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A new report by the Center for Global Policy Solutions on the widening wealth gap has many sounding alarm bells.

In Beyond Broke: Why Closing the Racial Wealth Gap is a Priority for National Economic Security, researchers used the Census Bureau’s Survey of Income and Program Participation (SIPP) and the National Asset Scorecard in Communities of Color (NASCC) data to explore the state of America’s wealth gap.

Beyond Broke takes an in-depth look at both housing and liquid wealth and finds that disparities exist across all races. According to the report, 67 percent of African-Americans and 71 percent of Latinos are considered “asset poor” and “do not have cash or assets readily converted into cash that will cover their basic living expenses if they are without income for three months.”

“When it comes to the racial gap in liquid wealth, African-Americans and Latinos are nearly penniless,” the report states. “The median liquid wealth of Whites is over 100 times that of Blacks.”

Beyond Broke also notes Latinos have a median liquid wealth of a $340 with Blacks clocking in at just $200, compared to $23,000 in liquid wealth by Whites and $19,500 held by Asians. Moreover, African-Americans and Latinos are twice as likely than Whites to hold no financial assets at all.

Other findings include:

  • Between 2005 and 2011, the median net worth of households of color remained near their 2009 levels, reflecting a drop of 58 percent for Latinos, 48 percent for Asians, 45 percent for African-Americans but only 21 percent for whites.
  • Asians and Latinos are twice as likely to live in a state hardest hit by the housing crisis.
  • Hispanic households experienced the largest drop in net worth following the recession.
  • More than half of whites own four or more tangible assets, compared to 49 percent of Asians and only one in five of African-Americans and Latinos.
  • For most African-Americans and Latinos, checking accounts are their only liquid asset.
  • African-Americans (38 percent) and Latinos (35 percent) are over twice as likely as whites (13 percent) to hold no financial assets at all and to have no or negative net worth.

During a recent press conference, Congressman Keith Ellison of Minnesota blamed the gap on tax policies that aid the rich, and Maryland Congressman Elijah Cummings warned that if we don’t correct the disparities the American economy will fall apart.

“If you have the majority in this country who are not earning enough money to take care of their families, who are not earning enough to create a savings account and don’t have pensions, who’s going to buy the refrigerators, who’s going to buy the curtains who’s going to buy the cars?”

Cummings added: “We have to make sure that America understands that this is not just a minority problem, this is an economic security problem. If you cut that many people out of the economic mainstream, your country will literally collapse.”

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  • Chauntelle

    That’s funny. I have white friends that have degrees and are broke as hell. Hummm… Who knew?

    • Chrissy

      Did you read the article?

      It didn’t say anything about all whites having money. Of course there are some white people who are broke.

  • Valerie

    I watched a video by Dr Umar Johnson on YT recently where he talks about us being conspicuous spenders and that our self worth correlates with the things we have. Let me tell you that struck a nerve with me especially from my 20’s. Now married in my early 30’s we have investments, but our safety net could definitely use some cushioning. Anything that doesn’t have real sentimental value or we haven’t used in over a year we’ve sold.

    • ALM247

      “Anything that doesn’t have real sentimental value or we haven’t used in over a year we’ve sold”.

      That’s very smart, and that keeps the clutter down. :)

  • Nicolinexo

    Im not surprised. Black and latinos have a lot of good opportunities they just dont know how to take advantage of them.

    An a example is last week when I was setting up interviews for a position at my company. I called a couple of African Americans back to interview them most of them made a bad impression before they even opened their mouths. It was just a administrative position but the pay was $14.00 dollars an hour and there was a great opportunity to move up in the company. Anywho…. One was 15 minutes late, one bought his friend, one kept calling me sweetie AND one wore sweatpants with a nike hat and white t shirt.

    Ive also noticed that a lot of blacks dont understand the concept of a credit score. They try to give me a disclaimer before I run their credit and they ask if I can take things off of their credit score (soooooo dumb!) Having bad credit will leave you broke since you have to pay more to compensate for your bad credit.

    Im black. So Im not trying to be mean or generalize these a just a couple of things Ive noticed about the black community that I think hold us back.

    • ALM247

      I will say to be fair, there are unfortunately people in the African American community who have been victims of identity theft, i.e. A family member used their social security number to open utility bill accounts, etc. when they were children, and said family member did not pay the bills on time or sometimes at all. That’s an entirely different post, though.

      Then there are other people who need financial literacy courses.

      On the flip side, there are African Americans who have good credit who are taken out of consideration before they can even make a good go at a job, because some recruiters believe the lie that all African Americans have bad credit.

  • Anthony

    Hold on to your land and houses!

  • D1Mind

    And we are supposed to believe this just started right?

    But I wouldn’t know this from all the fancy cars and clothes I see in my neighborhood… You can’t spend your way to wealth. Savings, investments and tangible assets produce wealth. Too many of us spend every dime trying to keep up and look rich while actually being broke.

    But bottom line, who owns the banks of all sizes, the industries of all sizes and most other capital generating institutions in this country?

    As long as black folks and latinos are simply the labor and employee class this will always be the case. Not to mention the historical basis of oppression and subjugation being an issue of wealth redistribution in the first place.