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Oct 22, 2004 7:27 pm

Is the Gap Between Rich and Poor Getting Wider?

Griff Witte and Nell Henderson, in the Washington Post (Oct. 18, 2004):

[A]ccording to a report to be released today by the Pew Hispanic Center....

As of 2002, the latest year for which data are available, the median Hispanic household had a net worth of $7,932 and the median black family had $5,998, meaning that half of the households in those groups had less and half had more. The median white family, by contrast, had more than 10 times either amount -- $88,651. Nearly a third of blacks and over a quarter of Hispanic households had zero or negative net worth in 2002, compared with 13 percent of whites.

The net worth of Hispanic and black households fell 27 percent from 1999 through 2001, while white household wealth rose 2 percent during the same period, the survey found. The losses erased many of the gains blacks and Hispanics had made during the boom of the late 1990s, and they left them less of a cushion to ride out future downturns, according to the report. "The recession and jobless recovery had enormous costs," said Roberto Suro, director of the non-partisan Pew Hispanic Center. "They wiped out a lot of gains."

In 1999, before the recession hit, the median Hispanic household had a net worth of $10,495, the median black household had $8,774 and the median white household had $86,370, according to the center. That was a gain since 1996 for every group.

In 2002, white families' median net worth was up $2,281 from 1999 and $13,169 from 1996. Hispanic households' median worth stood at $7,932, $1,000 more than before the boom, but down from 1999. Black families had about $1,000 less than in 1996.

The report was based on Census Bureau surveys in which people were asked about their assets and their debts. Net worth, or wealth, represents the difference between the two. Asian American families were not included in the study, but Rakesh Kochhar, an economist at the Pew Hispanic Center and the report's author, said their wealth levels tend to be above those of blacks and Hispanics but below those of whites.

While black and Hispanic households earn about two-thirds as much money as white households, they tend to have a disproportionately smaller share of assets in the form of savings accounts, stocks, and, perhaps most importantly, homes.

"We have made some progress toward closing the income gap," said Lawrence Mishel, president of the Economic Policy Institute, a labor-oriented research organization. "It will take many decades, at the rate we're going, to make any substantial progress toward closing the wealth gap." ...

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