A new report by the Center for Global Policy Solutions on the widening wealth gap has many sounding alarm bells.
In Beyond Broke: Why Closing the Racial Wealth Gap is a Priority for National Economic Security, researchers used the Census Bureau’s Survey of Income and Program Participation (SIPP) and the National Asset Scorecard in Communities of Color (NASCC) data to explore the state of America’s wealth gap.
Beyond Broke takes an in-depth look at both housing and liquid wealth and finds that disparities exist across all races. According to the report, 67 percent of African-Americans and 71 percent of Latinos are considered “asset poor” and “do not have cash or assets readily converted into cash that will cover their basic living expenses if they are without income for three months.”
“When it comes to the racial gap in liquid wealth, African-Americans and Latinos are nearly penniless,” the report states. “The median liquid wealth of Whites is over 100 times that of Blacks.”
Beyond Broke also notes Latinos have a median liquid wealth of a $340 with Blacks clocking in at just $200, compared to $23,000 in liquid wealth by Whites and $19,500 held by Asians. Moreover, African-Americans and Latinos are twice as likely than Whites to hold no financial assets at all.
Other findings include:
- Between 2005 and 2011, the median net worth of households of color remained near their 2009 levels, reflecting a drop of 58 percent for Latinos, 48 percent for Asians, 45 percent for African-Americans but only 21 percent for whites.
- Asians and Latinos are twice as likely to live in a state hardest hit by the housing crisis.
- Hispanic households experienced the largest drop in net worth following the recession.
- More than half of whites own four or more tangible assets, compared to 49 percent of Asians and only one in five of African-Americans and Latinos.
- For most African-Americans and Latinos, checking accounts are their only liquid asset.
- African-Americans (38 percent) and Latinos (35 percent) are over twice as likely as whites (13 percent) to hold no financial assets at all and to have no or negative net worth.
During a recent press conference, Congressman Keith Ellison of Minnesota blamed the gap on tax policies that aid the rich, and Maryland Congressman Elijah Cummings warned that if we don’t correct the disparities the American economy will fall apart.
“If you have the majority in this country who are not earning enough money to take care of their families, who are not earning enough to create a savings account and don’t have pensions, who’s going to buy the refrigerators, who’s going to buy the curtains who’s going to buy the cars?”
Cummings added: “We have to make sure that America understands that this is not just a minority problem, this is an economic security problem. If you cut that many people out of the economic mainstream, your country will literally collapse.”