“SHADES OF WEALTH” IN COMMUNITIES
OF COLOR
THE AFTERMATH OF THE THE GREAT
RECESSION, SOME PRELIMINARY RESULTS
Project P.I.’s
William Darity, Jr. and Darrick Hamilton
THE IMPORTANCE OF WEALTH
• Wealth indicates economic opportunity, security
& overall wellbeing
• The economic indicator in which whites &
communities of color are most disparate
• Primary source is intergenerational – Structural
not behavioral
THE GREAT RECESSION AND THE
RACIAL WEALTH GAP (SIPP DATA)
3
MEDIAN LIQUID ASSET VALUE:
ASSETS EASILY CONVERTED TO CASH
(SIPP 2011)
Median Liquid Wealth Holdings, 2011 SIPP
INCOME DOES NOT EXPLAIN THE GAP
(SIPP 2011)
SHARE OF HOUSEHOLDS WITHOUT
TANGIBLE OR FINANCIAL ASSETS
(SIPP 2011)
LESSONS LEARNED
1 Black & Latino families have little liquid assets to
take risk, or deal with financial emergency or shocks
2 Communities of color suffered the most
• The racial wealth gap was extreme before the
recession, and worsened after
3 Black & Latino families recovered a meager penny
during the recovery
• The share of black and Latino wealth per dollar in
white wealth rose from 5 and 6 cent per dollar in
white wealth to 6 and 7 cents, respectively
4 Asians suffered the largest absolute loss in home
values and wealth
• Most likely to reside in states that benefited from the
housing boom & suffered most from the housing bust
AN INCOMPLETE NARRATIVE
Asset markets are local
– e.g. the geographic maldistributive effects of
the housing crisis
The wealth position of many communities of
color remains unknown
– Aggregate categories like “Asian” mask the
asset position for certain groups like those
immigrating from Southeast Asia
– Indigenous groups are often hidden altogether
in nebulous catchall category of “other”
NATIONAL ASSET SCORECARD & COMMUNITIES OF
COLOR
• Assembled a multidisciplinary & ethnically
diverse team with expertise in wealth and ethnic
studies
• Implemented a pilot survey to compare specific
groups within urban contexts to:
1. provide implicit control of asset and debt
pricing and products
2. analyze the wealth of groups hidden in broadly
defined “non-white” categories
3. examine asset and debt attributes particular to
communities of color
4. demonstration (template) for national surveys
• Limitations: (1) Statistical Power, (2) External
validity and (3) Examines only Private Assets
SOME PRELIMINARY LESSONS ACROSS
FOUR CITIES
• Variation within broadly defined ethnic categories
• Income inequality pales in comparison to wealth inequality
• Racial wealth gap persists across tangible and financial assets
• An ethnic group’s relative asset position may vary across city
=> potential for selection
• Homeownership varied across city and may not be the only
driver of wealth
• Substantial asset variation across and within cities with Blacks
and Mexicans persistently at the bottom
RHETORIC
“We are post-racial”
America has largely transcended the racial divide
A shift from social responsibility to individual responsibility
amongst the subaltern group itself
Unprivileged groups are enjoined to;
“get over it”
“stop playing the victim role”
“stop making excuses”
“take personal responsibility”
We need bold substantive policies that are opportunity enhancing
and economically inclusive, not paternalistic policies aimed at
changing the norms and behaviors of economically
disenfranchised groups
13
A PROPOSED SOLUTION
Baby Bonds
Universal gradationally endowed trust accounts at
birth
Close the racial wealth gap in 2 to 3 generations
for about 2% of current federal expenditures per
annum
Brake the cruel links between race, inheritance, &
economic advantage/disadvantage – opportunity
for upward mobility & economic security for all
14
ACKNOWLEDGEMENTS
Special(Thanks(for(their(Generous(Support(
(
Funder(
The$Ford$Foundation$
Building(Economic(Security(Over(a(Lifetime(
Kilolo$Kijakazi,$Program$Officer$
$
Federal$Reserve$Bank$of$Boston$
Ana$Patricia$Munoz,$Deputy$Director,$Research$and$Communication$
(Supplemental$Funding$to$Survey$Boston$with$the$Ford$Foundation)$
National Asset Scorecard and Communities of Color
Project Administration
Research Center
Duke Consortium on Social Equity
The Research Network on Racial and Ethnic Inequality
Principal Investigators
William “Sandy” Darity, Jr. (Duke University)
Darrick Hamilton (The New School)
Project Administrative Director
Gwendolyn Wright (Duke University)
National Asset Scorecard and Communities of Color
Research Team
Kobi Abayomi (State University of New York, Binghamton)
Randall Akee (University of California, Los Angeles)
Cruz Caridad Bueno (Siena College)
Mariko Chang (Independent Consultant)
Melany de la Cruz (University of California. Los Angeles)
William “Sandy” Darity, Jr. (Duke University)
Thomas Guterbock (University of Virginia)
Darrick Hamilton (The New School)
Regine O. Jackson (Agnes Scott College)
Sarah Kastelic (National Indian Child Welfare Association)
Marlene Kim (University of Massachusetts, Boston)
Patrick Mason (Florida State University)
Paula McClain (Duke University)
Yunju Nam (State University of New York, Buffalo)
Janneke Ratcliffe (University of North Carolina, Chapel Hill)
Paul Ong (University of California, Los Angeles)
Rhonda Sharpe (Duke University)
Sue Stockly (Eastern New Mexico University)
Rebecca Tippett (University of North Carolina, Chapel Hill)
Beyond Broke Report
Rebecca Tippett (University of North Carolina, Chapel Hill)
Avis Jones DeWeever (Incite Unlimited)
Maya Rockeymoore (Center for Global Policy Solutions)
Darrick Hamilton (The New School)
William “Sandy” Darity, Jr. (Duke University)
Other Collaborative Institutional Partners
Center for American Progress
The Corporation for Enterprise Development
Demos
The Federal Reserve Bank of Boston
Insight Center for Community Economic Development
Institute of Applied Social Studies, University of Birmingham, UK
Global Policy Solutions
Schwartz Center for Economic Policy Analysis, The New School
United for a Fair Economy
UCLA, Asian American Studies Center
Others TBA
National Asset Scorecard and Communities of Color
Research Team
Kobi Abayomi (State University of New York, Binghamton)
Randall Akee (University of California, Los Angeles)
Cruz Caridad Bueno (Siena College)
Mariko Chang (Independent Consultant)
Melany de la Cruz (University of California. Los Angeles)
William “Sandy” Darity, Jr. (Duke University)
Thomas Guterbock (University of Virginia)
Darrick Hamilton (The New School)
Regine O. Jackson (Agnes Scott College)
Sarah Kastelic (National Indian Child Welfare Association)
Marlene Kim (University of Massachusetts, Boston)
Patrick Mason (Florida State University)
Paula McClain (Duke University)
Yunju Nam (State University of New York, Buffalo)
Janneke Ratcliffe (University of North Carolina, Chapel Hill)
Paul Ong (University of California, Los Angeles)
Rhonda Sharpe (Duke University)
Sue Stockly (Eastern New Mexico University)
Rebecca Tippett (University of North Carolina, Chapel Hill)
APPENDIX