FairEconomy.org: Federal Reserve: Racial Wealth Gap Has Grown

Federal Reserve: Racial Wealth Gap Has Grown

by Betsy Leondar-Wright
March 7, 2003

Every three years, the Federal Reserve conducts the Survey of Consumer Finances. It is the only large survey of net worth in the U.S.

The last survey was conducted in 2001, and the results have recently been released. The 2001 survey consisted of interviews with 4,449 families about their income, their assets, and their debts. Researchers asked people’s ethnic group, but data released so far covers only two categories: “White non-Hispanic” and “Non-white or Hispanic,”

From 1998 to 2001:

Families of color gained only $100 of median financial assets in those three years, compared with $5,800 gain for white families.
The net worth of typical families of color fell 4.5% to $17,100, while white families' net worth rose 17% to $120,900.
Overall the gap between the net worth of typical white families and families of color grew by 21% over those 3 years.
Families of color added $3,100 of debt (an 18% increase) while white families added only $1,300 (a 3% increase).
Stock ownership reached a few more people of color. But the typical shareholder of color owned $1,800 less stock at the end of the 3 years than the beginning; the typical white shareholder owned $200 more.
The same pattern held for retirement accounts such as 401(k) plans and IRAs. Among people of color, the typical retirement account fell 30% from $14,200 to $10,000. Meanwhile, the typical retirement account for whites rose 24% from $28,300 to $35,000.

The story in numbers

Median Net Worth (assets minus debts)
	1998	2001	% Change
People of color	$17,900	$17,100	– 4.5%
White people	$103,400	$120,900	+ 17%

Median Financial Assets (Money, stocks, bonds, etc. Excludes real estate, vehicles, businesses, art, jewelry, collectibles, etc.)
	1998	2001	% Change
People of color	$7,100	$7,200	+ 1%
White people	$32,700	$38,500	+ 18%

Median Non-financial Assets (Real estate, vehicles, businesses, art, jewelry, collectibles, etc. Excludes money, stocks, bonds, etc.)
	1998	2001	% Change
Families of color	$47,000	$56,800	+ 21%
White families	$157,900	$183,900	+ 16%

Median Debt (amount owed)
	1998	2001	% Change
Families of color	$16,900	$20,000	+ 18%
White families	$43,200	$44,500	+ 3%

Percent Owning Stock Directly (not in pension plans)
	1998	2001	% Change
Families of color	9.1%	11%	+ 21%
White families	22.1%	24.5%	+ 11%

Median Value of Stock Owned
	1998	2001	% Change
Families of color	$9,800	$8,000	– 18%
White families	$21,800	$22,000	+ 1%

Changes over the past 9 years

Median Net Worth
	1995	1998	2001	$ Change 1995-2001	% Change 1995-2001
Families of color	$18,300	$17,900	$17,100	– $1,200	— 7%
White families	$88,500	$103,400	$120,900	+ $32,400	+ 37%

Median Income
	1995	1998	2001	$ Change 1995-2001	% Change 1995-2001
Families of color	$23,000	$25,400	$25,700	+ $2,700	+ 12%
White families	$38,200	$41,100	$45,200	+ $7,100	+ 18%