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October 18, 2004
Poverty is on the rise. The ranks of the uninsured continue to swell. Wages are stagnant and jobs scarce. Not surprisingly, wealth inequality is rapidly increasing as well. The Pew Hispanic Center reports that the net worth of African-American and Hispanic households fell by 27 percent from 1999-2001, while assets for whites increased 2 percent. The recession "eroded over one quarter of the value" of Hispanic and black wealth, and even with mild recovery, these households now have less wealth than they did in 1999.
- The net worth of African-American and Hispanic households is less than 10 percent that of whites. Pew reports that the median net worth in 2002 for Hispanics was $7,932 and only $5,988 for black households. In contrast, white median net worth was more than 10 times higher at $88,651.
- Rising inequality means fewer opportunities for African-American and Hispanic families. Twenty-six percent of Hispanic households and 32 percent of black families had zero or negative net worth in 2002. This is double the rate of whites and essentially unchanged since 1996, according to Pew. These severe disparities in assets mean black and Hispanic families have fewer opportunities to pay for college, buy a house, and provide a better future for their children.
- The current tax structure rewards those with wealth and denies opportunities to expand wealth among African-American and Hispanic families. The array of wealth building in the tax system – mortgage interest deductions, tax-advantaged saving accounts, IRA's, etc. – do little to help those who currently have little or no wealth. Given the importance of assets in creating a better quality of life, we should restructure the tax system to extend more benefits to those at the bottom who need the most assistance saving and building wealth.
Daily Talking Points is a product of the American Progress Action Fund.
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Daily Talking Points is a product of the American Progress Action Fund. |
