Racial wealth gap changed little since 2016: Fed Survey

Yahoo Finance's Brian Cheung joins Zack Guzman to break down a recent Federal Reserve survey examining the racial wealth gap in America.

Video Transcript

ZACK GUZMAN: A new survey from the Federal Reserve here shows that the racial wealth gap here in the United States has not changed at all, really, when you think about the numbers here since 2016. And a shocking statistic from that shows a typical white family has about eight times the wealth the typical black family, which is staggering to think about.

But here for more on that is Yahoo Finance's Brian Cheung. And Brian, I mean, I don't even know how to put those numbers in context. So why don't you do it for us?

BRIAN CHEUNG: Well, Zack, that definitely is a good summary right there. The wealth inequality and the gap between the median white family and the median black and Hispanic family has not closed over the last three years. So the Survey of Consumer Finance, which the Fed releases every three years, they just had a new 2019 print, obviously doesn't cover the impacts of the pandemic.

But as of 2019, the picture was that the median white family had a wealth level of 188,200 in dollars. That's substantially larger-- about eight times as large as you've mentioned, Zack, the median black family's wealth of just $24,100.

And what's interesting is that, during that 2016 and 2019 period, there was pretty rapid growth among black and Hispanic wealth-- 33% and 65%, respectively, compared to white families, which grew much slower at 3%. But because the base level of wealth started off at such a low point, it didn't really narrow the gap or have that much of an impact.

So definitely something worth watching as we worry that this COVID-19 pandemic will have a disproportionate impact on those minority households. Definitely something worth watching in the future.

ZACK GUZMAN: Yeah, I mean, we've already talked about how the unemployment rate remains quite different amongst those communities, but as you noted in this latest report here, also looking at some of those other drivers here when you think about home equity and all of that tied to this inequality, as well. But not exactly an optimistic look at-- we are trying to close that gap, but not a lot being done there. But Brian Cheung, I appreciate you bringing us that.