This Urban Institute report regarding wealth disparities and race/ethnicity is getting a lot of attention. Unfortunately, the report manipulates statistics to push a dubious conclusion, instead of emphasizing a progressive message that actually is supported strongly by the same numbers it quotes.
The report’s evidence for its claim that disparities in wealth are growing between whites on the one hand, and blacks and Hispanics on the other, is that the ratio in “average” wealth between white families and black and Hispanic families grew from around five to one to six to one between 1983 and 2010. The average white family had a net worth of around $290,000 in 1983, while black and Hispanic families had average net worth totals of around $60,000. By 2010 the average white family had a net worth of $632,000, while black and Hispanic families had average net worth totals of $98,000 and $110,000 respectively. (All figures are in 2010 dollars).
But if you take a look at the footnotes, specifically footnote 3, you discover the following: the median white household’s wealth has gone from $91,000 in 1983 to $124,000 in 2010, while the median figures for black and Hispanic households have gone from $11,000 to $16,000 and $10,000 to $15,000 during that time frame. (In other words, while median family wealth grew by 36% among white families, it increased by 45% and 50% among black and Hispanic families).
This tells us two things:
(1) While it’s true the disparities in wealth between white families and non-white families (excluding Asian-Americans) remain immense, they are, on a percentage basis, actually declining between most American families of different racial and ethnic backgrounds, since of course the median figures are far more representative of the economic circumstances of most Americans than the mean numbers.
(2) For all races/ethnic groups, the differences between the medians and the means are extraordinary. Consider how much wealth must be piled at the very top of the social pyramid to produce a situation in which the “average” white family is now more than five times wealthier than the median white family. Meanwhile, the comparable ratios for “average” and median black and Hispanic families are even higher than among white families, and have also widened significantly over the past 27 years.
What these statistics really show is that the rapid growth in wealth disparities in this country have little if anything to do with race, and everything to do with class.