Latino wealth gap persists despite $4 trillion economic role
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The wealth gap between white and Latino households poses deep problems for the U.S. economy in the coming decades, according to a new report out Wednesday.
Why it matters: Latinos are the fastest-growing demographic in the U.S., but have $.22 in household wealth for every $1 held by white households. This could limit consumer spending, business formation and long-term growth if unaddressed.
- Latinos contribute an estimated $4.1 trillion annually in economic output in the U.S. and are projected to make up nearly 28% of the U.S. population by 2060.
- The UCLA Latino Policy and Politics Institute–UnidosUS report claims the Latino wealth gap isn't accidental but a result of decades of U.S. policy decisions that shape economic inequality today.
By the numbers: Median Latino household wealth sits at $62,000 vs. white household wealth of $284,000.
- Only 28% of Latinos have retirement accounts compared to 62% of white Americans.
- 51% of Latinos own homes vs. 73% of white Americans.
- The wealth gap is shrinking too slowly, the report claims: Latinos had seven cents per dollar of white household wealth in 1989.
Zoom in: The report traces the wealth gap to five policy areas: immigration, housing, labor, public benefits and education.
- Immigration legal status has long determined access to jobs, credit and property ownership, the report alleges.
- Redlining, displacement and predatory lending also reduced homeownership and home values among Latinos.
- Segregation and rising costs limited returns on schooling for Latinos, putting them further behind.
The bottom line: "We can be productive members of society, but still face a lot of barriers when it comes to actually being able to be shareholders in wealth," said Gabriella Carmona, the report's lead author and a senior research analyst at the institute.
- Carmona said Latino GDP figures mask a deeper issue: families are contributing heavily to growth but are largely shut out of asset-building opportunities like homeownership and savings.
- "They are instead actually quite burdened by debt," she said.
