As my mother often says, when America catches a cold, Black folks get the flu. Further evidence of such comes from a recent Pew study which has revealed the tremendous impact of the recession and housing crisis on African-American families.
In 2009, the average White family had wealth that was twenty times greater than that of the average Black family and eighteen times that which Hispanic families reported.
The numbers are astounding. The average wealth of a white family ($113,149 in net worth) in 2009 was 20 times greater than that of the average Black family ($5,677 ), and 18 times greater than the average Hispanic family ($6,325). This gap is the largest in over twenty years and has doubled since the start of the recession.
The study authors say that White households fared better in the financial crisis because they were in a stronger position to begin with. Most minority wealth came from home ownership; when the housing bubble burst, their net worth went with it. According to the study, Hispanic families lost two-thirds of their wealth between 2005 and 2009; Black families lost half. Whites, who had diverse sources of wealth including more money in stocks, mutual funds and pension plans, lost only 16 percent on average.
Many minority families were forced to tap into pension funds or savings to pay bills during the recession. In 2009, one third of Black and Latino families had zero or negative net worth. The future remains bleak, as minority families now have less money to invest in education and business ownership, which contribute to long-term wealth, as well as needed money for existing bills and health care expenses.