Whites have more wealth than minorities - WALB.com, Albany News, Weather, Sports

Whites have more wealth than minorities

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The wealth gap between white and minority households is the largest it's been in 25 years.

The gap vastly expanded in only four years.

"We're really not going to see that wealth gap decrease until they can pass down their wealth and real estate to other people," said economist Aaron Johnson.

Johnson says one of the biggest reasons for the wealth inequality is a generational gap.

"Well a lot of it has to do with the legacy of slavery and Jim Crow. Wealth is built over generations, not decades," said Johnson.

According to the Pew Research Center, in 2009 the median wealth of white U.S. households -- that's their total assets minus their debts -- was $113,149, compared with $6,325 for Hispanics and $5,677 for blacks.

Johnson says another reason for large gap is that the home foreclosure epidemic hit minorities especially hard.

"When the situation deteriorated and home values started to decline, you started seeing more defaults rates and foreclosure rates amongst blacks and Hispanics," said Johnson.

According to the Pew study, Hispanics were hit worst. From 2005 to 2009 their median household wealth dropped by 66%.

Blacks didn't fare much better, their median household wealth in that same time span dropped by 53%, but for whites, from 2005 to 2009, it was only a 16% drop.

Johnson says he is optimistic for the future of minorities, but it most certainly won't happen overnight.

"Wealth accumulates over generations and blacks have made a lot of gains in the past 20 to 30 years, but we're not going to see the results of wealth until the next generation going forward," said Johnson.

Johnson said younger African-Americans and Hispanics have to lead the way.

The white-black wealth gap is also at its widest since the census began tracking such data in 1984, when the ratio was roughly 12 to 1.

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