Wednesday, April 20, 2011

Racial Disparities in Wealth.

The Center for Community Economic Development has issued a new report "Diverging Pathways: How Wealth Shapes Opportunity for Children". The key findings were:

Racial disparities in households with young children are dramatic. In 2007, 32% of white households with young children were income-poor and 14.2% had no assets. In sharp contrast, 69% of Latino and 71% of blacks were income-poor, and 40% had no assets.

  • Racial disparities in child outcomes start early and grow over time. At nine months, all children start out with fairly similar scores on a standard child development test, but by two years of age, racial disparities emerge.
  • The wealth gap widened for households with children. Between 1994 and 2007, the wealth gap between white and black households with children increased by $22,000 -almost doubling from $25,000 to $47,000. In 2007, black households with children held only 4% of the wealth of white households. From 2005 to 2007, black households living with zero or negative net worth (debt) grew from 35% to 39% while it stayed constant at 15% for white households.
  • Maternal education matters, but alone cannot eliminate racial wealth disparities. For every dollar of wealth owned by a white mother with a bachelor’s degree or higher in 1994 a black mother owned 64 cents. By 2007, it had fallen to 13 cents. The wealth gap between white and black mothers with a bachelor’s degree or higher grew five times larger between 1994 and 2007 to an astonishing $128,000.
For state policies to reduce child poverty.

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