How We’re Doing: Women and Wealth

A recent study by the Insight Center for Community Economic Development has been making the rounds–in large part because the Pittsburgh Post-Gazette literally made headlines out of it last week when it zoned in on this rather surprising statement on page 7 of the report:

While white women in the prime working years of ages 36-49 have a median wealth of $42,600 (still only 61 percent of their white male counterparts), the median wealth for women of color is only $5.

Wealth here is defined simply as “the total of one’s assets minus debts.” Keeping that in mind, one can surmise without even reading the report that this $5 is indicative of much more than just a low bank balance–namely, a lack of physical assets such as a house–and disproportionately high debt. If that’s shocking, get a load of some of the other findings:

  • The typical family of color only owns 16 cents for every dollar of wealth owned by the typical White family
  • Black and Hispanic mothers have less than one percent of the wealth of White mothers
  • With so little money in reserve, half of all single Black and Hispanic women can not afford to take an unpaid sick day or repair a major appliance

And, contrary to conventional American wisdom about bootstraps and work ethic, the report demonstrates that this kind of gross disparity can’t be easily chocked up to personal financial irresponsibility. Rather it concludes–like social justice advocates before–that inequality of outcomes is an indication of inequality of opportunity. To that end, the report outlines many of the institutional factors driving wealth inequality in the U.S.:

The U.S. has a long history of policies that transferred wealth from people of color to whites [...]As examples, the Indian Removal Act of 1830 forcibly removed Cherokees from their traditional lands to make room for white settlers. Jim Crow laws kept African Americans out of better paying jobs, quality public education and business opportunities. The benefits of citizenship, open to Europeans, was forbidden to Asian immigrants. The exclusion of Social Security coverage for a whole generation of farm workers, laborers and domestic workers, kept Latino and black elders in poverty. Advantage and disadvantage is passed from generation to generation, often with a cumulative effect, thereby contributing to the current racial wealth gap.

According to the study, women of color are further disadvantaged by existing wage disparities (Hispanic and Native women linger on the bottom rung), lack of access to the “wealth escalator” (employment and tax benefits), the long-term debilitating effects of public assistance and being targeted by predatory lenders, among others.

The report has been called ground-breaking, with good reason. Even when economic studies like this purport to be “intersectional” with regard to the kinds of data sought, interpretations of that data are often less so, as researchers fail to consider the myriad of socio-historical factors that shape it. So, while the study’s findings are unfortunate, the study itself is an important step towards more accurately investigating the economic status of women of color and the challenges they face.

For more info, read the report [pdf], see the Racialious series dissecting it, or read Ms. blogger Renee Martin’s analysis.

Comments

  1. This is such an interesting report. I liked how they addressed the (false) argument that everyone could make a decent living if they just worked harder. “Those who have not succeeded have either not worked hard enough or have their own behaviors to blame.” This is NOT true! There are so many institutional factors that come into play and give women and people of color the short end of the stick.

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    This post was mentioned on Twitter by MichelleHaimoff: Wage disparities – women v men, white v black: http://msmagazine.com/blog/blog/2010/03/15/how-were-doing-women-and-wealth/

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