Ways to Close the Nation's Wealth Gap
Charlene Crowell | 3/19/2014, 3 p.m.
Additionally, both employer-sponsored retirement plans and homeownership levels respectively dropped a percentage point from 2010 to 2012. Nationwide in 2012, retirement plans slipped to 44 percent.
For consumers of color, CFED’s report reads much like the familiar financial refrain of earlier research:
Two out of three households of color are liquid asset poor, lacking a financial cushion to respond to financial emergencies; Only 42 percent of consumers of color were homeowners; while White homeownership now stands at 72 percent; and The median net worth for consumers of color amounted to $12,377 – only one-tenth of the median net worth of White consumers – $110,637.
The Center for Responsible Lending (CRL) advocates that homeownership remains the best investment vehicle to help low-wealth families to build wealth and grow into the middle class. Research by the University of North Carolina Center for Capital found that families who received responsible, low-down payment mortgages are successfully repaying their loans and amassed an average $21,000 in home equity even during the financial crisis.
“Without improved policies at all levels of government that help families earn more, save more, and build more assets, the yawning income and wealth inequality gap in the United States will widen, rather than narrow,” CFED concluded. “Inaction consigns millions to persistent financial insecurity, diminishing their economic future and the future of the nation as a whole.”
Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.email@example.com.