Hispanics hit hardest by the recession, new study finds

It’s a fact of life in the United States that race and class are not disparate categories, but correlated ones. A new study based on Census bureau data demonstrates exactly how this correlation plays out when a recession hits. The study, reported on today in the New York Times,

… found that the median wealth of Hispanic households fell by 66 percent from 2005 to 2009. By contrast, the median wealth of whites fell by just 16 percent over the same period. African Americans saw their wealth drop by 53 percent. Asians also saw a big decline, with household wealth dropping 54 percent.

The declines have led to the largest wealth disparities in the 25 years that the bureau has been collecting the data, according to the report.

Median wealth of whites is now 20 times that of black households and 18 times that of Hispanic households, double the already marked disparities that had prevailed in the decades before the recent recession.

In other words, racial economic inequality was bad before the recession, but now it’s even worse.

And of course, once you throw gender into the mix, the disparities become starker still. The economic recovery, another study recently found, is largely bypassing women. This leaves Hispanic, African American and Asian women particularly vulnerable – as if they weren’t already disadvantaged enough.

These two studies, which demonstrate the correlation between race and class, and between gender and class, also serve as an important reminder about intersectionality. Intersectionality, the idea that multiple forms of group oppression combine to disadvantage people in unique ways, isn’t just a framework for analysis, but a fact of life for all of us. What happens when you add gender identity into this mix of race and gender? What about ability? What about immigrant status?

When you see stats like this, it’s hard not to be deeply cynical about American pretensions to classlessness and equal opportunity for all. The idea that America is a free-for-all where you can be whatever you want as long as you work hard is just that – an idea, and not a terribly accurate one at that. And in the current political climate, where the economic future of the most vulnerable rests in the hands of wealthy and powerful politicians who seem to have little concern for the real-world impact of their posturing and their policies, it’s hard to stop that cynicism from turning to disgust, and anger.

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  1. Posted July 26, 2011 at 10:56 am | Permalink

    Depressing. The first step is TRUE progressive tax reform…we need to get top marginal rates back up into the >50% range. If you’re making 250k+ a year you can afford to give half of it to your less privileged friends and neighbors. There’s no excuse for the pitifully low taxes the rich pay.

  2. Posted July 27, 2011 at 10:53 am | Permalink

    Because this study is about household wealth, it is not surprising that Hispanic households are at the bottom. Every new penniless immigrant from Oaxaca – legal or not – will lower average household wealth among Hispanics. It seems predictable that groups that have been here longer (and haven’t been enslaved and oppressed) would have greater household wealth. They have had many generations to build wealth.

    I was in another post (on Sociological Images) that the largest decrease in net worth was of Asian families. That was an interesting finding. If I may play the armchair sociologist, I would posit that Asians were more likely to have a lot of their wealth invested in a nice house, and to be one income families. Those two factors made the more vulnerable to the housing bubble bursting and to layoffs and stagnant wages. I would say they were more likely to be in those categories because they greatly value education and so would stretch the budget to live in an area with top notch public schools, and they are more influenced by traditional values and so there is more often a stay at home matron in the family.

    • Posted July 27, 2011 at 9:19 pm | Permalink

      “It seems predictable that groups that have been here longer (and haven’t been enslaved and oppressed) would have greater household wealth. They have had many generations to build wealth.”

      You are right about that, but it goes further. Long before the recession, and even before the housing boom, one African American journalist took a look at how owning a home for many African Americans did not increase their wealth. For example, his parents lived in a “black” neighborhood of some city like Chicago or Detroit, and property values were practically stagnant since the 1960s when they bought the house (IIRC, like $13,000. And pity the homeowners in Detroit today.). On the other hand, in “white” neighborhoods (and most of the US), property values, on average, appreciated significantly.

      People in those “white” neighborhoods would be able to use the equity in their homes for among other things, college loans for self improvement, or reinvesting in their property or even buying more, to build wealth.

      (Myself, I could have increased my money 2,500 fold and literally be worth about as much as Donald Trump, if instead of CDs and bonds, I’d invested in Yahoo! and Apple since the 90s. Instead I used my money as cash to go back to school and for living expenses, and now live paycheck to paycheck, unable to ever afford a house.)

      Generations on generations of folks with improved opportunities. That is just part of what widens the gap. Meanwhile privileged fools like one Yahoo! news poster doesn’t get why colored people can’t do as well as he does.

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