By Gabrielle Pfafflin
The PEW Research Center released a report Tuesday indicating a record high racial disparity among household wealths in the years surrounding the market crash in 2008.
The report calculated median household incomes, adjusted for inflation and household debt, in the years 2005 and 2009. Considering the adjusted wealth, it reported in the first line that, “the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households.”
PEW claims that these wealth disparities are the highest on record since PEW began researching 25 years ago.
According to PEW, the recession hit minorities in the U.S especially hard. It indicates that from 2005 to 2009 the median wealth in hispanic households plummeted by 66%. The median wealth in black households fell 53%, while only falling 16% among white households.
Researchers speculated that the dramatic decrease in median incomes resulted directly from the housing bubble burst in 2006, a dramatic loss in home values, especially in minority communities, and a severe increase in personal debt. They also considered sociological finance trends.
According to the report, white households proportionally own more stocks, 401(k)s, and individual retirement accounts (IRAs), which regained lost wealth by mid to late 2009. Contrastingly, black and hispanic households proportionally retain wealth in property values that have yet to regain lost value.
It should be noted that wealth differs from income. Adjusted wealth amounts to the household debt like mortgages, loans, and credit card debt subtracted from household assets such as homes, cars, stocks, and savings. Adjusted household income measures the flow and influx of wages, interests, and profits.
To read the full report click HERE