Part two in Latoya's series:
Because so many women of color have such little wealth other than the value of a vehicle, the rest of the paper uses the definition of wealth that excludes vehicles in order to capture the economic vulnerability experienced by women of color.
Excluding vehicles, single black women have a median wealth of $100 and Hispanic women $120 respectively, while their same-race male counterparts have $7,900 and $9,730. The median wealth of single white women is $41,500. To put it another way, single black and Hispanic women have one penny of wealth for every dollar of wealth owned by their male counterparts and a tiny fraction of a penny for every dollar of wealth owned by white women. With so little in reserve, half of all single black and Hispanic women could not afford to take an unpaid sick day or to even have a major appliance repaired without going into debt. The precarious financial situation of women of color is also evident when looking at those with zero or negative wealth, (negative wealth occurs when the value of one's assets is lower than the value of their debts). Nearly half of all single black and Hispanic women have zero or negative wealth (see Figure 2).
Pre-retirement wealth disparities for women of color affect them drastically in their retirement years. According to federal poverty standards, poverty rates for people age 65 and over are highest for women of color. In 2007 16.7% of white women living alone were poor, but 26% of Asian women living alone, 38.5% of black women living alone, and 41.1% of Hispanic women living alone were poor. 21
What does it mean when we talk about the difference between wealth and income? These two terms are not to be conflated. Someone can be a high earner, but still have no wealth at all – it is as simple as spending more than you earn. It doesn't matter what the money is spent on – it can go up your nose, on your feet, to your landlord or thrown in mass amounts on a stage. However, if you manage to make a million dollars a year, and you spend $1.5 million, you are not wealthy. Not even close.
This is why this median figure of $5 is so important to understand. At various points in the course of the report, the data for women of color (again, defined as black and Latina, unless otherwise indicated) tends to fall around zero or five dollars, depending on the unit of measurement.
It is also important to understand the difference between a median number and an average number. I emailed report author Mariko Chang to clarify why the median number was generally used in the report:
In wealth research, it is conventional to use the median instead of the average for the following reason: Because wealth is so unequally distributed, with a few people owning extremely large amounts of wealth and the rest owning much smaller amounts, the few very wealthy people pull the average higher. The median, on the other hand is a better indicator of the wealth of the more "typical" case. (If we rank people or households on a continuum from least wealth to most wealth, the median is the point at which half have more wealth and half have less.) Because the median is a better indicator of the more typical case, people and organizations that study wealth report the median (although some report both).
Since today is Friday, we are going to ease up on the data and instead take a moment to reflect: how did you learn your lessons about wealth, income, and money?
Monday: Differences in financial starting points and class mobility
This post was republished from the blog Racialicious, with permission.