July 26, 2011
The NYT wrote a piece based on a new study from Pew that finds that Hispanic families were the ones hardest hit by the economic downturn. The basis for this assertion is that they experienced the largest percentage decline in median wealth.
This is somewhat misleading. According to the study, the median wealth for Hispanics was just $18,400 prior to the downturn. The collapse of house prices led this to fall to just $6,200 in 2009, a 66 percent decline. However, it is possible to have such a large percentage decline because the median family had so little wealth to begin with. A family with $18,400 in wealth is not in a very different situation than a family with $6,200 in wealth. In both cases, such families are probably looking to a retirement where they are almost entirely dependent on Social Security or other pension programs.
By comparison, the wealth of the median white family fell by almost $32,000 from $135,000 to $113,100. The median Asian family saw their wealth decline by more than $90,000, from $168,100 to $78,100. These declines are likely to have much larger impacts on living standards. The median wealth for African Americans fell from $12,100 to $5,700. This also is a large percentage decline, but one that is likely to have a limited impact on living standards since the initial wealth was already so low.
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