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Wealth Gap Is Growing Between Hispanics, Whites
Recent recession has made it larger, Pew study says
By JENALIA MORENO
18 October 2004
Not likely if you are Hispanic, according to a study by the Pew Hispanic Center. The wealth gap between Hispanics and whites is growing, and the recent recession made it even larger, a study released today by the center found.
The study focused mostly on the net worth of Hispanic households between 1996 and 2001, but it also found a growing wealth gap between blacks and whites.
The median net worth of Hispanic households in 2002 was $7,932 and for blacks it was $5,988, according to the study. By comparison, the median net worth for white households was $88,651 in 2002, says the Washington, D.C.-based group that's supported by The Pew Charitable Trusts.
Minorities found their wealth deteriorating during the 2001 recession, which stretched from March to November 2001, and they took longer to recover from the economic downturn.
Between 1999 and 2001, the net worth of Hispanics and blacks fell by 27 percent, while the net worth for whites increased by 2 percent during the same time, as many minorities found themselves out of work.
"The last several recessions have typically been hardest on people in the bottom half of the labor force, both in terms of the duration of unemployment and the severity of it," said Roberto Suro, director of the Pew Hispanic Center. "You see the unemployment rate for blacks and Hispanics early, and they recover late."
There are a variety of reasons for the gap, including that minorities still face barriers to homeownership, and whites are more likely to own homes.
"They don't have that house with the white picket fence," an image associated with achieving middle-class status, Suro said.
Hispanics are also young and not as highly educated as the rest of the population, said Suro. They also are concentrated in high-cost areas, such as New York City and Los Angeles, making homeownership less attainable.
But the homeownership gap could shrink as more Hispanics settle in areas with lower costs of living, such as Raleigh, N.C., Omaha, Neb., and Nashville, Tenn., the study found.
Hispanic immigrants also tend to share their wealth. More than 10 million Hispanic immigrants living in the United States sent more than $30 billion to their families back home. That's about $2,500 per year for each Hispanic household in the United States. While saving that money would help, it wouldn't close the wealth gap.
"They may be building wealth abroad to some extent," said Rakesh Kochhar, senior research associate at the center, "but even if they brought all of that wealth back, there would still be a gap."
The study also found that Cuban immigrants have the most wealth, with a net worth of $39,787, while Central American and Caribbean immigrants had the least net worth, with $2,508 in wealth in 2002.