009, according to the Pew report. Black families lost more than half of theirs.
White households, on the other hand, were more diversified. They had a greater share of their money in stocks, mutual funds and pensions. They lost wealth, but only about 16 percent on average.
Lingering Effects Of The Recession
But there were other factors at work, too.
Take Helena Edwards of San Francisco. Two years ago, she found herself, her partner and three children facing eviction from an apartment. Their landlord had foreclosed on the property, but didn't tell them. Edwards, who is African-American, was able to eventually buy a home with the help of a nonprofit group called EARN, which promotes savings by low-income families.
But she says it's not easy balancing all of her bills. Her partner lost his job, and she had her pay and health benefits cut back because of the economic downturn.
"Am I able to save $5 a month? Not really no more. Do I still live paycheck to paycheck with the house? I still live paycheck to paycheck with the house," Edwards says.
Kochhar says Hispanics and African-Americans are far more likely to be unemployed because of the recession, and that has put an additional strain on assets. It means tapping into savings and pension funds, or going into debt just to make ends meet.
As a result, about a third of black and Hispanic households had zero or negative net worth at the end of the recession in 2009. That's twice the level of white families.
Tom Shapiro of Brandeis University, who has studied the racial wealth gap for years, says he's concerned about the long-term impact. He thinks the wealth gap will likely grow even more, unless the economy turns around soon.
"If a family doesn't have enough for a safety net for itself, it can't think about moving forward or moving ahead," he says.
That means fewer resources for things like education or buying a house or starting a business. Shapiro says that only puts the average minority family further behind, and less able to weather the next economic storm.
It's a cycle Edwards hopes to break by scraping together the money for her mortgage payments. She wants to pass her house on to her daughter, so her daughter has the head start Edwards never had.
by PAM FESSLER
July 26, 2011
There's long been a big gap between the wealth of white families and the wealth of African-Americans and Hispanics. But the Great Recession has made it much worse — the divide is almost twice what it used to be.
That's according to a new study by the Pew Research Center, which says that the decline in the housing market is the main cause.
The numbers are astounding. The median wealth of a white family in 2009 was 20 times greater than that of the average black family, and 18 times greater than the average Hispanic family. In other words, the average white family had $113,149 in net worth, compared to $6,325 for Hispanics and $5,677 for blacks.
That's the largest gap since the government began collecting the data a quarter of a century ago, and twice what it was before the start of the Great Recession.
Real Estate Downturn
Rakesh Kochhar, one of the authors of the report, says white households went into the recession in a much stronger position and, as a result, were better able to weather the storm.
One reason was investment in real estate. Minority families had most of their wealth in their homes, so when the housing bubble burst, Kochhar says, those households took a bigger hit.
"Especially Hispanics, for example. Sixty-six percent of their net worth derives from home equity," Kochhar says. "And they are concentrated geographically in parts of the country such as California, Arizona, Florida and Nevada, where the housing downturn was most severe."
The result is that the average Hispanic family lost two-thirds of its wealth between 2005 and 2009, according to the Pew report. Black families lost more than half of theirs.
White households, on the other hand, were more diversified. They had a greater share of their money in stocks, mutual funds and pensions. They lost wealth, but only about 16 percent on average.
Lingering Effects Of The Recession
But there were other factors at work, too.
Take Helena Edwards of San Francisco. Two years ago, she found herself, her partner and three children facing eviction from an apartment. Their landlord had foreclosed on the property, but didn't tell them. Edwards, who is African-American, was able to eventually buy a home with the help of a nonprofit group called EARN, which promotes savings by low-income families.
But she says it's not easy balancing all of her bills. Her partner lost his job, and she had her pay and health benefits cut back because of the economic downturn.
"Am I able to save $5 a month? Not really no more. Do I still live paycheck to paycheck with the house? I still live paycheck to paycheck with the house," Edwards says.
Kochhar says Hispanics and African-Americans are far more likely to be unemployed because of the recession, and that has put an additional strain on assets. It means tapping into savings and pension funds, or going into debt just to make ends meet.
As a result, about a third of black and Hispanic households had zero or negative net worth at the end of the recession in 2009. That's twice the level of white families.
Tom Shapiro of Brandeis University, who has studied the racial wealth gap for years, says he's concerned about the long-term impact. He thinks the wealth gap will likely grow even more, unless the economy turns around soon.
"If a family doesn't have enough for a safety net for itself, it can't think about moving forward or moving ahead," he says.
That means fewer resources for things like education or buying a house or starting a business. Shapiro says that only puts the average minority family further behind, and less able to weather the next economic storm.
It's a cycle Edwards hopes to break by scraping together the money for her mortgage payments. She wants to pass her house on to her daughter, so her daughter has the head start Edwards never had.
http://pewhispanic.org/reports/report.php?ReportID=145
All,
Don't look now but the already horrific economic reality is actually FAR WORSE than anything that has been generally reported on over the past three years...A devastating and very depressing confirmation of Maxim One of "Natambu's Law" ("No matter how bad things are or appear to be at any given time one can rest assured that upon further investigation the actual reality is far worse than anything one could possibly imagine." )
Kofi
7.26.2011
The Toll of the Great Recession
Hispanic Household Wealth Fell by 66% from 2005 to 2009
Median household wealth among Hispanics fell from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all racial and ethnic groups, according to a new report by the Pew Research Center's Social & Demographic Trends project. During the same period, median household wealth declined 53% among black households and 16% among white households.
The Pew Research report provides the first look at how the Great Recession impacted household wealth. It finds that plummeting house values were the principal cause of the erosion in wealth among all groups. However, because Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and a disproportionate share reside in states that were in the vanguard of the housing meltdown, Hispanics were hit hardest by the housing market downturn.
The Pew Research analysis also finds that the median wealth of white households is 18 times that of Hispanic households and 20 times that of black households. These lopsided wealth ratios are the largest in the quarter century since the government first published such data, and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession.
These findings are based on a Pew Research Center analysis of newly-available data from the Survey of Income and Program Participation (SIPP), an economic questionnaire distributed periodically to tens of thousands of households by the U.S. Census Bureau. It is considered the most comprehensive source of data about household wealth in the United States by race and ethnicity.
Among the report's other key findings:
About a third of Hispanic (31%) and black (35%) households had zero or negative net worth in 2009, compared with 15% of white households. In 2005, the comparable shares had been 23% for Hispanics, 29% for blacks and 11% for whites.
About a quarter of all Hispanic (24%) and black (24%) households in 2009 had no assets other than a vehicle, compared with just 6% of white households. These percentages are little changed from 2005.
During the period under study, wealth disparities also increased within the Hispanic community. The top 10% of Hispanic households saw their share of all Hispanic household wealth rise from 56% in 2005 to 72% in 2009.
The report, "Twenty to One: Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics," is available on the Pew Social & Demographic Trends website.
All,
Don't look now but the already horrific economic reality is actually FAR WORSE than anything that has been generally reported on over the past three years...A devastating and very depressing confirmation of Maxim One of "Natambu's Law" ("No matter how bad things are or appear to be at any given time one can rest assured that upon further investigation the actual reality is far worse than anything one could possibly imagine." )
Kofi
7.26.2011
The Toll of the Great Recession
Hispanic Household Wealth Fell by 66% from 2005 to 2009
Median household wealth among Hispanics fell from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all racial and ethnic groups, according to a new report by the Pew Research Center's Social & Demographic Trends project. During the same period, median household wealth declined 53% among black households and 16% among white households.
The Pew Research report provides the first look at how the Great Recession impacted household wealth. It finds that plummeting house values were the principal cause of the erosion in wealth among all groups. However, because Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and a disproportionate share reside in states that were in the vanguard of the housing meltdown, Hispanics were hit hardest by the housing market downturn.
The Pew Research analysis also finds that the median wealth of white households is 18 times that of Hispanic households and 20 times that of black households. These lopsided wealth ratios are the largest in the quarter century since the government first published such data, and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession.
These findings are based on a Pew Research Center analysis of newly-available data from the Survey of Income and Program Participation (SIPP), an economic questionnaire distributed periodically to tens of thousands of households by the U.S. Census Bureau. It is considered the most comprehensive source of data about household wealth in the United States by race and ethnicity.
Among the report's other key findings:
About a third of Hispanic (31%) and black (35%) households had zero or negative net worth in 2009, compared with 15% of white households. In 2005, the comparable shares had been 23% for Hispanics, 29% for blacks and 11% for whites.
About a quarter of all Hispanic (24%) and black (24%) households in 2009 had no assets other than a vehicle, compared with just 6% of white households. These percentages are little changed from 2005.
During the period under study, wealth disparities also increased within the Hispanic community. The top 10% of Hispanic households saw their share of all Hispanic household wealth rise from 56% in 2005 to 72% in 2009.
The report, "Twenty to One: Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics," is available on the Pew Social & Demographic Trends website.
Vanessa Vick for the New York Times
A taco restaurant owned by Armando Moya, a Mexican immigrant, in Woodbridge, Va., outside Washington. He opened it in 2005, the same year he bought a house, which he has had to sell.
http://www.nytimes.com/2011/07/26/us/26hispanics.html
Recession Study Finds Hispanics Hit the Hardest
By Sabrina Tavernise
New York Times
WOODBRIDGE, Va. — Hispanic families accounted for the largest single decline in wealth of any ethnic and racial group in the country during the recession, according to a study published Tuesday by the Pew Research Center.
The study, which used data collected by the Census Bureau, found that the median wealth of Hispanic households fell by 66 percent from 2005 to 2009. By contrast, the median wealth of whites fell by just 16 percent over the same period. African Americans saw their wealth drop by 53 percent. Asians also saw a big decline, with household wealth dropping 54 percent.
The declines have led to the largest wealth disparities in the 25 years that the bureau has been collecting the data, according to the report.
Median wealth of whites is now 20 times that of black households and 18 times that of Hispanic households, double the already marked disparities that had prevailed in the decades before the recent recession, the study found.
“It’s a very stark reminder of the high share of minorities who live at the economic margins of this country,” said Paul Taylor, executive vice president of the Pew Research Center and an author of the report. “These data really show their economic vulnerability.”
Household wealth, also referred to in the report as net worth, is made up of assets, like a house, a car, savings and stocks, minus debts, like mortgages, car loans and credit cards. It is tracked by the Census Bureau in the Survey of Income and Program Participation, a broad sampling of household wealth by race and ethnicity.
Nearly two-thirds of Hispanics’ median net worth in 2005 came from home equity, according to the report, and when the housing market collapsed, so did their wealth. Median home equity for Hispanics fell by 51 percent in the period of the survey. The drop was compounded by the fact that Hispanics tended to live in the places that were hit hardest in the recession, like Florida and California, the report said.
Armando Moya, a Mexican immigrant from Woodbridge, outside Washington, experienced these swings of fortune first-hand. For a few happy years, he believed he had avoided his father’s fate of scraping by. He bought a house with a backyard and opened a taco restaurant with his brothers. His bank account was growing, and he took his family on vacations several times a year.
Mr. Moya lives in Prince William County, where the Hispanic population more than tripled from 2000 to 2010, according to the Migration Policy Institute, with many newcomers working in construction trades that were flourishing in the rapidly growing suburbs of Washington.
To capitalize on the influx, Mr. Moya, who is now 38 and had been working in restaurants since he came to the United States in the early 1990s, decided to start his own, and together with his brother opened Ricos Tacos Moya in 2005.
In the same year, he bought a house valued at $350,000. His monthly payments were more than $2,300, and with hungry workers filling his restaurant, he managed.
But when the collapse of the housing market swept like a wave through this Northern Virginia county, taking his house, and his bank account, and many of his customers along with it, he lost his middle-class lifestyle.
“Everything was going down,” he said.
Now he is back where he started, living with his family in a rented apartment, and working seven days a week in the taco restaurant. His house sold for $135,000 to a couple from Morocco, he said.
“My money changed,” he said. “I lost my house.”
The share of Americans with no wealth at all rose sharply during the recession. A third of Hispanics had zero or negative net worth in 2009, up from 23 percent in 2005. For blacks, the portion rose to 35 percent from 29 percent, and for whites, it rose to 15 percent from 11 percent.
About a quarter of all black and Hispanic households owned nothing but a car in 2009. Just 6 percent of whites and 8 percent of Asians were in that situation.
Whites were less affected by the crisis, largely because their wealth flowed from assets other than housing, like stocks. A third of whites owned stocks and mutual funds in 2005, compared with 8 percent of Hispanics and 9 percent of blacks.
The median value of stocks and mutual funds owned by whites dropped by 9 percent from 2005 to 2009. In comparison, the median value of holdings for those blacks who held stocks dropped by 71 percent, most likely because they had to sell when prices were low, Mr. Taylor said.
The median wealth of Hispanic and black households is at its lowest point since 1984, when the Census Bureau first conducted the study, the report said.
Mr. Moya counts himself lucky to still have his restaurant. He has to work weekends at a nightclub in Washington to keep up with his rent. His life is increasingly resembling his father’s — subsisting, without saving — but he has pinned his hopes for a better life on his sons, and he has discarded the idea of returning to Mexico.
“I want my house back,” he said. “I’m working for my house right now.”
This article has been revised to reflect the following correction:
Correction: July 27, 2011
An article on Tuesday about the decline in wealth among Hispanic families misstated the name of the group that published the study detailing the decline. It is the Pew Research Center, not the Pew Foundation.
http://www.nytimes.com/2011/07/26/us/26hispanics.html
Recession Study Finds Hispanics Hit the Hardest
By Sabrina Tavernise
New York Times
WOODBRIDGE, Va. — Hispanic families accounted for the largest single decline in wealth of any ethnic and racial group in the country during the recession, according to a study published Tuesday by the Pew Research Center.
The study, which used data collected by the Census Bureau, found that the median wealth of Hispanic households fell by 66 percent from 2005 to 2009. By contrast, the median wealth of whites fell by just 16 percent over the same period. African Americans saw their wealth drop by 53 percent. Asians also saw a big decline, with household wealth dropping 54 percent.
The declines have led to the largest wealth disparities in the 25 years that the bureau has been collecting the data, according to the report.
Median wealth of whites is now 20 times that of black households and 18 times that of Hispanic households, double the already marked disparities that had prevailed in the decades before the recent recession, the study found.
“It’s a very stark reminder of the high share of minorities who live at the economic margins of this country,” said Paul Taylor, executive vice president of the Pew Research Center and an author of the report. “These data really show their economic vulnerability.”
Household wealth, also referred to in the report as net worth, is made up of assets, like a house, a car, savings and stocks, minus debts, like mortgages, car loans and credit cards. It is tracked by the Census Bureau in the Survey of Income and Program Participation, a broad sampling of household wealth by race and ethnicity.
Nearly two-thirds of Hispanics’ median net worth in 2005 came from home equity, according to the report, and when the housing market collapsed, so did their wealth. Median home equity for Hispanics fell by 51 percent in the period of the survey. The drop was compounded by the fact that Hispanics tended to live in the places that were hit hardest in the recession, like Florida and California, the report said.
Armando Moya, a Mexican immigrant from Woodbridge, outside Washington, experienced these swings of fortune first-hand. For a few happy years, he believed he had avoided his father’s fate of scraping by. He bought a house with a backyard and opened a taco restaurant with his brothers. His bank account was growing, and he took his family on vacations several times a year.
Mr. Moya lives in Prince William County, where the Hispanic population more than tripled from 2000 to 2010, according to the Migration Policy Institute, with many newcomers working in construction trades that were flourishing in the rapidly growing suburbs of Washington.
To capitalize on the influx, Mr. Moya, who is now 38 and had been working in restaurants since he came to the United States in the early 1990s, decided to start his own, and together with his brother opened Ricos Tacos Moya in 2005.
In the same year, he bought a house valued at $350,000. His monthly payments were more than $2,300, and with hungry workers filling his restaurant, he managed.
But when the collapse of the housing market swept like a wave through this Northern Virginia county, taking his house, and his bank account, and many of his customers along with it, he lost his middle-class lifestyle.
“Everything was going down,” he said.
Now he is back where he started, living with his family in a rented apartment, and working seven days a week in the taco restaurant. His house sold for $135,000 to a couple from Morocco, he said.
“My money changed,” he said. “I lost my house.”
The share of Americans with no wealth at all rose sharply during the recession. A third of Hispanics had zero or negative net worth in 2009, up from 23 percent in 2005. For blacks, the portion rose to 35 percent from 29 percent, and for whites, it rose to 15 percent from 11 percent.
About a quarter of all black and Hispanic households owned nothing but a car in 2009. Just 6 percent of whites and 8 percent of Asians were in that situation.
Whites were less affected by the crisis, largely because their wealth flowed from assets other than housing, like stocks. A third of whites owned stocks and mutual funds in 2005, compared with 8 percent of Hispanics and 9 percent of blacks.
The median value of stocks and mutual funds owned by whites dropped by 9 percent from 2005 to 2009. In comparison, the median value of holdings for those blacks who held stocks dropped by 71 percent, most likely because they had to sell when prices were low, Mr. Taylor said.
The median wealth of Hispanic and black households is at its lowest point since 1984, when the Census Bureau first conducted the study, the report said.
Mr. Moya counts himself lucky to still have his restaurant. He has to work weekends at a nightclub in Washington to keep up with his rent. His life is increasingly resembling his father’s — subsisting, without saving — but he has pinned his hopes for a better life on his sons, and he has discarded the idea of returning to Mexico.
“I want my house back,” he said. “I’m working for my house right now.”
This article has been revised to reflect the following correction:
Correction: July 27, 2011
An article on Tuesday about the decline in wealth among Hispanic families misstated the name of the group that published the study detailing the decline. It is the Pew Research Center, not the Pew Foundation.
