Darity Briefs Congressional Staff on New Report on Wealth Inequality
Duke Professor William A. "Sandy" Darity, Jr and Darrick Hamilton of The New School gave policymakers a lesson on wealth inequality among minority communities Wednesday during a live conference call. Darity and Hamilton are two of five co-authors of "Beyond Broke: Why Closing the Racial Wealth Gap is a Priority for National Economic Security" recently released by the Center for Global Policy Solutions.
Nine congressional staff members participated on the conference call. They represented delegations from North Carolina, California, Texas, Hawaii and Ohio, as well as the leadership of the Congressional Black Caucus, Congressional Hispanic Caucus and the Congressional Asian Pacific Caucus. Several participants were Duke alumni.
Using data from the 2011 Census, "Beyond Broke" highlights the acute racial and wealth gap and recommends policy and regulatory changes to improve the financial and housing well-being of communities of color. Darity said he hoped by getting the report into the hands of policymakers, the report will be more likely to shape policy on an issue that mostly hasn't been high on any policy agenda.
"Most research on net worth disparities treats general inequality; very little treats inequality between racial/ethnic groups," Darity said. "Our work does both and begins to examine the interdependence between general and group-specific wealth inequality and to put on the table a major policy solution for the wealth inequality crisis -- the 'baby bonds' or a child endowment provided by the government for each new born infant, with the amounts varying based upon the wealth position of the child's family."
Some of the reports' findings include:
- Asians and Latinos are twice as likely to live in a state hardest hit by the housing crisis.
- Hispanic households experienced the largest drop in net worth following the recession.
- More than half of whites own four or more tangible assets, compared to 49 percent of Asians and only one in five of African Americans and Latinos.
- For most African Americans and Latinos, checking accounts are their only liquid asset.
- African Americans (38 percent) and Latinos (35 percent) are over twice as likely as whites (13 percent) to hold no financial assets at all and to have no or negative net worth.
When retirement savings are taken out of the analysis, the disparities in liquid wealth are even more disturbing, according to the report. Blacks are found to hold a mere $25 and Latinos just $100 in liquid wealth, compared to $3,000 held by the typical White household.
The report proposes policy and regulatory changes to address what it calls a "threat to national security," including paycheck fairness, living wages, and low- and no-cost financial services that help low-income households, along with mortgage settlements and loan modifications for distressed homeowners.