WASHINGTON (AP) – The solid growth that the United States received before the viral pandemic paralyzed the economy this spring failed to reduce the racial differences in income and wealth of Americans from 2016 to 2019, according to Federal Reserve Report Monday.
Although black and Hispanic families reported a sharper increase in wealth than whites, this increase was not enough to significantly reduce racial gaps. In 2019, a typical white family had eight times the wealth of black families and five times more than Hispanic families, the Fed said.
The Fed’s Consumer Finance Review, which is released every three years, analyzes incomes and wealth in 2019. The survey found that the income of a typical American family grew by 5%, adjusted for inflation, from 2016 to 2019 to $ 58,600. This was weaker than the 9% increase in income that a typical family received from 2013 to 2016.
The survey provides a wealth of information on family finances in the United States, from the percentage of households that own shares (53%) to the share that have a retirement account (50%).
While the report shows rising incomes and wealth for low-income and black families, many economists are concerned that the pandemic has canceled those gains. This year’s job losses were concentrated among low-income workers in restaurants, hotels, retail and tourism. These workers are disproportionately white.
Some measures have shown a narrowing of the income disparity. The average income of one-tenth of American families fell 6%, largely due to a sharp drop among the richest 1%, Federal Reserve economists said. On the contrary, the average income among 60% of low-income families has increased.
However, average figures can be distorted by huge revenues at the very top. The Fed report notes, for example, that while the average income of all families fell by 3% from 2016 to 2019, with the exception of the 1 richest, the average income rose by 3.1%. According to Fed economists, the incomes of the richest Americans may fluctuate more sharply than the incomes of low-income people, and probably declined due to lower profits from the sale of stocks, bonds and property.
Economists typically view average incomes, which reflect the middle of all wages, as a way to filter out extremes. The average income of one-fifth of the poorest Americans rose by 3%, and the average income of one-tenth of the richest rose by 6%, the Fed said.
The average family income for whites grew by 6%. For black families it was a little better – 7%. For Hispanic families, incomes fell by 1%. The average income of white families last year was $ 69,000, compared to $ 40,300 for black families and $ 40,700 for Latinos.
The poorest Americans, as well as black and Hispanic families, did get rich from 2016 to 2019, largely by increasing the amount of property and the cost of housing. But the increase came from such low levels that they did not significantly narrow overall income disparities, the Fed said.
Black families, for example, reported an increase in equity of 33%, and Hispanic families – by 65%. The wealth of white families increased by only 3%. While encouraging, the average level of wealth for white families in 2019 was much higher at $ 188,200, compared to $ 24,100 for black families and $ 36,200 for Hispanics.
Economic research has shown that differences in heredity are a major factor in differences in racial affluence. A separate Fed note released on Monday found that 30% of white families report inheritance – three times more than in black families, and four times more than in Hispanic families.
The richest 1% of Americans owned one-third of the country’s wealth in 2019, just under nearly four-fifths in 2016. But wealth has grown for the next 9% of the population, the Fed said in another research record. Thus, the richest tenth of families owned 71% of wealth unchanged compared to 2016.
Source: AP News
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