While the media touts the growing minority middle class, a recent report by the Economic Policy Institute (EPI) shows we still have a long way to go before there is economic equality.
EPI looks at Federal Reserve Board figures, released Feb. 23, which shows that in 2004, the income of minorities was about 56 percent of whites. But the real shocker is the net worth of minorities (assets minus debts) is only 27 percent of whites, more than double the gap in income. That’s up from a 24 percent gap in 2001.
While progress has been made in economic equality, the fact is the historical disparities are glaring, says EPI economist Jared Bernstein, author of the report:
Minorities face fewer barriers to economic success than they did decades ago, but these figures show the historic inequality in the ability of minorities to build wealth.
Merely leveling the playing field is not enough, Bernstein says. The nation needs a plan modeled after the post-World War II “GI Bill” program to build minority wealth equality. The key components of such a plan would be promoting home ownership among minorities and increasing access to higher education.
The small growth in minority wealth since 2001 is primarily due to increased minority ownership, Bernstein says. The EPI report shows that between 2001 and 2004, the rate of minorities owning a primary residence grew more quickly than that of whites, by 3.5 percentage points compared to 1.8. Still, a lower percentage of minorities (51 percent) owned a primary residence in 2004 compared to whites (76 percent).
As for access to education, Bernstein says it should not be a radical idea that every low-income person have the opportunity to go to college.
