The recently released report by the Federal Reserve Bank of Boston, “The Color of Wealth in Boston,” doesn’t tell us much that we didn’t already know about the haves and the have-nots in the city. Its findings are borne out on a national level by other reports.
The report is based on a survey of 403 households in the Boston Metropolitan Statistical Area (MSA). Its findings are stark; almost half of Puerto Ricans and a quarter of African Americans do not have bank accounts, compared to 7 percent of white households unbanked. Additionally, for every dollar in liquid assets (excluding cash) held by white households, African Americans have two cents, Caribbean blacks 14 cents, and Puerto Ricans and Dominicans, less than one cent.
On the less-liquid assets such as homes, basic transportation and retirement/health savings, 56 percent of white households in the Boston MSA own retirement or private annuity accounts, while only 21 percent of U.S. and Caribbean blacks have them; only 7.5 percent of Dominicans and 16 percent of Puerto Ricans have them, according to the report. Seventy-nine percent of whites in the report own a home, while only one-third of U.S. African Americans, less than one-fifth of Dominicans and about half of Caribbean blacks are homeowners. And those in communities of color are more likely to have mortgage debt, as well as student loans and medical debt.
Additionally, white households have far more resources that can be turned into cash quickly. And households of color get less return on their home ownership investment, according to a study released earlier this year by Brandeis University.
It’s not for lack of trying in communities of color as much as it is the lack of the basic economic supports that most white households have as a given. For households of color, they’re more likely to be exposed to opportunistic endeavors such as mortgages that profit the originators at the expense of the borrower, or for-profit colleges that issue degrees that bear little or no correlation with the requirements of the current job market, aided and abetted by federal loan programs that were intended to benefit the most vulnerable student populations. These represent what amounts to a Big Lie for those of color who aspire to upward mobility.
None of this is really news and hasn’t been for decades. But as minority households quickly ascend into majority households by Census numbers – and as more candidates of color ascend to federal office in Congress and the Senate – it becomes a larger economic issue that can’t be ignored. The more households that lack the resources to sustain themselves, the bigger the economic drag on the nation as a whole.
We can only hope that state and federal elected officials, from both white and from minority backgrounds, will serve their constituencies responsibly, advocating for them on the most basic economic issues white households have long been able to take for granted. Public policy may be able to stanch the rants and raves of the anti-tax haves by fostering practices that allow more people to achieve economic independence without the need for government subsidies or rapacious, opportunistic private-sector financial instruments masquerading as mortgage and education passports to the middle class. Which they never were.
