Last Call For Finding The Problem

The Pew Charitable Trusts put out a survey last month on American household debt.  The figures are pretty shocking by generation (Gen Xers like myself owe six figures as a median point) but they are even worse by race and income.

The substantial wealth gap between white families and families of color has been well documented by researchers. According to the Pew Research Center, white families had a net worth in 2013 that was 13 times more than that of black families and 10 times higher than that of Hispanic families. Net worth comprises assets and debt, so the racial wealth gap can be understood by examining each component individually. 

Among respondents to Pew’s Survey of American Family Finances, black and Hispanic households are as likely to have debt as white households. However, white households’ median debt is more than twice as big (Table 1) and differs in important ways from that of families of color—for example, including more mortgage debt—which often helps white households build even greater net worth. 

White households also typically hold more assets than black and Hispanic households. The typical white household has nearly seven times more assets than black households and over three times more than Hispanic households. These differences are magnified among low income households: The typical white household making less than $40,000 a year has nearly 18 times more assets than black households at the same income bracket and seven times more than Hispanic households. Because of its low asset holdings, the typical lower-income black household has no net worth. At a fundamental level, the racial wealth gap is about a lack of assets in black and Hispanic households, rather than an abundance of debt. 

Let's rewind that statement.

The typical black household with income less than $40,000 has no net worth.



None.

Compare that to the typical white family with income less than $40,000, which still has a net worth of $22,200.

Your typical black person, with all levels of income included, has a net worth of just $6,000.

The system is designed to keep black America poor and always has been.