Authors: Fenaba R. Addo and William A. Darity Jr.
Abstract: What does it mean to be working class in a society of extreme racial wealth inequality? Using data from the Survey of Consumer Finances, we investigate the wealth holdings of Black, Latinx, and white working-class households during the post–Great Recession (pre–COVID-19) period that spanned 2010 to 2019. We then explore the relationship between working-class and middle-class attainment using a wealth-based metric. We find that, in terms of their net worth, fewer Black working-class households benefitted from the economic recovery than white working-class households. Among white households, the working class saw the greatest increase in wealth in both absolute and relative terms. Working-class households were less likely to be middle class as defined by their wealth holdings, and Black and Latinx households were also less likely to be middle class. For Black households, racial identity is a stronger predictor of wealth attainment than occupational sector.
Key Findings
- During the recession, Black and Latino households lost 48 and 44 percent of their wealth, respectively, while white households lost just 26 percent. As of 2019, Black households held less than fifteen percent of the net worth of white households.
- The authors classified individuals and households according to both race (non-Latino Black, non-Latino white and Latino) and class (working class or professional managerial class, based on occupations).
- While economic outcomes improved for most non-Black households between 2010 and 2019, few Black households could keep up. The percentage of both Black professional-class and working-class households who were middle-class or above fell between 2010 and 2019.
- While economic outcomes improved for most non-Black households between 2010 and 2019, few Black households could keep up. The percentage of both Black professional-class and working-class households who were middle-class or above fell between 2010 and 2019.
- Black and Latino-led households were less likely than white households to achieve these higher thresholds of wealth – regardless of whether they belonged to the professional or working class.
- When a household’s net worth is not enough to cover three months of the federal annual poverty threshold (at $2,100 a month), a household is classified as “wealth poor.”
- The proportion of “wealth poor” families decreased from 2010 to 2019 across most racial and professional categories, but it increased among Black professionals.
