Feb 14, 2024 - Economy

Racial wealth gap widens despite wage progress

Data: Federal Reserve Bank of New York; Chart: Axios Visuals
Data: Federal Reserve Bank of New York; Chart: Axios Visuals

Since the pandemic, wage gains for Black Americans have outpaced those for white people — but wealth inequality deepened, finds new research from the New York Fed.

Why it matters: The research, which looks at changes from 2019 to the third quarter of 2023, demonstrates how firmly entrenched the racial wealth gap is in the U.S.

What happened: All three groups saw gains in the value of their homes. The difference maker came from the big gains in the stock market in 2021 — white households have far more of their wealth in equities than Black or Hispanic households.

  • Black and Hispanic households saw the value of their financial assets fall over this period.
  • More than 50% of Black and Hispanic wealth is held in pensions, and a smaller share in stocks and mutual funds.

The big picture: The overall real net worth of white households eclipses that held by Black and Hispanic people in the U.S.

  • White wealth jumped to $112.8 trillion in Q3 2023 from $87.5 trillion in Q1 2019.
  • For Hispanics it rose to $3.1 trillion, from $2.6 trillion. And for Black households wealth fell to $4.6 trillion from $4.7 trillion.

Yes, but: The wage picture is different. Real weekly wages for Black Americans rose 8% over the period the NY Fed examined, from $291 at the beginning of 2019 to $315 in Q3 2023.

  • The median white person's weekly wage went from $370 in 2019 to $371 — basically, no increase.

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