New research finds an appalling 20 to one chasm in net worth between white and black Americans, and an 18 to one gap between whites and Hispanics. The Pew Research Center found that the net worth gap has widened during the Great Recession, mainly because the housing bust disproportionately cut into the wealth of African-Americans and Hispanics.
The housing crash hurt these households disproportionately because they tended not to have much in the way of other assets, especially when it came to retirement savings. So, the Pew report — an analysis of the comprehensive U.S. Census Bureau Survey of Income and Program Participation for 2009 – points to a terribly important social problem we face today – and the growing retirement security gap confronting minority households.
This is worth keeping in mind as Washington’s debt ceiling and deficit reduction circus continues – and as the politicians and policymakers continue their flirtation with dangerous cuts to programs that will be absolutely critical to minority households in the years ahead, namely Social Security, Medicare and Medicaid.
These programs are very important to all Americans, of course. But they will be nothing short of a lifeline for households approaching retirement with little or no retirement savings, through no particular fault of their own. Traditional defined-benefit pensions have all but disappeared in the private sector, and voluntary saving through Individual Retirement Accounts or 401(k) plans are tied to several important factors where minority populations are at a disadvantage:
Income. You can’t save what you don’t earn. While there’s nothing new here, Pew reports the disparities in joblessness and income have continued during the Great Recession. Jobless rates at the end of 2009 stood at 12.6 percent for Hispanics, 15.6 percent for African-Americans and 8.0 percent for whites. Income losses also were greater for minority households.
Access. Minority workers are less likely to work for employers that offer a workplace retirement plan. Just 33 percent of Hispanic workers – and 49 percent of African-Americans – had access to a workplace plan in 2009, according to the Employee Benefit Research Institute. That compares with 53 percent of white workers.