BY RAKESH KOCHHAR AND ANTHONY CILLUFFO
The Great Recession of 2007-2009 triggered a sharp, prolonged decline in the wealth of American families, and an already large wealth gap between white households and black and Hispanic households widened further in its immediate aftermath. But the racial and ethnic wealth gap has evolved differently for families at different income levels, according to a new Pew Research Center analysis of data from the Federal Reserve Board’s Survey of Consumer Finances.
Among lower-income families, the gap between white households and their black and Hispanic counterparts shrank by about half from 2007 to 2016. But among middle-class families, it increased and shows no sign of retreating. (There are an insufficient number of observations in the SCF data to report on upper-income black and Hispanic families separately.)
Overall, American household wealth has not fully recovered from the Great Recession. In 2016, the median wealth of all U.S. households was $97,300, up 16% from 2013 but well below median wealth before the recession began in late 2007 ($139,700 in 2016 dollars). And even though overall racial and ethnic inequality in wealth narrowed from 2013 to 2016, the gap remains large. In 2016, the median wealth of white households was $171,000. That’s 10 times the wealth of black households ($17,100) – a larger gap than in 2007 – and eight times that of Hispanic households ($20,600), about the same gap as in 2007. (Asians and other racial groups are not separately identified in the SCF data.)
Here are some key trends in household wealth across income tiers and racial and ethnic groups. In this analysis, we categorized families by their household income, after adjusting their incomes for family size. Middle-income families have size-adjusted incomes between two-thirds and twice the national median size-adjusted income. Lower-income families have a size-adjusted household income less than two-thirds the median and upper-income families more than twice the median.