SOC 279: Globalization
Professor Nicole Hala
Audio: "The Wealth Gap," (interview, Mariko Chang, Insight) Brian Lehrer Show, WNYC, NPR,
3/24/2010.
http://www.onthemedia.org./shows/bl/episodes/2010/03/24/segments/152231
Mariko Chang, author of a new report from the Insight center for community economic development.
Chang is also author of the upcoming book, Short-Changed: Why Women Have Less Wealth and What
Can Be Done About It
Wealth vs Income
INCOME: "We're used to thinking about how well people are doing economically in terms of income,
which technically is the flow of money that comes into a household over a period of time. This usually
consists of salary or wages."
WEALTH: net worth, or the value of your assets minus your debts
Assets includes things like money that's held in checking or savings accounts, real estate,
retirement assets, stocks or bonds
Debt includes mortgage debt, credit card debt, and other types of loans
So wealth is determined by how much money you have in assets, subtracting what you owe in debts
How does the GENDER WEALTH GAP intersect with the RACIAL WEALTH GAP?
 Situation of women of color is not the same as for men of color or situation of white women
 Women of color experience a compounding negative wealth effect of being both a person of
color and a woman
We should think in terms of WEALTH instead of INCOME because wealth inequality is much, much greater
than income inequality. An example:
 In 2004, the top 1% of the population earned 17% of the total income but owned 34% of the
total wealth
 The bottom 60% of the population earned 22% of the income but had only 4% of the total
wealth
"So wealth is extremely unequally distributed in our society. And we don't usually think about that
because we don't know much about the wealth of other people. We are used to thinking in terms of
income. But WEALTH has a lot more advantages that income doesn't have."
 Wealth can be used as collateral for loans
 It can generate further income in the form of dividends or rent, for example
 It can be passed down from generation to generation – and this is one of the primary reasons
why we see such a tremendous racial wealth gap
 And as we've seen in the current economic crisis wealth is critical for helping people weather
financial crises such as the one we're having currently, when people lose their jobs or other
circumstances such as medical emergencies when people's jobs are cut or disrupted
Report finds evidence of a GENDER WEALTH GAP and RACIAL WEALTH GAP:
 The median wealth of single black women in the US is $100 and for the typical single
Hispanic women it's $120
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But women of color have only a penny of wealth for every dollar of wealth owned by their
same-race male counterparts, and only a fraction of a penny of wealth owned by white
women
Not only are these figures low in terms of the absolute dollar amount but they are also
extremely low when you compare it to the typical wealth of men of color or of white women
"For every dollar of wealth held by white families, families of color have just 16 cents. It's
called the RACIAL WEALTH GAP and it could be even more important to economic disparities
between communities than differences in wages or education."
Why would the wealth of black women be less than the wealth of black men since we usually hear that
black women are more employed?
"This is one of the more shocking findings, especially for blacks because black women now are
more likely to graduate from college than black men. And in many instances they seem to be
doing better than black men on many measures – so this was particularly surprising to many
people who read the report. But I think what we don't understand is that wealth is created not just
through income. In order to create wealth, you need to be tapping into something that I've termed
the wealth escalator. These are things that translate your income into wealth a lot more quickly.
And women of color are less likely to have access to it."
The wealth escalator consists of three components:
1) fringe benefits (stock options, pensions, 401Ks, paid sick days, etc)
Fringe benefits are things that you would receive as an employee in addition to your
regular pay; they help you hold onto wealth or build more wealth
2) tax code
Tax code helps people build wealth – or prevents people from building wealth – based on
the types of taxes that people pay and the types of tax deductions they're qualified for
3) structure of government benefits
Structure of government benefits like Social Security
"Now even though women of color might be out-earning men of color in terms of college degrees, they're
still less likely to be in the types of jobs that have access to fringe benefits. They are more likely to work
in service occupations, and service occupations are the least likely to have fringe benefits."