STOCKS SOAR, BUT MOST BLACK PEOPLE MISSING OUT
NEW YORK — Americans who own stocks are pulling further away from those who don’t, as Wall Street roars back to record heights while much of the economy struggles. And Black households are much more likely to be in that not-asfortunate group that isn’t in the stock market.
Only 33.5 percent of Black households owned stocks in 2019, according to data released recently by the Federal Reserve. Among white households, the ownership rate is nearly 61 percent. Hispanic and other minority households also are less likely than white families to own stock.
Many reasons are behind the split. Experts say chief among them is a longstanding preference by many Black investors for safer places to put their money — the legacy, some say, of decades of discrimination and fear. Also, many were never taught what they were missing out on.
“We didn’t have a grandfather or aunt or uncle or mom and dad educating us on the markets because they didn’t benefit from it because of historical discrimination in this country,” said John Rogers, founder and co-CEO of Ariel Investments.
Black people have also often lacked the opportunity to build up wealth, park it in the market and watch it grow over time. In general, they have lower incomes, which leaves less money to invest after paying bills. Many also work jobs that don’t offer retirement plans like a 401(k).
But researchers say that even wealthier Black households are much less likely to own stocks than their white counterparts. That means they missed out on the roughly 260 percent returns for S&P 500 funds over the last decade and the resulting chance to see their wealth grow.
The typical Black family has less than $13 in wealth for every $100 held by the typical white family. Lower rates of stock ownership are a small reason why. The most important factor may be the restricted access Black borrowers had to mortgages and affordable housing through decades of redlining and other discriminatory practices, said Raphael Bostic, president of the Federal Reserve Bank of Atlanta, in a recent speech.
Researchers say increased investment by racial minorities in the stock market, carried through future generations, could help narrow the wealth gap. Toward that end, industry groups are trying to encourage more Black people to become financial planners, who could then draw in potential investors.
The differences in stock ownership between white and Black households go back decades, and they narrowed a bit between 2016 and 2019, the most recent data available from the Federal Reserve. But researchers say the coronavirus pandemic and resulting recession probably widened the gap again.
Instead of stocks, wealthier Black households are more likely to own assets that have a reputation for being safer, such as bonds, life insurance or real estate, said Tatjana Meschede, associate director at Brandeis University’s Institute on Assets and Social Policy.
Black people “are shortchanging themselves by investing in more secure opportunities that yield less of a return,” she said.
The largest bond fund has returned less than 40 percent over the last decade, for example. That’s far below the nearly 257 percent that the largest stock fund has delivered over the same time. Real estate has also had slower gains.
year from other leagues that postponed the start or completion of their seasons. The previous two SNF games coincided, for instance, with the NBA finals, which are traditionally played in June. Last Sunday’s game also coincided with Game 1 of Major League Baseball’s American League Championship Series.
Playing the games in front of largely empty stadiums probably has not helped its ratings either, according to some experts.
“The NFL relies on packed stadiums to give their games a sense of moment and importance,” said Daniel Durbin, director of the University of Southern California’s Institute of Sports, Media and Society. “Empty stadiums simply reinforce the notion that NFL football games might not be the “must-see tv” they once were.”
Widespread changes
Other marquee events including the NBA Finals, Stanley Cup Finals, U.S. Open golf and tennis tournaments have also grappled with declining viewership in recent weeks amid the unprecedented congestion on the sports calendar in recent weeks.
NBC’s coverage of the rescheduled Kentucky Derby was watched by an average of 8.4 million — about half as much as the total for last year’s race. The 146th Derby was postponed from the event’s traditional running on the first Saturday of May, ending up in a busy weekend that also featured action in the NBA playoffs, Major League baseball, college football and golf’s Tour Championship.
In addition, sports are competing for viewers’ attention with a relentless news cycle dominated by the pandemic, social unrest and the final stages of campaigning before the Nov. 3 election.
At the same time, some fans might have fallen out of the habit of appointment TV viewing when the leagues were delayed or suspended. In the first half of the year, Netflix added about 5 million home subscriptions, raising its total to about 73 million.
“The NFL has long relied on the ‘water cooler’ necessity of watching their product — the desire by fans to not be left out Monday and Tuesday mornings when their friends are talking about the big NFL games of the weekend,” Durbin said. “That necessity has largely dried up and the NFL can no longer rely on social pressure to keep audi
ences flocking to their televised games.”
Meanwhile, many restaurants and bars that show sports are either operating on reduced schedules or remain closed.
“We have definitely seen a decrease in sports viewing,” said Dani Corbett, general manager of Tigin Irish Pub on Bedford Street in downtown Stamford. “A factor for us with (soccer’s) English Premier League and the NFL may be that we are not open on Mondays or Tuesdays yet. We also don’t stay open late. Any late games we would not be able to show to completion, and therefore patrons are likely to go elsewhere.”
Still, SNF is unlikely to soon relinquish its No. 1 position during its 12 remaining games of the 2020 regular season. It has ranked as the top primetime TV show for a record nine-straight years.
“To say that having almost 16 million viewers was disappointing is only true in the context of Sunday Night Football’s historically mighty performances,” Shuart said. “But producers may need to come to realize that the pandemic has truly altered how many people spend their free time.”