Authors: Fenaba R. Addo and William A. Darity Jr.
Abstract: Wealth inequality across racialized groups in the United States is immense, persistent, and well-documented. Being part of a marginalized racial or ethnic group in the United States predicts one’s economic position in society more strongly than education, income, or employment status. This pattern held steady throughout the extended period of economic recovery following the Great Recession. In short, increases in economic well-being during the recovery period were not equally distributed and this was especially true for working-class people. In this study, we evaluated wealth values of households headed by non-Latinx Black, Latinx, and non-Latinx white respondents of prime working age (i.e., 25 to 64 years old) and actively participating in the labor force. Our data emerge from the Survey of Consumer Finances (SCF). SCF data allows researchers to generate nuanced and effective measures of household net worth across multiple domains of social class status. Household wealth as we define it includes all financial and non-financial assets minus total household liabilities or debts. Rather than relying on single-unit measures of income, or combined measures of income and educational attainment, household wealth acts as a more robust measure of economic well-being.
Key Findings
- Persistent generational wealth gaps are a defining feature of racial inequality in the United States.
- The fragility of Black households’ middle-class status becomes increasingly evident when seen through the lens of household wealth rather than income alone.
- Wealth accumulation is transformative across households and generations; supporting economic mobility and helping to solidify a household’s social, political, and economic status.
- The persistent over-representation of Black households’ wealth position at the bottom of the socioeconomic distribution is a function of cumulative, intergenerational conditions.
