Over the past few years, individual wealth grew for all Americans. But that doesn’t mean everybody is on level ground. HowMuch.net’s graphic below shows the net worth disparity between racial groups, both with and without a college education.
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HowMuch.net created this graphic using new data from a Federal Reserve analysis of recent trends in consumer financing. Consumers were broken into four groups – white, black, Hispanic, and “other.” The “other” group contains everyone who isn’t white, black, or Hispanic, making it a bit of a minority melting pot.
Effect of Education on Prosperity
As you can see, education clearly impacts an individual’s net worth, but it isn’t the great equalizer that many think. Data shows that race and ethnicity still have major impacts on net worth, whether or not individuals have an education.
Consider this: a bachelor’s degree allows black and “other” Americans to experience a six-fold increase in median net worth. Hispanic wealth increases by four-and-a-half times. White wealth triples.
For minorities, this ends up being between $56,000 and $175,000.
That sounds pretty good, but it’s even better if you’re white. White graduates increase their median net worth by about $300,000 – far more than any other group.
The white advantage is so big that whites without a degree are up to 40% richer than black and Hispanic individuals who do have college degrees!
Is This Racism?
There are several possible reasons for these differences. First, minorities are more likely to be the first in their families to attend college, meaning their family networks are often less rewarding. Another reason could be that poorer students attend less prestigious schools. Of course, systemic racism could also contribute, but this data alone doesn’t prove or disprove that fact.
The bottom line is that college benefits whites more than minorities. To whites, a degree is worth up to $300,000. For blacks and Hispanics, it’s worth only about $60,000. In other words, a black or Hispanic person’s four-year degree doesn’t even pay for itself!
Sadly, this disparity isn’t much of a surprise. As we’ve shown in past visualizations, the American economy is rife with racial inequality. This graphic reveals which states have racial inequality regarding income and home ownership. (Spoiler alert: it’s every state.)
Cause for Hope?
There is some good news for minorities, however. In 2013-16, minority families increased their net worth at a faster rate than white families. The typical white family’s net worth grew by 17%, while a typical minority family’s increased by 30-50%.
Although white individuals still experienced a larger net worth increase in terms of real dollars, the rapid growth of minority wealth could indicate the future financial equality is on the horizon.
We ignored mean data for this graphic because it was so heavily influenced by the ultra-wealthy. Instead, we used the median because it more closely represents a “typical” individual.
The tougher the degree the better the odds of a job and a good job at that…….
And that is why this study is meaningless. Compare the net worth of graduates from equivalent schools with equivalent degrees. Comparing a pharmacy graduate with a psychology graduate is to compare apples to shit.
Pharmacy graduates are no better than street heroin dealers. Pushing poison is pushing poison regardless of whether or not it is sanctioned by our benevolent leaders. Comparing a pharmacy graduate with a psychology graduate is to compare evil to a waste of time and money. There. Fixed it.
“Pharmacy graduates are no better than street heroin dealers.”
Bullshit!! Pharmacy courses are amongst the most difficult and rigorous classes ever. A small sampling …
Pharm101 — How to open those fucken pill bottles
Pharm102 — How to use a butter knife to separate a big pile of pills into a small pile of pills
Pharm103A — Pharmacy math: how to count out one month’s supply of pills.
Pharm103B — Pharmacy advanced math: how to count past 30
Pharm104 — How to type all that shit on teeny tiny labels
Pharm105A — Customer service; making people wait for a fucking half hour without you laughing your ass off
Pharm105B — Customer service; how to say “Come back tomorrow” in 20 languages.
Pharm106 — Building your own platform to be even higher than normal as an intimidation factor
Pharm107 — Elective for non-dotheads. How to talk like a dothead so no one knows what the fuck you are saying.
Well, I could go on, but I trust you now see the bigger picture. I suggest your future posts show some fucken respect for this most noble profession!
Well when you’re black, and have a 85 IQ – education is only going to go so far.
Genetics makes a difference. No matter how much education you give a dog, it will never do calculus.
Odds are that more whites major in STEM courses, while more blacks major in “studies” and less remunerative fields.
An engineering degree from Caltech or MIT will pay more than a liberal arts degree from a minor university. The liberal arts degrees are far less rigorous.
I knew guys in engineering who couldn’t make their grades. Some changed their major to Education and made the Dean’s List for high grades.
Well, yeah, college is supposed to be for INTELLIGENT people which tends to not be black or brown people.
In simplest terms: GIGO
….duh
We need to know if the ratio between science and the arts degrees is more of less the same for Whites, Blacks and Hispanics. Assuming that this is the case and we are comparing apples with apples in terms of bachelor degrees, I would conclude that Blacks and Hispanics were accepted under affirmative action programs and pushed out door with a mediocre bachelor’s degree after taking mostly bird courses. The inescapable FACT is that you cannot turn Whites into Blacks, or Blacks into Whites, over a four-year bachelor’s program or even over the 200 to 300 years since Blacks were brought to the US to work on plantations. These fundamental genetic differences, including an average Black IQ at least one standard deviation less than that of Whites, evolved over more than 50,000 years since the great migration out of Africa and are the products of accelerated evolution in a very harsh and cold landscape during Pleistocene glaciation when most of northern Europe was covered by ice sheets that retreated from the continent about 11,000 years ago. BTW, the Holocene warming (9000 BC to today) is one of 33 interglacial warm periods since the beginning of Pleistocene continental glaciation 1.8 million years ago. This means that we are probably still in a glacial period and the ice sheets will sometime in the future cover most of Europe and North America.
Don’t tell Dennis Roe. That guy really, really hates people that went to college.
Oh horse shit! This measures net worth, possibly indicating that whites have a higher propensity for future planning based on culture, instead of spending all earnings
I agree. Net worth means nothing unless you exclude inheritance. It also measures a snapshot in time. Right now it is inflated due to ZIRP. Wait until the housing and equities bubbles pop and then let’s look at this shit again.
I think you might be right. My folks had very modest savings but no debt heading into retirement.
When my grandpa died, suddenly my folks got $400k richer.
Z hits the nail on the head. Comparing the white cohort, which stated far richer, to the others, distorts everything. Gotta allow for that distortion, and subtract inheritance and any growth it has achieved, subtract the cost of student loans ( add back the cost, actually), etc.
There is zero doubt that minorities or underprivileged use education to lift themselves up. I personally am exhibit A.
Good job, Z.
When I was 24 married and buying my first house , the black guy I worked with bought a new 78 thunderbird loaded and still lived at home . At 26 I sold my first home and built a nicer modest home and settled in my black counterpart bought another new “BIG RIDE” while I maintained 2 modest vehicles ! I am retired now having saved , invested and was careful to not live to the max line of income potential . I now relax in my hot tub in the mornings with coffee and my old counter part is still trying to make rent and car payment ??? Must be racism !
Big Ride = Status in a certain context. Not needing status is its own kind of status, like capitalist bosses (once upon a time) not carrying cell phones, or the Queen not carrying pocket money.
Would be interesting to see the “white” category broken down by religion.
A wealth comparison by race and education along doesn’t give a true picture, age and years of experience and investments need to be factored in as well.
i.e., comparing a 60 year old white with an engineering degree and 40 years work and investing experience with a 27 year old Black with a degree in social work, 2 years experience and no accumulated investments is not an apples to apples comparison.
That makes a “wealth” comparison very difficult to make accurately if the only thing considered is years of education and net worth.