Lockport Union-Sun & Journal Online

June 2, 2012

Whites earn more than three-fourths of nation's income

STUDY: Minorities starting to catch up.

By Carol Morello
The Washington Post

WASHINGTON — Whites took home a disproportionate share of income through the recession and slow recovery, but minorities are slowly starting to catch up, a new analysis of census data shows.

According to a study by Sentier Research, a private firm specializing in income statistics, non-Hispanic whites reaped 76 percent of the nation's total wages and other income, even though they were just 64 percent of the population in 2010. The income share is down slightly from the 78 percent made by whites in mid-decade, reflecting the diminishing percentage of the country that is white and not Hispanic.

Asians are the only other group earning a higher share of total income than they represent in the population, about 5 percent.

Hispanics, who are the largest minority group at 16 percent, earn 9 percent of all income, up from about 8 percent in the middle of the decade. And blacks earn 8 percent, only a little higher over the decade, though they make up 13 percent of the nation.

The Sentier study of the American Community Survey income data collected between 2008 and 2010 adds another dimension to the studies of wealth and income made during a period of rapidly shifting demographics and economic uncertainty. Whites are a smaller proportion of the country with every passing year, while the Hispanic and Asian populations grew by double digits over the past decade.

In a report last fall, the Census Bureau said income inequality has increased during the recession, with large losses at the middle and bottom and small declines among the richest households. The Pew Research Center found a widening gap between the wealth accumulated by white households and the assets owned by blacks and Hispanics, who took the biggest hit from the housing bubble bursting and the recession's job losses.

The latest data temper concerns about the recession's long-term impact, particularly on minorities.

"This suggests that the income gap is not exploding the way the wealth gap was," said Roderick Harrison, a Howard University sociologist who once headed the Census Bureau's racial statistics branch. "It's in fact declining with population size, though clearly not as rapidly."

For the time being, the country is broadly divided between the relative prosperity enjoyed by many whites and Asians, and the economic difficulties experienced by many blacks and Hispanics.

Whites and Asians have higher education levels and are more likely to be part of households in which two adults hold well-paying jobs. A sizable number hold advanced degrees in science and technical fields that pay high salaries, while blacks and Hispanics tend to get degrees in the social sciences and humanities.

More than half of white and Asian households consist of married couples; in contrast, one in five black households are headed by single parents, and just 28 percent consist of married couples.

With a median age of 42, whites are more likely to be in their peak earning years than Hispanics, whose median age is 27, or blacks, at 31.

And Hispanics in particular are more apt to be recent immigrants, many of whom work at low-paying jobs.

But those factors do not fully explain the stubborn chasm.

"The big factor is historical," said Austin Nichols, an economist with the Urban Institute. "If you amass wealth in one group, it tends to stay there. The Hispanic population has grown tremendously over 30 years, and new arrivals haven't had time to amass that wealth."

The recession underscored the significance of education. College graduates had significantly lower unemployment rates than people with no more than a high school degree.

"Your social class — where you came from, your education, family wealth, who you're married to and what they do for a living — is much more important than race and ethnicity" as a factor in income, said Timothy Smeeding, a University of Wisconsin at Madison professor who heads the Institute for Research on Poverty and who studies income inequality.

"There are differences of race and ethnicity, and those were exacerbated by the recession. But what really determines your income has more to do with your education and how long you've been somewhere."