December 6, 2023
While the richest households saw gains, according to a new analysis, 24% of Black households “had no wealth or were in debt,” in 2021.
The COVID-19 pandemic era induced an economic crisis that impacted the financial security of many Americans. While the richest households saw gains, according to a new analysis, the poorest Black households remained in the red between 2019 and 2021.
Using data from the U.S. Census Bureau, the Pew Research Center prioritized its report on the stark differences in the wealth of poorer and richer families within and across racial and ethnic groups during the pandemic. Pew defines the wealthiest households as the top 25%, and the poorest households ranking in the bottom 25%.
“The typical American household had a net worth of $128,200 in 2019. By 2021, this had increased 30% to $166,900,” the report discovered.
According to the report, poorer Black households saw their debt fall from $10,100 in 2019 to $4,000 in 2021. Despite these financial gains, the feat revealed just how much Black households fall behind Hispanic and white households. During the same year, about 24% of Black households “had no wealth or were in debt,” compared to 11% of U.S. households overall. The report deemed this rate an improvement from the 29% of Black households who were in the same predicament in 2019.
On the other hand, richer Black households represented 90% of overall group wealth in 2021, which proves greater than other racial and ethnic groups. However, the racial wealth gap remained largely prevalent in the wake of the pandemic.
For instance, white households possessed 13 times as much wealth as Black households in 2019, at the median, and nine times as much in 2021. They also had five times as much wealth as Hispanic households in 2021 and three times as much as multiracial households.
In 2021, lower-income white households had 21 times as much wealth as lower-income Black households at the median. In contrast, middle- and upper-income white households had three times as much wealth as their Black counterparts.
The CARES Act provided for tax credits and stimulus payments, two of several factors that helped families boost their savings and benefit from rising home prices and low mortgage rates. Research showed U.S. households had saved about $2.3 trillion more during 2020 and the first half of 2021 than before the pandemic.
As a result, the “wealth of lower- and middle-income households overall increased at a greater rate than the wealth of upper-income households from 2019 to 2021,” the report found. These rates, though, continue to shine a light on just how much lower-income and poorer Black households continue to face a slow economic recovery.
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