Economic recovery is unequal: Wealth gap widens between whites and minorities
The Canadian dollar appears in this undated file photo. (Jonathan Hayward / THE CANADIAN PRESS)
PORTLAND, Ore. -- The economic recovery has not been equal among the races, according to a Pew Research Center study released Friday.
The study found that the wealth gap between white households and minorities has widened in recent years.
The wealth of white households was 13 times greater than that of black households in 2013, versus eight times the wealth in 2010. And the wealth of white households was more than 10 times that of Hispanic households, up from nine times the wealth in 2010.
Pew researchers -- analyzing data from the Federal Reserve's Survey of Consumer Finances-- found that the gap between whites and blacks has reached its highest point since 1989. The wealth ratio for whites-to-Hispanics is at a level not seen since 2001.
Net worth is a measure of the difference between the household's assets and their liabilities. The typical household had a net worth of $81,400 in 2013, according to the Fed's survey.
The recession was universally hard on American families as a stock market crash and plunging house prices ate into their net worth. From 2007 to 2010, the median net worth of American families fell 39 per cent.
But this is the first time researchers have been able to look closely at the impact of the economic recovery on households.
"I think this strikes on what many people have felt, the slow and uneven nature of the recovery," said Rakesh Kochhar, one of the study's authors.
Researchers say a number of factors may be responsible for the widening gap: falling income, lower savings rate and different asset holdings.
The median income in minority households fell 9 per cent from 2010 and 2013, versus a 1 per cent drop in white households. And in turn, researchers say, minority households may have either been forced to draw down from savings to get by or were unable to replenish their savings as much as white households.
Additionally, certain financial assets, such as stocks, recovered more quickly than housing since the recession ended. And white households are more likely than minorities to own stocks, putting them in a better position for a recovery.
Still, the researchers say that income has been under pressure across the races.
"It's been almost a decade now since the typical American has seen an increase in income," Kochhar said. "It's really historical in the duration of time that incomes have not risen."