Growth didn’t narrowracial gaps

Black and Hispanic households still well behind in wealth in 2019.

The solid growth WASHINGTON— that the United States enjoyed before the viral pandemic paralyzed the economy this spring failed to reduce racial disparities in Americans’ income and wealth from 2016 through 2019, according to a Federal Reserve report Monday.

Though Black and Hispanic householdsreportedsharpergains inwealth thanwhite households did, those increases weren’t enough to noticeably narrowthe racial gaps. The typicalwhite familypossessedeighttimesthewealth of Black families and five times the wealth of Hispanic families in 2019, the Fed said.

The Fed’s Survey of Consumer Finances, released every three years, analyzed incomes and wealth in 2019. The survey found that income for the typical U.S. family rose 5%, adjusted for inflation, from2016 to2019 to$58,600. That was weaker than the 9% income gain the typical family received from2013 through 2016.

The survey provides a trove of information on family finances in the United States, from the percentage of households that own stock (53%) to the proportion that have a retirement account (50%).

Whilethereportshowsincreases in income andwealth for lower-income and Black families, many economists worry that the pandemic has reversed those gains. Job losses this yearhave been concentrated among lower-income workers in the restaurant, hotel, retail and travel industries. Those workers are disproportionately non-white.

Somemeasures did showa narrowingofincomedisparities. Average income among thewealthiest one-tenth of American families fell 6%, largely because of a steep fall among the richest 1%, Federal Reserve economists said. By contrast, average incomes amongthe bottom 60% of families rose.

Yet average figures can be skewed by huge incomes at the very top. The Fed report noted, for example, that while average incomesforallfamiliesfell3% from 2016 through 2019, excluding the richest 1%, average incomes rose 3.1%. Incomefor the richestAmericans can fluctuate more sharply year to year than income for lower-income earners, Fed economists said, and likely fell because of smaller gains fromstock, bond and property sales.

Economists typically look at median incomes, which reflect the midpoint of all earners, as a way to filter out the extremes. Median income among the poorest one-fifth of Americans rose 3%, while median income for the richest one-tenth increased 6%, the Fed said.