Posted on September 29, 2020

Black Families Average Less Than 15 Percent of Wealth of White Families, Fed Says

Victoria Guida, Politico, September 28, 2020

The average Black family had less than 15 percent of the wealth of white families in 2019, a trend that barely budged despite economic gains among minorities over the past three years, the Federal Reserve said on Monday.

According to a Fed survey of consumer finances conducted every three years, the median wealth of white families was $188,200, compared with only $24,100 for Black families. Central bank economists attributed that gap to “many complex societal, governmental, and individual factors that play out over the life cycle and across generations.”


“In addition to direct transfers or gifts, families can make investments in their children that indirectly increase their wealth,” according to a Fed paper on the survey results. {snip}

“For these reasons, wealth (or a lack thereof) can persist across generations and reflect, among other factors, a legacy of discrimination or unequal treatment in housing, education, and labor markets,” it adds.

The median Black family in the under 35 age group had only $600 in wealth, compared with $25,400 among young white families.


{snip}The Fed survey shows that more than half of white families have equities, while only 34 percent of Black families and 24 percent of Hispanic families own stock. Similarly, white families have more emergency savings.

The survey, which examines shifts between 2019 and the previous snapshot in 2016, more broadly demonstrates positive economic trends in the twilight years of the longest economic expansion in U.S. history.

It shows that median wealth grew across all races, and slightly faster among Black and Hispanic families than white families, as the unemployment rate dropped below 4 percent in the months prior to the pandemic — a dynamic often highlighted by President Donald Trump.