Fed Report Shows Huge Gap Between Minority & White Households
The Federal Reserve commissions the Survey of Consumer Finances to be carried out once in every three years to get real time data from American households on a number of categories including home ownership, stock portfolios, car ownership assets, debt and annual remuneration.
The survey covers around 6,200 households who belong to different races, economic backgrounds and have different educational qualifications. The survey has shown that Americans without college degrees along with Hispanics and African Americans have had a significant increase in their net worth during the last three years.
These minority groups saw an increase in their assets, homes and stocks during the last 36 months. The Federal Reserve Report showed that Hispanic households saw their annual income rise from $14,200 in 2013 to $20,700 in 2016 which was a 46 percent increase.
African American households saw their annual income go from $13,600 in 2013 to $17,600 in 2016, an increase of nearly 30 percent. One of the main reasons why the income from these minority groups has grown considerably is because many of them have found employment during the last three years. Stats show that the unemployment rate in the country dropped from 7.5 percent to 5 percent in 2016. A number of states have also raised their minimum wage requirement which has helped low skilled workers make more money, pay off their debts and add to their savings.
Valerie Wilson, the Director of the Economic Policy Institute’s program on race, ethnicity and the economy said that while these numbers were encouraging, the average net worth of African American and Hispanic families continued to be below $21,000. Wilson stated that the increase in percentage gains for these minority communities was due to the fact that they started at a lower level when compared to white households.
Wilson pointed out that there was still a huge gap between white households and minority households when it came to home ownership percentages, student debt and retirement savings. More than 70 percent of white households own homes and have a high level of equity when compared to African American families as less than 35 percent of them own homes. Nearly 60 percent of white families had retirement savings whereas less than 30 percent of African American families had savings.
The survey also showed that the gap between the rich and poor in the country had not shrunk as the top one percent of American households had 24 percent of the market in 2016.
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