# Why do blacks and hispanics have such low net worths compared with whites? **URL:** \ **Category:** Great Debates\ **Created:** [February 12, 2014, 1:05am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108 "2014-02-12T01:05:38Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![tapu](https://avatars.discourse-cdn.com/v4/letter/t/49beb7/32.png) [@tapu](https://boards.straightdope.com/u/tapu)\ **Post date:** [February 17, 2014, 8:25pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/61 "2014-02-17T20:25:09Z")
Well, you got me interested in reading more of the sources I found and I see that the one I gave above is an opinion piece trying to refute the reasons for Affirmative Action. For a more neutral presentation, see: [http://clinton2.nara.gov/WH/EOP/OP/html/aa/aa04.html](http://clinton2.nara.gov/WH/EOP/OP/html/aa/aa04.html) Since you have to make a jump from Aff Action to the exact topic of this thread, let me just say here that the reasons relating to how Affirmative Action is intended to reach a point where it is no longer needed bear on why there’s a race income gap. Aff Action just hasn’t gotten there quite yet, and the historical factors for it still influence the picture today. ---
**Author:** ![Doyle](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doyle/32/439_2.png) [@Doyle](https://boards.straightdope.com/u/Doyle)\ **Post date:** [February 17, 2014, 9:28pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/62 "2014-02-17T21:28:40Z")
Are all the white multi-billionaires included in this survey? Seems that might skew the numbers. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [February 18, 2014, 1:21am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/63 "2014-02-18T01:21:24Z")
> [@Doyle](#): > > Are all the white multi-billionaires included in this survey? Seems that might skew the numbers. The study is of median numbers so billionaires don’t skew the figures. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 18, 2014, 1:24am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/64 "2014-02-18T01:24:44Z")
> [@monstro](#): > > The GI Bill was [Affirmative Action](http://www.nytimes.com/2005/08/28/books/review/28KOTZL.html?pagewanted=all) for white people: > > I’m gonna say it again, just for emphasis: With a history like this, it should be no shock at all that black people do not have the same amount of wealth that white people have. It’s actually crazy that anyone would not know why this is the case since the causes of the disparity happened within living memory. It’s like wondering why the guy you saw hit by a car is still walking with a limp a couple of days later. You mean we don’t all get to pretend that the playing field is level just because we personally haven’t burned a cross on anyone’s lawn? ---
**Author:** ![jayjay](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jayjay/32/6765_2.png) [@jayjay](https://boards.straightdope.com/u/jayjay)\ **Post date:** [February 18, 2014, 2:00am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/65 "2014-02-18T02:00:51Z")
> [@Damuri\_Ajashi](#): > > You mean we don’t all get to pretend that the playing field is level just because we personally haven’t burned a cross on anyone’s lawn? “If your ancestors cut down all the trees, it’s not your fault, but you still don’t live in a forest.” - Pam Oliver ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 18, 2014, 3:19am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/66 "2014-02-18T03:19:50Z")
Another potential factor for the fact that even controlling for income and education Blacks tend to invest less … a higher income Black couple is statistically more likely to have extended family that is not doing as well rather than to be from an extended family all of whom were given the opportunities of higher education and job advancements. I don’t think I am out of bounds to state that culturally helping out extended family is a cultural value strong in many portions of Black American society and after helping extended family that needs help there is a bit less to put away in the retirement funds. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 18, 2014, 3:37am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/67 "2014-02-18T03:37:49Z")
One more factor - Blacks despite statistically being lower income than Whites, [give to charity more](http://www.reuters.com/article/2012/02/23/us-usa-blacks-donors-idUSTRE81M1WI20120223). > [@](#): > > African American donors give away higher percentages of their incomes than white donors, according to a new study. … Each year, black donors give away 25 percent more of their incomes than white donors … Nearly two-thirds of black households make charitable donations, worth a total of about $11 billion a year, the report said. > > The report cites black churches as a historically important repository of giving, but notes that other important causes are coming to the fore. … ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [February 18, 2014, 3:44am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/68 "2014-02-18T03:44:30Z")
> [@Shalmanese](#): > > The study is of median numbers so billionaires don’t skew the figures. Yes they do, they shuffle the median up if they aren’t removed from the data before calculating it. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 18, 2014, 4:11am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/69 "2014-02-18T04:11:28Z")
Total billionaires in the United States is[442](http://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_US_dollar_billionaires). I doubt their numbers are shuffling up the surveys too much :rolleyes: ---
**Author:** ![Chen019](https://avatars.discourse-cdn.com/v4/letter/c/f19dbf/32.png) [@Chen019](https://boards.straightdope.com/u/Chen019)\ **Post date:** [February 23, 2014, 7:59am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/70 "2014-02-23T07:59:41Z")
> [@Shalmanese](#): > > What are the causes for net worth being so much lower for black and hispanic minorities compared to whites? In terms of the b-w intergenerational income mobility this is largely explained by cognitive skills in adolescence. Hispanic test scores also lag whites and Asians, so that explanation also applies for that disparity too? _[A Nonparametric Analysis of Black-White Differences in Intergenerational Income Mobility in the United States](http://onlinelibrary.wiley.com/doi/10.3982/QE69/pdf)_ D Bhattacharya & B Mazumder Quantitative Economics 2 (2011), 335-379. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [February 23, 2014, 8:04am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/71 "2014-02-23T08:04:10Z")
> [@DSeid](#): > > Total billionaires in the United States is[442](http://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_US_dollar_billionaires). I doubt their numbers are shuffling up the surveys too much :rolleyes: They still do :rolleyes: back at cha. If you want to consider them aberrant and take them out, do, but so long as they’re kept in the data’s median, mean and mode will be different than with them in. ---
**Author:** ![Ibn\_Warraq](https://avatars.discourse-cdn.com/v4/letter/i/e19b73/32.png) [@Ibn\_Warraq](https://boards.straightdope.com/u/Ibn_Warraq)\ **Post date:** [February 23, 2014, 8:08am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/72 "2014-02-23T08:08:55Z")
> [@Chen019](#): > > In terms of the b-w intergenerational income mobility this is largely explained by cognitive skills in adolescence. Hispanic test scores also lag whites and Asians, so that explanation also applies for that disparity too? > > _[A Nonparametric Analysis of Black-White Differences in Intergenerational Income Mobility in the United States](http://onlinelibrary.wiley.com/doi/10.3982/QE69/pdf)_ D Bhattacharya & B Mazumder Quantitative Economics 2 (2011), 335-379. Ah, I was wondering when we’d have some scientific racists peddling pseudo-scientific crap. Considering how many “Hispanics” are “white”, this post is especially silly. ---
**Author:** ![Chen019](https://avatars.discourse-cdn.com/v4/letter/c/f19dbf/32.png) [@Chen019](https://boards.straightdope.com/u/Chen019)\ **Post date:** [February 23, 2014, 8:24am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/73 "2014-02-23T08:24:48Z")
> [@Ibn\_Warraq](#): > > Ah, I was wondering when we’d have some scientific racists peddling pseudo-scientific crap. > > Considering how many “Hispanics” are “white”, this post is especially silly. If [Debopam Bhattacharya](http://ideas.repec.org/e/pbh33.html) & [Bhashkar Mazumder](https://www.chicagofed.org/webpages/people/mazumder_bhashkar.cfm)are right and cognitive skills in adolescence explain a large portion of the discrepancy in intergenerational income mobility, then it doesn’t matter whether Hispanics are white or not. You can look at their [academic outcomes](http://commons.wikimedia.org/wiki/File:1995-SAT-vs-Income-Education.png) - they lag Europeans and Asians by quite a way, even controlling for parental income and education. ---
**Author:** ![even\_sven](https://avatars.discourse-cdn.com/v4/letter/e/dfb087/32.png) [@even\_sven](https://boards.straightdope.com/u/even_sven)\ **Post date:** [February 23, 2014, 8:39am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/74 "2014-02-23T08:39:10Z")
Well, that took a while. Shame the thread is over, though. ---
**Author:** ![Chen019](https://avatars.discourse-cdn.com/v4/letter/c/f19dbf/32.png) [@Chen019](https://boards.straightdope.com/u/Chen019)\ **Post date:** [February 23, 2014, 9:21am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/75 "2014-02-23T09:21:07Z")
> [@even\_sven](#): > > Well, that took a while. Shame the thread is over, though. Apologies for providing empirical data from an academic paper by economists from Oxford University and Chicago Federal Reserve Bank respectively. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [February 23, 2014, 4:15pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/76 "2014-02-23T16:15:34Z")
> [@Ibn\_Warraq](#): > > Ah, I was wondering when we’d have some scientific racists peddling pseudo-scientific crap. > > Considering how many “Hispanics” are “white”, this post is especially silly. > [@even\_sven](#): > > Well, that took a while. Shame the thread is over, though. Incidentally, as usual, the pseudo-scientific crap depends on missing the point of the paper they claim supports that crap, in the paper he cites the authors report that access to health care and better early environment and support show the potential for policy to address the sharp black–white differences in upward mobility highlighted in their paper, point being that economical and environmental factors are still there. And they point at other research to show that, like this one: > **[Birth cohort and the black-white achievement gap: the role o](https://ideas.repec.org/p/fip/fedhwp/wp-08-20.html)** > > A large literature documents the significant gap in average test scores between blacks and whites, while a related literature finds a substantial narrowing of the gap during the 1980?s, and a stagnati What a surprise, this is example #239 of “race realist” pseudo scientists that cherry pick scientific papers that do not really deal with what they claim. ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [February 23, 2014, 7:47pm UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/77 "2014-02-23T19:47:47Z")
> [@Nava](#): > > They still do :rolleyes: back at cha. If you want to consider them aberrant and take them out, do, but so long as they’re kept in the data’s median, mean and mode will be different than with them in. Given that sample sizes were about 500 each the odds of any of those 442 getting in the survey were pretty low. And given that the mean incomes were 107K for Blacks and 119K for Whites (medians 82K and 94K respectively) it is clear that the rare extreme outliers were not in the sample. ---
**Author:** ![syncrolecyne](https://avatars.discourse-cdn.com/v4/letter/s/f08c70/32.png) [@syncrolecyne](https://boards.straightdope.com/u/syncrolecyne)\ **Post date:** [March 5, 2014, 6:31am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/78 "2014-03-05T06:31:11Z")
George Sanchez has a book, “Becoming Mexican American” that helps explain at least some of this. In his book, he finds that many Mexican Americans in East Los Angeles in early twentieth century L.A. owned their own homes - rather than rent like many urban residents. Many families often built their own homes on tiny plots. Unfortunately, these properties gained little value and were not very marketable, as they were substandard or “improvised” homes in a devalued area, so families did not gain much equity - whereas other parts of Los Angeles saw ordinary orange farmers become millionaires in property booms during the early twentieth century. Residential segregation takes a huge toll. ---
**Author:** ![DataX](https://avatars.discourse-cdn.com/v4/letter/d/e99b99/32.png) [@DataX](https://boards.straightdope.com/u/DataX)\ **Post date:** [March 5, 2014, 7:30am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/79 "2014-03-05T07:30:46Z")
> [@Nava](#): > > They still do :rolleyes: back at cha. If you want to consider them aberrant and take them out, do, but so long as they’re kept in the data’s median, mean and mode will be different than with them in. I don’t think you are using standard definitions of median and mode. Adding billionaires to a survey would simply push the numbers down by the number of people that were interviewed. 1. 10Billion 2. 8Billion … 3. $37,211 4. $37,026 5. $36,982 6. $36,901 7. $36,871 If you had 2 billionaires with 999 people surveyed - removing them wouldn’t change things much - you would move down 2 whopping places in the list. In reality - if the survey is large - it wouldn’t change things at all - as people tend to report in round numbers - and when you get down that far to the median - you will most likely be looking at duplicates. A mode wouldn’t change things at all - no matter how you did it - unless they are reporting people with billion dollar networths - and multiple ones happen to have the exact same networth. ---
**Author:** ![Chuck11](https://avatars.discourse-cdn.com/v4/letter/c/96bed5/32.png) [@Chuck11](https://boards.straightdope.com/u/Chuck11)\ **Post date:** [March 15, 2014, 2:12am UTC](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108/80 "2014-03-15T02:12:04Z")
> [@Chen019](#): > > Apologies for providing empirical data from an academic paper by economists from Oxford University and Chicago Federal Reserve Bank respectively. Obviously, the genotypic g gaps can largely explain the income ones. But the net worth gaps look to be an order of magnitude larger than the income ones. The relation can’t simply be direct. [Previous page](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108.md?page=3) [Next page](https://boards.straightdope.com/t/why-do-blacks-and-hispanics-have-such-low-net-worths-compared-with-whites/681108.md?page=5)