February 12, 2024
Fed Report: White Wealth Grew 30% Faster Than Black Wealth During Pandemic
In 2022, the actual value of both Black and Latinx households dropped to below their pre-pandemic values and stalled there.
Once again, the metrics of the Black/white wealth gap show up as a report from the New York Federal Reserve Bank indicates that the actual wealth of white people outpaced that of Black and Latinx people by 30% and 9%, respectively, from January 2019 to April 2023.
According to a report from Fortune, even though the government offered financial assistance during that period and earnings of Black workers increased by 7.1%, another Fed study indicated that a majority of white households (65%) had stock investments, while a minority of Black (39%) and Latinx households (28%) held stock investments. This indicates that increases in income do not necessarily mean wealth is generated for Black people.
As Janelle Jones, vice president of policy and advocacy at the Washington Center for Equitable Growth, told Fortune, “The study really shows the difference between making gains when it comes to income, and closing that gap, versus when it comes to wealth.”
Jones noted the prevalence of Black financial wealth tied up in pensions among Black people before briefly discussing the inequity of inheritance for Black Americans.
“Black workers are still more likely to be unionized, which may play a part in the pension story,” Jones said. “But how folks are exposed to the ability to invest in the stock market — whether or not it’s something they grow up doing — we know that’s different for white families than for people of color.” Jones also told Fortune that Black family members were less likely to be recipients of an inheritance.
In 2022, the actual value of both Black and Latinx households dropped to below their pre-pandemic values and stalled there; so far, neither group’s actual value has recovered. Treasury Deputy Secretary Wally Adeyemo believes that while some progress has been made, such as rising employment rates, increasing wages, and increases in Black business ownership and participation in the stock market, the government may have to step in with “policy prescriptions” because “the gap between Black and white wealth in America is still too great.”