The solid growth that the U.S. enjoyed before the viral pandemic paralyzed the economy this spring failed to reduce racial disparities in Americans’ income and wealth from 2016 through 2019, according to a Federal Reserve report released today.
Though Black and Hispanic households reported sharper gains in wealth than white households, those increases weren’t enough to noticeably narrow the racial gaps. The typical white family possessed eight times the wealth of Black families and five times the wealth of Hispanic families in 2019, the Fed says.
The Fed’s Survey of Consumer Finances, released every three years, analyzed incomes and wealth in 2019. The survey found that income for the typical U.S. family rose 5%, adjusted for inflation, from 2016 to 2019 to $58,600. That was weaker than the 9% income gain the typical family received from 2013 through 2016.
The survey provides a trove of information on family finances in the U.S., from the percentage of households that own stock (53%) to the proportion that have a retirement account (50%).
While the report shows increases in income and wealth for lower-income and Black families, many economists worry that the pandemic has reversed those gains. Job losses this year have been concentrated among lower-income workers in the restaurant, hotel, retail and travel industries. Those workers are disproportionately nonwhite.
Additionally, the median income among the poorest one-fifth of Americans rose 3% during the three years analyzed, while median income for the richest one-tenth increased 6%, the Fed says.
Economic research has found that differences in inheritances are a major factor behind the racial wealth gap. A separate Fed note released today finds that 30% of white families report receiving an inheritance—three times the corresponding proportion of Black families and four times that of Hispanic families. Read the full report.
