The Great Recession widened the wealth gap between whites and minorities in the US, according to [pdf] a new report from the Urban Institute. Between 2007 and 2010, Hispanic families lost 44% of their average wealth (measured as total assets minus total liabilities and debts), compared to a 31% loss for blacks and a relatively more modest 11% decline for whites. Hispanics were particularly hard hit by the real estate collapse, with their average home equity plummeting by 49%. Blacks (-28%) and whites (-24%) were less affected, though by a similar amount.
Interestingly, the picture is different when it comes to retirement assets. Between 2007 and 2010, blacks saw their retirement assets fall the most, by 35%. That’s twice as steep a decline as experienced by Hispanics (-18%). Whites, though, actually saw their retirement assets increase during the period, by 9%.
In other analysis contained in the study, the researchers reveal that high-wealth families (top 20% by net worth) enjoyed an average increase in accumulated wealth of close to 120% between 1983 and 2010. By comparison, middle-wealth families saw an increase of just 13% during that 25+ year timespan, while the lowest-wealth families (those in the bottom 20%) saw their wealth turn negative, indicating that debts exceeded assets on average.
Interestingly, while whites’ average income in 2010 was almost twice that of blacks and Hispanics ($89,000 vs. $46,000), whites had more than 6 times the wealth of blacks and Hispanics (an average of $632,000 versus $103,000). That gap is even greater at the median, with whites’ wealth 8 times greater than that of blacks and Hispanics.
Despite the growing wealth gap, demographic trends mean that over their remaining lifetimes, Hispanic households will actually outspend white households, according to a recent Geoscape report.