It’s no secret that America’s wealthiest have been gaining more wealth at the expense of the middle class. However, the trend appears more apparent when the racial aspects are considered. Based on a recent report from the Institute for Policy Studies, the combined wealth of those on the Forbes 400 list of America’s richest dwarfs that of the nation’s entire Latino or black populations.
Based on the report, the 100 wealthiest US citizens are in control of nearly as much wealth as all of the nation’s 42 million African Americans. The total wealth of the nation’s 55 million Latinos measures up to that of the 186 richest people in America.
This can be partly explained by the swift deterioration of the Latino and Black middle classes. African Americans’ net worth in relation to that of whites has plunged by greater than half since the year 2000: The net assets of the average white family today amounts to $141,900 compared to $11,000 for Black families…about the same amount as it was during 1985. There are similar declines for Latinos in net worth in relation to whites.
There are a few reasons that these numbers are as they are: Latino and Black families were disproportionately victims to risky subprime mortgages, more susceptible to job and wage cuts and had less inherited wealth during the Great Recession. These families likely don’t own the stocks and homes like white families do and haven’t gained many benefits from the subsequent recovery.
America’s problem of inequality is apparent in the Forbes 400. Latinos and Blacks generate a combined 29 percent of the population but make up less than 2 percent of the Forbes list. Investor Robert Smith and Oprah Winfrey are the only African Americans that made the list, and only five on the list come from Latino backgrounds.
The demise of Latino and Black billionaires in the U.S. defies simple explanations, but one large factor could possibly be Silicon Valley. The tech sector has seasoned more billionaires in recent times than any other areas of the economy.
It also presents problems of diversity. Based on census data, the number of Hispanic tech workers in Silicon Valley actually dropped from 5 percent in 2000 to a mere 4 percent in 2010 and the number of black techies decreased from 3 percent to 2 percent. It may be another generation or longer before it produces a Black Mark Zuckerberg or even a Latino Sergey Brin.