A recent Pew Research Center study has highlighted the widening gap in wealth between American Whites and Blacks and Hispanics. It inspired quite a few op-eds on why America isn't "post-racial" enough and why more work must be done.
The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009.
These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession that ended in 2009.
What's most interesting, at least to me, is the Pew Center's conclusion: the gap wasn't increased by a decline in federal employment, nor even corporate layoffs, so much as the housing bust:
The Pew Research analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.
As a result of these declines, the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149.
Moreover, about a third of black (35%) and Hispanic (31%) households had zero or negative net worth in 2009, compared with 15% of white households. In 2005, the comparable shares had been 29% for blacks, 23% for Hispanics and 11% for whites.
Hispanics and blacks are the nation’s two largest minority groups, making up 16% and 12% of the U.S. population respectively.
These findings are based on the Pew Research Center’s analysis of data from the Survey of Income and Program Participation (SIPP), an economic questionnaire distributed periodically to tens of thousands of households by the U.S. Census Bureau. It is considered the most comprehensive source of data about household wealth in the United States by race and ethnicity. The two most recent administrations of SIPP that focused on household wealth were in 2005 and 2009. Data from the 2009 survey were only recently made available to researchers.1
Plummeting house values were the principal cause of the recent erosion in household wealth among all groups, with Hispanics hit hardest by the meltdown in the housing market.
From 2005 to 2009, the median level of home equity held by Hispanic homeowners declined by half—from $99,983 to $49,145—while the homeownership rate among Hispanics was also falling, from 51% to 47%. A geographic analysis suggests the reason: A disproportionate share of Hispanics live in California, Florida, Nevada and Arizona, which were in the vanguard of the housing real estate market bubble of the 1990s and early 2000s but that have since been among the states experiencing the steepest declines in housing values.
Most who have cited the study have blamed evil subprime lenders for the plight of Blacks and Hispanics. Looked at another way, though, it was precisely this kind of affirmative-action lending (which Steve Sailer first talked about in his piece "The Diversity Recession") that was the primary means of racial wealth re-distribution throughout the first half of the 2000s. Taxing rich (mostly White) people, funnelling the money through Washington's massive bureaucratic apparatus, and then issuing it to minorities isn't as effective as, in essence, "financial socialism." America could be made more "post-racial" by giving minorities 30-year mortgages at 20:1 leverage, underwritten by a government agency and packaged as derivatives by Goldman Sachs.
Since it's becoming clear to all that the housing bubble can't be blown up again, a new means of instituting equality will, no doubt, have to be found...