By Ralph De La Cruz
Florida Center for Investigative Reporting
Everybody’s hurting. But, as usual, the level of hurt isn’t quite equal.
Last week, the Pew Research Center released a study that looked at how white, black and Hispanic households have weathered the current financial storm.
All groups experienced significant drops from 2005 to 2009, the years looked at by Pew. But a particularly steep tumble by black and Hispanic households has pushed the wealth gap to the highest level since the U.S Census began breaking down information by ethnicity.
The median net worth of white households was 19 times greater than that of black households and 15 times greater than Hispanic households. Asian families’ net worth actually had the steepest drop, from $168,103 (which led all groups in 2005) to $78,066 – still almost 13 times greater than Hispanics.
When the groups were first compared in 1984, white households’ net worth was 12 times that of blacks and eight times greater than Hispanic households.
That the gap has widened shouldn’t be too much of a surprise, given that blacks and Hispanics have historically struggled to keep up with the economic gains of whites. Because of that economic head start, whites have a higher level of participation in the stock market, which has performed much better in the four-year period than real estate and other investments. In the last six months of 2009, Businessweek points out, the Standard & Poor’s 500 Index climbed 21 percent.
Time magazine notes that, “the demographic groups that have perhaps lost the most in the Great Recession are two that historically lag behind the rest of the country on key financial issues like income, savings and percentage of homeownership: African-American and Hispanic households.”
The last ones lifted are typically the first ones to fall.
And nowhere is that more evident than in the housing market.
“From 2005 to 2009, the median level of home equity held by Hispanic homeowners declined by half — from $99,983 to $49,145 — while the homeownership rate among Hispanics was also falling, from 51% to 47%,” read the Pew report. “A geographic analysis suggests the reason: A disproportionate share of Hispanics live in California, Florida, Nevada and Arizona, which were in the vanguard of the housing real estate market bubble of the 1990s and early 2000s but that have since been among the states experiencing the steepest declines in housing values.”
The effect of the nation’s real estate woes is exacerbated for Hispanics by the fact that, as Dan Fastenberg reminds us on AOL.com, blacks and Hispanics are concentrated in manufacturing and construction – two industries particularly hard hit in this recession.
So a widening of The Gap during a real estate meltdown really shouldn’t come as a surprise.
But even if the gap isn’t surprising, the median net worth of black and Hispanic families should be.
The average white household had a net worth of $113,149. The typical Hispanic family’s net worth was $6,325, and it was just $5,677 for black households. That’s a total net worth of about $6,000 per family. And a third of black and Hispanic households had zero or negative net worth.
And remember that those figures are from 2009, when states such as Florida were just beginning to really feel the collapse.
Roderick Harrison, a former chief of racial statistics at the Census Bureau told the Associated Press: “I am afraid that this pushes us back to what the Kerner Commission (a 1960s presidential commission that examined U.S. race relations) characterized as ‘two societies, separate and unequal. The great difference is that the second society has now become both black and Hispanic.”
I believe Hispanics have to be carefull with the politics our state is taking, Florida. First, without a good education we will never get out of construction jobs. The schools are recieving less money for students. As a matter of fact the government is killing public education little by little. No one seems to notice or concern themselves with it. As it was, the schools were …hardly making it. Whats going to happen now? Think about it. Teachers salary has being cut in many ways for the past 3 or four year. Let me explain; teachers who have taught a supplement for 20 years were not given the extra class, even in those schools needed it desperatly. Meaning 8 % salary less.Then insurance payment was increase and benefits decrease (or at least, deductibles raised). Now the government says in order to save teachers positions lets cut “only 3%” of teachers salary. The fact is that the government has being doing this for a few years already. Many teachers have already taken, in one way or another, a cut of at least 9 or 10 percent. “Oh! It’s only 3 %”. thats nothing.
Ok! It is not a lot. So, why don’t we take 3% of everyones salary? No one would want that. Lets beging with the Superintendent of Schools. If we are doing it because schools are not performing, lets cut the salary of everyone who is “not performing according to our standards”. Don’t take into account every variable like we have done with teachers and schools. I am not going to mention names. But,we know the list will be very long.
Consequences: The best teachers, in most schools, are looking for alternate jobs. So, many of them will leave.The amount of people going into the profession decreases evey day. The new teachers, no matter how well intended, lack expirience and soon become so disapointed with their choice that they leave the profession or go to another state.
Coclusion: Less expirience teachers.The ratio student teacher increases. Bad school performance. Schools closing.Low performing students send to “good grade schools”. More studentes in the streets, because schools can afford enough security. So, why are hispanics into low paying jobs? Because the government, intentionaly or unintentionally have put them there.
A government makes the necesary cuts. But never, never cuts on the future of the country, education. If they do,they are saying that the only ones that deserved a good education are those who can afford it. Don’t blame it on teachers.To many vriables for them to suceed. Specially, when those who should help are not doing so.
Maria, your insight is crystal clear. Thanks for summing up the situation so well. What a great piece! People need to know how disparate the situation really is.