No wealth for the weary

A new report shows the Black-White wealth gap keeps growing.

Researchers at Brandeis University compared family net worth (excluding home equity) between 1984 and 2007. They report:

The wealth gap between whites and African Americans increased more than 4 times, from $20,000 to $95,000.

Middle-income white households had greater gains in financial assets than high-income African Americans; by 2007, they had accumulated $74,000, whereas the average high-income African American family owned only $18,000.

In 2007, one in ten African-Americans owed at least $3,600, almost doubling their debt burden since 1984.

At least 25% of African-American families had no assets at all to turn to in times of economic hardship.

The report is not clear on how the data, from the Panel Study of Income Dynamics, are handled. They write that it reflects “the same of families over 23 years (1984-2007),” and “changes in wealth of families headed by an adult (age 25-55) in 1984.” If that’s the case, lots of these folks would have died, family composition would have changed, etc., and they don’t say how all that affects the analysis.

But if I read it right, they break them into income groups based on their 1984 incomes, and track them through the next 23 years. In that case, I’m especially struck by lack of progress among African American families with higher incomes at the start of the period. While the high-income White families saw their net worth increase in the last generation, Black families with higher incomes did not gain ground asset-wise.

The report has references to some of the literature on race and wealth issues, making it a good place to start on the subject.

While we’re on the subject, a little global context. From a 2008 U.N. working paper, per capita wealth circa 2000:

Comparing wealth measuring across societies is hard, especially with exchange rate issues, data quality, etc. This global data, for example, uses means instead of medians, and includes home equity, so the numbers don’t compare to the Brandeis study. But the pattern is good to see anyway.

For a more thorough discussion of the global questions, including but not limited to data issues, there is a new book by  Roberto Korzeniewicz and Timothy Moran — a former professor and classmate of mine from Maryland, respectively — called Unveiling Inequality A World-Historical Perspective. I haven’t read it well enough to write my own blurb yet, but here’s the promo page conclusion:

Korzeniewicz and Moran provide strong evidence that the nation where we are born is the single greatest determining factor of how we will live. Too much sociological literature on inequality focuses on the plight of “have-nots” in wealthy nations who have more opportunity for social mobility than even the average individual in nations perennially at the bottom of the wealth distribution scale. Unveiling Inequality represents a major paradigm shift in thinking about social inequality and a clarion call to reorient discussions of economic justice in world-historical global terms.