Black Millennials Lag White and Hispanic Peers in Building Wealth

Older Black millennials are less wealthy than their baby boomer parents at that comparable age and are also falling well behind their White and Hispanic millennial peers in building net worth, a recent study shows.

Economists at the Federal Reserve Bank of St. Louis examined how much wealth Black, Hispanic and White millennial families amassed between 2007 and 2019, then compared those figures to how much wealth those groups were expected to acquire during that period. Wealth was calculated by taking the monetary value of what a family owns — their home, car and retirement accounts, for instance — minus how much debt they have from mortgages, student loans, credit cards and other financial obligations.

By 2019, millennial White families had accumulated total wealth of about $88,000, compared with $22,000 for millennial Hispanic families and $5,000 for millennial Black families. None of the groups have met the expected level of wealth that researchers predicted, but “Black families were a staggering 52% below wealth expectations,” St. Louis Fed senior researcher Ana Kent Hernández said in her analysis of the data. {snip}

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{snip} Fed data show that 41% of Black families owned their home in 2019, compared to 47% of Hispanic households and 73% for Whites.

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Federal Reserve data show that student loan debt is harming Black borrowers more than any other racial group. That’s partially because Black Americans have relatively lower income and can’t devote as much money to payments, the 2019 study showed.

Black millennials are also more likely to work in low-paying gig economy jobs that don’t offer employer-sponsored retirement accounts than White or Hispanic workers. Poor access to 401(k) and pension plans is inhibiting Black adults from saving for the future, Owens said. About 68% of White Americans had a retirement account compared to 41% of Blacks and 35% of Hispanic households, according to 2019 Economic Policy Institute data.

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