Chart of the Day: Racial Inequality in Wealth over Time

People often talk about income inequality, but wealth inequality is its cumulative effect (compounded by things like real estate value and other assets). When you start talking about wealth, race, and real estate, society get problematic really quickly.

Here’s a chart:

wealth-disparity

This is via some website called datatools:

In 1963, the average wealth of white families was $117,000 higher than the average wealth of nonwhite families. By 2013, the average wealth of white families was over $500,000 higher than the average wealth of African American families ($95,000) and of Hispanic families ($112,000). Put another way, white families on average had seven times the wealth of African American families and six times the wealth of Hispanic families in 2013. The ratio of white to African American or Hispanic family wealth remained extremely high over this period and deteriorated in recent years.

Anyway, many people are left behind in this country, and (IMO) the disparate advantages of home ownership multiplied over time is one big reason why.


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5 Responses to Chart of the Day: Racial Inequality in Wealth over Time

  1. Doug Trumm
    Doug Trumm June 9, 2015 at 11:23 pm #

    Wow that’s staggering! Eliminating or means testing the home mortgage tax deduction would even the playing field perhaps. Or maybe reducing it and adding a rent deduction. Or maybe converting government housing to housing co-ops that are owned rather rented like New York City occasionally does. It’s amazing how much hinges on housing policy.

    • Adam Miller
      Adam Miller June 10, 2015 at 12:09 pm #

      And how big the explicit racial discrimination of the past in housing still looms.

  2. Shawn June 10, 2015 at 10:03 am #

    I found that chart a bit staggering, even though it’s mean instead of mode. I went to find the source data, and it’s legit – in case anyone is curious, I’ll save you the googling:

    http://www.federalreserve.gov/econresdata/scf/scfindex.htm

    Page 56:
    http://www.federalreserve.gov/econresdata/scf/files/BulletinCharts.pdf

  3. Walker Angell
    Walker Angell June 10, 2015 at 4:02 pm #

    If I remember correctly it was very different in the 40’s and 50’s and up until the mid to late 60’s with non-whites closing the gap rather than the gap widening. What caused the change?

    • Adam Miller
      Adam Miller June 10, 2015 at 4:42 pm #

      I’ve seen it alleged that it’s largely the effect of redlining. White people got mortgages, moved to the suburbs, and got relatively rich off the appreciation in their home values.

      Housing policy and bank practices denied that path to black people (and maybe people of color more broadly?).