An Urban Institute study spotlights how the wealth gap between blacks and Hispanics, on one side, and non-Hispanic whites, on the other, has grown during the recession. As of 2010, white families were six times wealthier than black and Hispanic ones, up from four times as wealthy prior to the recession. The mere fact of this gap isn’t as surprising as the numbers involved: Hispanic families saw their wealth decline by 44 percent over a three year period, compared with only 11 percent for white families.As the New York Times notes, this is a serious problem whose effects will be felt long after the recession is over. If minority families have less wealth, that means they have less freedom to start businesses, pay for college for their children, or take out loans for big-ticket items like houses or cars. This in turn will make it harder for members of future generations to take the risks needed to improve their positions in life and close the wealth gap.To no one’s surprise, the problems started in the housing market:
Two major factors helped to widen this wealth gap in recent years. The first is that the housing downturn hit black and Hispanic households harder than it hit white households, in aggregate. Many young Hispanic families, for instance, bought homes as the housing bubble was inflating and reaching its peak, leaving them saddled with heavy debt burdens as house prices plunged in places like suburban Phoenix and inland California.Black families also were hit disproportionately by the housing collapse, because heading into the recession housing constituted a higher proportion of their wealth than for white families, leaving them more exposed when the market crashed. Higher unemployment rates and lower incomes among blacks left them less able to keep paying their mortgages and more likely to lose their homes, experts said.
This is an important story, and we are glad to see the NYT cover it. But the Times carefully tip-toes around several land mines in this story. For one, it avoids any suggestion that certain political actors may have had anything to do with the problems facing minority families in the sluggish economy: So blacks got hosed in the “last five years” or “since the recession” rather than “under the Obama administration.” The piece also does its best to downplay the role that liberal Democrats played in luring underprivileged minorities into the housing market just as the bubble really began to inflate.Another way to put it: Despite the best intentions in the world, Democrats simply haven’t come up with any policies that actually help their most loyal constituency group.[Empty wallet photo courtesy Shutterstock.]