Racial Disparities in Household Wealth Following the Great Recession

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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.

In this study, published by the Institute for Research and Poverty at the University of Wisconsin-Madison, authors Fenaba R. Addo and William A. Darity Jr. used data from the Survey of Consumer Finances (SCF) to evaluate wealth inequality following the Great Recession. They measured the 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. The authors found that increases in economic well-being during the recovery period were not equally distributed, a phenomenon that was especially true for working-class people.

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.
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