by Latoya Peterson
Yesterday, a headline in the Post-Gazette worked its way around Twitter: Study finds median wealth for single black women at $5. Most outlets qualified the link by calling it “shocking” or mentioning the five dollar figure was not a typo.
I called up a fellow young black professional friend of mine and told her about the findings of the study. “Is it messed up that I’m kind of glad in a way?” she asked, “I mean, all this time I’ve been wondering why I can’t get my shit together, but it turns out I’m normal.” We both laughed at her small attempt at gallows humor around a situation many of us know a little too intimately – when it comes to our white counterparts, women of color are light years behind in wealth.
The study is a new report from The Insight Center for Community Economic Development, titled “Lifting as We Climb: Women of Color, Wealth, and America’s Future.” The report is an in-depth look at the issues in wealth accumulation particular to black women, Latinas, Asian and Native American women. However, even as this report is one of the most comprehensive I have seen on the subject, the limited data for Asian American and Native American women means that their statistics are limited from entire sections of the report, and discussed in a subsequent section about the need for better stats. The report’s title is should be a familiar refrain to many black women, but the author of the report, Mariko Chang, kindly includes an explanation of the origin of the phrase:
More than a century ago, the National Association for Colored Women was founded by African American women leaders in response to a vicious attack on the character of African-American women. A few decades distant from the abolition of slavery, the intensification of poverty, discrimination, and segregation impelled these women to action in defense of their race. Their motto was “Lifting as We Climb,” signaling their understanding that no individual woman of color could rise, nor did they want to rise, without the improvement of the whole race. At the top of their agenda were job training, wage equity, and child care: issues that, if addressed, would lift all women, and all people of color.
The lift as we climb refrain was implanted into some of us from birth and a lot of my earliest lessons about black empowerment focused on financial empowerment. Yet, these adages about saving money, investing in the community, and being a conscious consumer was like propping a footstool against a fifty foot high sheer rock wall. Insight’s report focuses on the wealth gap, not the well documented income gap, for a good reason:
The current economic crisis has revealed why wealth is so important to the stability of households. Wealth, or net worth, refers to the total value of one’s assets minus debts. Without savings or wealth of some form, economic stability is built on a house of cards that quickly crumbles when income is cut or disrupted through job loss, reduced hours or pay, or if the family suffers an unexpected health emergency.
As the current crisis continues to unfold, it has become all too clear that it is not just “poor” people who are losing their homes to foreclosure in record numbers; even households with some wealth found that they did not have enough to ride out the still unfolding economic downturn. Wealth impacts not just current economic security, but retirement security as well. With concerns over the solvency of Social Security and the shrinking number of jobs that provide pensions, it is of increasing importance that people have the means to save for their own retirement. Wealth is also tied to the well-being of the next generation, as it provides parents with the ability to help pay for their children’s college education, and can also be passed down from generation to generation. In fact, the intergenerational transfer of wealth is one of the reasons why racial wealth gaps from policies long ago have become entrenched. […]
Wealth and income are related, but they are not the same. Income refers to the amount of money received by an individual or household during a specific period of time, such as a month or year. It usually comes in the form of earnings or wages from a job, but can take other forms as well such as interest on savings or investment accounts, Social Security, transitional assistance (welfare payments), pension benefits, or child support. Wealth, or net worth, refers to the total value of one’s assets minus debts. Typical types of assets include money in checking accounts, stocks or bonds, real estate, and businesses owned. Typical types of debts include home mortgages, credit card debt, and student loans.
So how did we get to the five dollar figure? Page seven of the report explains “While white women in the prime working years of ages 36-49 have a median wealth of $42,600 (still only 61% of their white male counterparts), the median wealth for women of color is only $5.” A more complete answer is revealed in Insight’s wealth of charts discussing the gaps:
Since there is so much data (the full report is well worth a read, but clocks in at 28 pages) we will discuss small sections of the report and related issues over the next week.
The topics covered will include: the wealth gap (with and without vehicles); how marriage* impacts wealth building (and how stereotypes and fear mongering about single black women ignore the larger issues at play); parenthood and wealth building; differences in financial starting points and class mobility; a discussion of types of assets acquired by women of color; the rising levels of debt; Asian American and Native American women’s wealth, and barriers to understanding the full scope of the problem; issues of data collection and minority participation in the census; prior institutional factors contributing to the wealth gap for women of color; the “wealth escalator”; government assistance and its impact on wealth building; retirement; subprime home loans and the mortgage crisis, particularly as it relates to Latinas; citizenship and immigration status and how that impacts wealth building; cultural expectations of women; policy recommendations to end the wealth gap; and non governmental/community based solutions.
Tomorrow: Looking at The Wealth Gap
*There is no data included about queer POC. We will discuss this a bit more when we discuss the limitations of data, but the discussions of marriage and wealth building for POC provides an interesting element to the discussions surrounding same sex marriage rights.