Job applicants at Asian Diversity Career Expo.
The past few years have been good to Asian-American families: they are erasing the financial disparity with white households faster than black and Hispanic families. The Federal Reserve Bank of St. Louis took a look at the Survey of Consumer Finances to tease out the interplay of race and financial health.
Though much of the gains came from a steep drop in white wealth, there’s still an improvement.
By one measure—median household income—Asian families are already besting their white peers. Black and hispanic families haven’t been as fortunate, staying in the same (lower) range since 1989.
The study also examined the way that factors like gender and education affect a household’s finances. They came up with a scorecard based on certain behaviors as measured in the SCF—saving rates, debt owed, credit, etc.—and teased out how much of the racial wealth gap would be erased if everything else were equal.
Wealth—and the financial security that comes with it—builds over the years, and minority households tend to be younger.
Likewise, the heads of white household are better-educated on-average, which also contributes to earning and wealth-building power.