African Americans, Hispanics and individuals without a college degree saw the largest gains in wealth since 2013, the Federal Reserve revealed on Wednesday. That said, the improvements did little to eliminate the inequality gap.
The share of America’s income held by the top 1% of households reached 24% in 2016, which is a record high, and the median net worth of white American households is currently $171,000, nearly 10 times higher than for black households.
Black families went from earning $13,600 in net worth in 2013 to $17,600 in 2016, which is a gain of 30%. Hispanic households went from $14,200 to $20,700, which is a 46% increase. It is important to highlight net worth includes all the assets a family owns including homes, vehicles, savings accounts, retirement funds, and stock funds. Ultimately, non-white employees were able to find jobs, save money, and pay off their debt. Many states who raised the minimum wage in recent years also gave a boost to low-skilled workers in fast-food and retail jobs.
Despite the larger percentage gains, the median net worth is still below $21,000. Among the factors that contribute to disparities in net worth include homeownership rates, retirement savings, and student debt. More than 70% of white households own their homes, while less than 50% of black and Hispanic families do not. 60% of white families report having a retirement savings account, which is 200% of black and Hispanic families. Not to mention, White families are twice as likely to own a business.
Black families are mostly affected by student loans, with 31% of black households report having student loan debt, in comparison to 20% of Hispanics and whites.
Moreover, the Federal Reserve Report suggest a robust economy has benefited all economic groups. But, the wealthiest and most educated were in a position to gain the most because they have an advantage over the poor and uneducated.
Overall, the gains of the past three years show a dramatic change from the 2010 and 2013, when wealth fell for all minority groups except for whites.