Money Matters - Simplified

Wealth gap widens between races -- Pew

The jobless rate is 16.2 percent among the blacks which is double the rate of unemployment among the whites. Similarly, among Latinos the unemployment rate is 50 percent higher.

A report by Pew Research Center reveals that the Anglo families are wealthier compared to the Black or Latino families.

According to the report, white families are 20 times richer than the black families and 18 times wealthier than the Hispanic households.

Minorities felt brunt of economic slowdown
The report, based on findings on the last year’s census data, found that asymmetrical wealth ratio has touched its highest level since the last 25 years.

Experts have been warning for long about the disparities between the different races.

The reasons for this vast disparity are largely historical. Blacks and the Hispanics started with so little wealth that the Anglos.

The economic slowdown made things worse for the minorities. Pew report pointed that as most of the Latinos lived in states like Florida, Nevada, Arizona and California, where the home prices saw a drastic fall during the recession. The minorities were targeted for subprime loans too.

“A lot of our minorities were working, maybe working in jobs where they didn’t have the opportunity to put money away for retirement. A lot of their wealth is rally tied up in the home that they own.” --Mike Toleda, executive director of the Reading’s Hispanic Center

These communities found it harder to get work after the end of the recession. Unemployment is another factor for wealth disparity, claimed the Pew report.

The jobless rate is 16.2 percent among the blacks which is double the rate of unemployment among the whites. Similarly, among Latinos the unemployment rate is 50 percent higher.

This lack of employment opportunities coupled with little wealth to start with, is the reason behind the widening wealth gap. This leaves around 30 percent population from these communities with no or negative net worth.

Lack of investment
Mike Toleda, executive director of the Reading’s Hispanic Center said that he is not surprised with the findings of the Pew report.

“A lot of our minorities were working, maybe working in jobs where they didn’t have the opportunity to put money away for retirement. A lot of their wealth is really tied up in the home that they own.”

Toledo, who has 15 years of experience as a banker, said that the solution is to diversify the investment.

“Do your homework around the different investments that are available outside of investing it in your home in putting together a wealth plan for you and our family,” suggested Toledo.