In case you somehow harbored the notion that the other half doesn’t live differently than the rest of us, an eye-opening report released by the Insight Center for Community Economic Development, “Lifting as We Climb,” analyzes a topic that too often gets short shrift, the net worth, or “wealth” of the lower economic strata. The media (to the extent it has taken up the issue of income inequality) has focused on the rising concentration of income and assets at the very top, and less attention has gone to the obverse side of this coin: the relative decline of the standing of lower ranks.
This study drew on the 2007 Survey of Consumer Finances, which is conducted one in every three years and is considered one of the most relaible sources of information on wealth disparities. The analysis uses the same definition of net worth as the Federal Reserve does. The report notes:
While the 2007 data is the most recent release of the SCF to date, it is important to take into consideration that most of the data were collected prior to the economic downturn and therefore present a more favorable portrait of levels of wealth than is likely to be the case currently. Nonetheless, the overall patterns depicted with respect to wealth of whites versus non-whites are likely to hold. If anything, the portrait of wealth holdings for people of color is likely to be less favorable today than it was in 2007 since people of color hold greater amounts of their assets in homeownership (see Table 4) and communities of color have been hardest hit by the foreclosure debacle. Therefore, the data provides a “conservative estimate” of the current wealth holdings for women of color.
Here is the punch line:
However, while white women in the prime working years of ages 36-49 have a median wealth of $42,600 (still only 61% of their white male counterparts), the median wealth for women of color is only $5.
Once they get past their childbearing/rearing years, single black women do better. Their net worth rises to nearly $60,000 for the 50 to 65 cohort. But single white women show a greater increase in net worth across the two age groups, of nearly $70,000.
One of the few papers to pick up this story, the Pittsburgh Post-Gazette (hat tip reader John D) add some more disheartening factoids:
Black women, in general, were more likely to have participated in the subprime loan crisis with upper-income black women being five times more likely to have received a high-cost mortgage than upper-income white men.
“The popular image is they spend too much, which is the reason they are running up credit card and consumer debt, but the cost of living has risen faster than income, and they need to go into debt for basic daily necessities,” Ms. Lui said. “It’s compounded because unemployment is twice as high in the black community than it is in the white community.”
Huffington Post has a short write-up by a project manager at the Insight Center, but that is the sort of exception that serves to prove the rule, that of lack of media interest in the fate of the poor and near poor.
On a separate but related sighting, The Big Picture’s post ” An Epidemic of Laziness?” takes issue with the idea that extending unemployment insurance creates a disincentive to find work, when the fact that there are more than five job-seekers for every opening would seem to be a more significant impediment. The comment stream at points veers into vitriol
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The only way to help these women is to give even larger bonuses to the bankers. It will work. It’s magic. Just hand over the money or people will get hurt.