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Whites now hold biggest wealth gap ever

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Whites now hold biggest wealth gap ever

WASHINGTON (BDCi) – An analysis from recent United States Census data shows that as a result of the drastic economic downturn, the racial wealth gap between whites and minorities is at its widest in the 25 years it’s been reported.

White Americans are on average worth 20 times the net worth of blacks and 18 times that of Latinos.

The Pew research analysis showed that the average wealth of U.S. white households in 2009 was $113,149, compared with $6,325 for Latinos and $5,677 for blacks.

From 2005 to 2009, all groups’ wealth declined in the double digits percentage-wise, but Whites’ drop was only 16% compared with 53% and 66% for blacks and Hispanics respectively.

The research demonstrates the racial and ethnic impact of this recession, which has reduced housing values and employment rates in large amounts.

The census analysis offers direct government evidence of the vast difference between younger minorities whose main asset is their home and older whites who are more likely to have 401(k) retirement funds or stock holdings.

The white-black wealth gap is at its widest since the census began collecting data in 1984, when the ratio was 12 to 1.

“I am afraid that this pushes us back to what the Kerner Commission characterized as ‘two societies separate and unequal’ ” said Roderick Harrison , a former chief of racial statistics at the Census Bureau, referring to the presidential commission that focused on U.S. race relations during the 1960’s.

“The great difference is that the second society has now become both black and Hispanic.”

The current multiples of 20 to 1 for blacks and 18 to 1 for Latinos are astounding when compared with the lowest ratio recorded – 7 to 1 – that both groups reached in 1995. At that time, the nation’s economic expansion had lifted many low-income groups to the middle class.

Investments play a fundamental role in the economic well being of white households so the analysis suggests. Stocks, IRA, Keogh accounts, 401(k) and savings accounts all make up 28 percent of whites net worth, compared with 19 percent for blacks and 15 percent for Latinos. Whites have benefited from the rebound of the stock market more so than minorities.

Wealth for Latinos increased dramatically up to an average household wealth of $18,359 at the half way point of the last decade. However, gains were soon lost when the construction industry shriveled and unemployment for Hispanics increased dramatically.

Another driver of widening gap per the study is that Latinos were more likely to live in and buy homes in real-estate booming, price-sensitive states such as Arizona, California, Florida, and Nevada. Therefore they were disproportionately hit compared to other races due to the bigger housing price drop in those states.

“It has deep social implications, it has deep political implications.”

By Shayla Selva

Source: Politic365 and Huffington Post

27 July 2011

10:13 p.m. P.D.T.

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