Her Wealth Could Be $0 Until She is 50

Via BDBlue at Corrente, comes this unbelievable study of “the wealth gap” and women of color. We have all heard of the income gap – women make, on average, 77 cents to every man’s dollar – but the wealth gap has been largely ignored. I’m so very thankful that this study has come along to shine the light on a very, very important way in which women of color are failing to gain societal equality.

First, let’s explore why the Lifting As We Climb Insight Center posits that wealth is important. All bolding is mine.

The current economic crisis has revealed why wealth is so important to the stability of households. Wealth, or net worth, refers to the total value of one’s assets minus debts. Without savings or wealth of some form, 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. [MB: This is yet another reason for universal health care that is a right - not based on income or employment - as if we needed one!]

As the current crisis continues to unfold, it has become all too clear that it is not just “poor” people who are losing their homes to foreclosure in record numbers; even households with some wealth found that they did not have enough to ride out the still unfolding economic downturn.

Wealth impacts not just current economic security, but retirement security as well. With concerns over the solvency of Social Security and the shrinking number of jobs that provide pensions, it is of increasing importance that people have the means to save for their own retirement.

Wealth is also tied to the well-being of the next generation, as it provides parents with the ability to help pay for their children’s college education, and can also be passed down from generation to generation. In fact, the intergenerational transfer of wealth is one of the reasons why racial wealth gaps from policies long ago have become entrenched.

According to this study, then, a woman’s ability to survive misfortune depends on wealth, not income. There are many reasons why women of color tend to have more difficulties accumulating wealth:

Some may wonder if gender differences in wealth are important since so many people get married and presumably pool resources. But about half of all households are headed by single (defined as never married, widowed, or divorced) persons, which makes the wealth gap between men and women a reality for a large percentage of people. Also, about half of all marriages end in divorce. Furthermore, men and women are marrying at later ages, leaving women with more years in which they are self-supporting. In fact, women now spend more of their adult years single than married. The women’s wealth gap is also central to understanding the racial wealth gap—particularly for black households—because black women are less likely to marry and to remain married. Given the current trends of rates of divorce, the increasing number of children born to unwed parents, and rising ages at first marriage, the wealth gap for women is of considerable significance.

Now, keep in mind that this study was done in 2007, before the housing bubble burst and millions of Adjustable Rate Mortgages (ARMs) came due. There is much evidence that people of color were targeted for these mortgages, and indeed, women were targeted even further within that group. Nonetheless, even with this relatively conservative data, the results for women of color are staggering.

Excluding vehicles, single black women have a median wealth of $100 and Hispanic women $120 respectively, while their same-race male counterparts have $7,900 and $9,730. The median wealth of single white women is $41,500. To put it another way, single black and Hispanic women have one penny of wealth for every dollar of wealth owned by their male counterparts and a tiny fraction of a penny for every dollar of wealth owned by white women.

With so little in reserve, half of all single black and Hispanic women could not afford to take an unpaid sick day or to even have a major appliance repaired without going into debt.

The precarious financial situation of women of color is also evident when looking at those with zero or negative wealth, (negative wealth occurs when the value of one’s assets is lower than the value of their debts). Nearly half of all single black and Hispanic women have zero or negative wealth (see Figure 2).

Never-married women of color experience the largest wealth disadvantage, with a median wealth of zero (see Table 1). Women of color who are divorced fare better, with a median wealth of $4,200, but this is still only 26% of the wealth of divorced men of color, 8% of the wealth of divorced white women, and 5% of the wealth of divorced white men.

Young women ages 18-35, whether white or non-white, are beginning their adult years with a median wealth of zero, meaning that at least half of women in this age group had no wealth or had debts greater than the value of their assets (see Table 3). However, while white women in the prime working years of ages 36-49 have a median wealth of $42,600 (still only 61% of their white male counterparts), the median wealth for women of color is only $5. Prior to age 50, women of color have virtually no wealth.

Okay, let me repeat that.

However, while white women in the prime working years of ages 36-49 have a median wealth of $42,600 (still only 61% of their white male counterparts), the median wealth for women of color is only $5. Prior to age 50, women of color have virtually no wealth.

In other words, if you are a Black or Hispanic woman, your chance of getting and keeping any significant economic security prior to the age of 50 is extremely small.  A white woman has a huge advantage over a woman of color, but still lags behind white men by 39%.

While so many of us, myself included, have been talking about equal pay for equal work and the 23% income gap, the Insight Center has been paying attention to a much greater and deeper issue: equal wealth. The wealth gap for women of color shows just what a potent combination institutionalized racism and misogyny are; but if you look at the gaps between men of color and women of color, you see that misogyny multiplies racism exponentially.

I hope that this study is propagated widely. Readers, please do what you can to raise awareness about this immense economic and social injustice.

In the meantime, I have added to the Insight Center to our Resources for Women page.

This is a stunned open thread.

(I know the woman in this video is white, but it’s the perfect song for this post. Goddess bless Donna Summer; she knew what she was singing about.)