Bed-Stuy Patch’s was definitely an eye catcher: Alarmingly, the report states that the median wealth of white households exceeds black and Hispanic households by a multiplier of 20 and 18 times, respectively.
Digging in deeper, we learn that this gap is the largest in the 25 years that such data has been available.
While initially shocking, it is important for us to consider some of the historical reasons for this gulf, as well as more recent compounding factors. Then, more importantly, we must ask, what are some ways we can begin closing this divide?
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First let’s be reminded of the definition: Wealth measures accumulated assets (housing, cars, savings, etc.) in excess over debt (mortgages, credit card, loans, etc).
It is easier to understand that with historical income gaps, wealth gaps grow larger. With less inter-generational transfer of wealth in minority communities, coupled with a disproportionately greater share of the population living at or below the poverty line, the measure of wealth is greatly impacted.
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So what are the some of the key findings by the Pew Study to explain the growing wealth differentials?
2005 to 2009 was marked by a period of financial turbulence. The housing market bust, followed by the stock market crash ushered in a prolonged recession with record foreclosures and the longest periods of sustained unemployment since World War II.
For the most part, whatever gains in wealth that minorities made were wiped out and even further reversed by this financial shock. The vast majority of wealth owned by blacks and Hispanics is amassed primarily by home equity.
With few if any other buffering assets (savings, investments), indeed the loss of property values, along with foreclosures took a greater toll on blacks and Hispanics than the white counterparts who had a more diversified wealth portfolio.
Ownership aside, sadly, many minority household have either no wealth (zero net worth) or negative net worth with debt greater than any assets. The study found that 35 percent of blacks and 31 percent of Hispanics had no wealth or were in debt in 2009, compared to only 15 percent of whites.
So, what does this information mean to Bedford-Stuyvesant? Some of what I will say I have said before in previous columns, but it bears repeating again:
Education must start early. We must teach our children to break the cycle of wasteful and faddish consumption if we truly value a better life for ourselves, our community and our future generations. We can all start by looking at our choices.
Seek advice. Get help early and often. When you’re having a problem or don’t know the answer, don’t stick your head in the sand. Things won’t get any better; more likely they will get a lot worse. Whether the issue is unemployment, foreclosure, debt reduction or saving for home, college or retirement, there are many resources out here to help.
At Restoration, our doors are open to you, and we are strongly complemented by other organizations, including our partners in the Coalition for the Improvement of Bedford Stuyvesant.
We have the answers with us, right here and right now. That’s why Restoration is hosting the Bedford-Stuyvesant Transformational Leadership Summit to create a community break through. The three-day Bedford-Stuyvesant Transformational Leadership Summit (August 17-19) will advance our efforts to develop the required high levels of vision, accountability and execution. For more information, visit this website. If you want to learn more call us at 718-636-6930 or email me at cwgrannum@restorationplaza.org
