(FinalCall.com) – While the success of Black women is often touted as a sign of progress in America, a recent report reveals Black, Latino and Native American women face an enormous wealth gap when compared to the rest of society, undermining their future economic security and the nation’s long-term prosperity, according to researchers.
Single Black and Latino women are particularly hard hit, owning only a penny of wealth for every dollar owned by their male counterparts and a fraction of a penny for every dollar owned by single White women.
“Because gender and racial economic disparities have been studied separately, we have failed to recognize the daunting economic reality faced by women of color who experience the compounding negative economic effects of being both a woman and a person of color,” says former Harvard associate professor Mariko Chang, who co-authored “Lifting as We Climb: Women of Color, Wealth and America’s Future.”
The Insight Center for Community Economic Development issued the report March 10.
The report used data from the 2007 Survey of Consumer Finances, a national survey done every three years and sponsored by the Federal Reserve Board.
Single Black and Hispanic women have a median wealth of $100 and $120 respectively; the median for single White women is $41,500.
Wealth, or net worth, refers to the total value of one’s assets minus debts. Without savings or wealth of some form, the report concludes that economic stability is built on a house of cards that quickly crumbles when income is cut or disrupted through job loss, reduced hours or pay, or if the family suffers an unexpected health emergency.
Nearly half of all single Black and Hispanic women have zero or negative wealth, the latter of which occurs when debts exceed assets.
About one-third of single Hispanic women and one-fourth of single Black women have no checking or savings account.
The facts are just as bleak for Native American women. On reservations where unemployment rates can be as high as 70 percent, these women are hard pressed to fulfill “job search” requirements to qualify for the Temporary Assistance for Needy Families program.
While 57 percent of single White women own homes, only 33 percent of single Black women and 28 percent of single Hispanic women are homeowners.
“I completely understand how this could happen,” Attorney Latreska D. McLawhorn told The Final Call. “As a graduate of Spelman College I know women who have excellent jobs and are nationally recognized but their financial lives are a wreck. They can’t even buy a home. Financial literacy is not pushed and we graduate with enormous debt. People aren’t given the tools to manage their finances.”
“We’ll purchase the shoes and the bags but without an eye on the long term goal. There aren’t a lot of resources to support us like how to hire a financial advisor. We learn the hard way. I missed out on an investment opportunity that I could afford because I just didn’t know what to do.”
Only 1 percent of single Hispanic women and 4 percent of single Black women own business assets compared to 8 percent of single White women. Black women on average are also paid less than White females.
While 66 percent of White men and 60.4 percent of White women receive retirement income from assets, the same is true for only 40 percent of Asian women, 25.4 percent of Black women and 23 percent of Hispanic women.
Structural inequities are the primary cause of the gap for women of color whose earnings are not converted to wealth as quickly because they are not linked with the “wealth escalator” of fringe benefits, favorable tax codes and valuable government benefits, according to the report.
“Assets mean access,” said Dr. Julianne Malveaux, an economist and president of Bennett College, to the media, “If you don’t have assets, there’s a whole wealth of things you don’t have access to like a home to borrow from, it’s a pipeline to send a child to college, a wealth escalator.”
To help close the wealth gap for women of color, the report recommends: Targeting financial resources for education and training of women of color in sectors and occupations with high opportunities for career advancement and instituting a minimum benefit for the Social Security program since elderly women of color disproportionately rely on Social Security as their only source of income.
“Providing women of color with equal opportunities to build wealth is an imperative for our nation’s economic and political future,” the report says. “As the racial demographics of the United States continue to shift and our nation becomes majority minority, letting a large group stagnate financially is not only irresponsible, but detrimental to the nation’s economic prosperity over the long run.”
“Wealth is the money you’re able to accumulate. If you look at the economic realities of African American women obviously the ability to accumulate is constrained before age 50. With most African American children being raised by women, 45 percent of African American households headed by women. These children sometimes are going to college and so on, mothers are investing in their children instead of in their wealth,” said Dr. Malveaux.
“I see it every day as a college president. A young lady whose mom is a single mom literally if she had a 401K, and some government workers do, (she would be) raiding that to make sure her daughter has an opportunity at a future life, if not borrowing and pulling everything to make sure that young person has an opportunity.”
“I may not have a house, a 401K or even a savings account in the bank but my children all went to college and graduated. One’s a doctor, one’s a teacher and two have good government jobs. I invested in them and they are taking care of me now,” said Angie Smith, a mother who was an example of how many sacrifice for the future of their children.
But with few assets, it appears more mothers will also be forced to depend on their children, instead of receiving the full economic benefit of years of hard work.