Wealth of minority women lower than white counterparts

 Wealth of women: link: http://www.flickr.com/photos/xadrian/4378506719/sizes/m/Single black women in the U.S. have a median wealth — one's assets minus debts —  of $100. In contrast, the median wealth of a single white woman is $41,500, according to the report “Lifting as We Climb: Women of Color, Wealth, and America’s Future.”

Despite the educational and professional gains of single African-American women since slavery, they have only a fraction of a penny for every dollar of wealth owned by single white women.

Oprah Winfrey, the billionaire media mogul, is not the norm in the African-American community, nor is Ursula Burns, the first black woman to head a Fortune 500 company. This year, Winfrey was the only African American on Forbes’ Billionaire List, and Burns, the CEO of Xerox, received a compensation package worth $11.2 million last year.

 In fact, the report,  produced by the Insight Center for Community Economic Development, a national research organization dedicated to building economic health in vulnerable communities, noted that nearly half of all single black and Hispanic women have zero or negative wealth. It also found that half of all single black and Hispanic women cannot afford to take an unpaid sick day or have a major appliance repaired without going into debt.

 “The problem that I am seeing is more about money management than anything,” said Cheryl D. Broussard, an independent financial adviser and author of seven books on finance. “Many [black women] are bringing in a good source of income. But with the money that they do have, they are not managing it right. They are not making building their wealth a priority.”

 Natalie McNeal, author of the personal finance blog, Fruglista.com, agrees.

 "The report shows that we need to make some different decisions on how we spend our money across the board in all areas," said McNeal. "We often think we need to make more money. We don't think in terms of wealth."

“Lifting as We Climb” was issued in March  and examined data from the 2007 Survey of Consumer Finances, which is sponsored by the Federal Reserve Board. One reason for the wealth gap, it noted, was the lack of assets among black women. Though income is how much money a person brings home, the report defines wealth as the total value of one’s assets minus debts. Assets include things such as checking and savings accounts, stocks or bonds, real estate or Wealth-Cheryl Broussard-500: Cheryl Broussardbusinesses owned.

Women of color were less likely to have assets, but when they did, the value was often lower than their white counterparts. For example, more than half of single white women own a home compared with only a third of single black women, who usually own homes in segregated neighborhoods that have less value, according to the report. Black women were also more likely to be victims of predatory lending practices that resulted in subprime home loans.

Women of color also tended to have more debt than white women, and their debt often exceeded their assets. Black women in particular have debt from education loans. The report also found minority women carry large debt from credit cards, which they use to purchase everyday necessities they can’t afford because they work in low-wage, low paying jobs.

And those with high-paying jobs shouldn't depend on those either, said Broussard. She suggests women of color become entrepreneurs or learn how to get additional income.      

 “If you’re not working on becoming an entrepreneur or getting a side hustle, you’re going to be in trouble,” Broussard said.

  McNeal agreed.

"Having one job is just not going to do it," said McNeal. "We have to think of new and creative ways to get extra cash coming in."Wealth-Natalie McNeal: Natalie McNeal

“Lifting as We Climb,” also points to past institutional and structural factors that have contributed to the wealth gap between white women and women of color. For example, past discriminatory federal government policies and practices prevented people of color from building wealth. These policies have had a lasting impact. The report noted: “The historical wealth advantage held by whites is transferred to the next generation as they inherit wealth of previous generations and use that wealth to provide themselves and their children with access to education, capital for entrepreneurship and opportunities to build more wealth.”

But Broussard said black women should stop looking at discriminatory practices as an excuse not to build wealth.

 “There’s racism and sexism, but that will always be there,” Broussard said. “We need to stop looking at that. We need to learn how to manage money and take the time to learn how to build wealth. There are a lot of resources out there.”

In addition to the lack of assets and past discriminatory federal government policies, women of color also have less wealth than their white counterparts because they are more likely to work in service occupations, which often don’t provide what the report calls, “fringe benefits”  such as retirement plans, paid sick days or health insurance. 

 And this wealth gap lasts a lifetime. Women of color older than 65 are more likely to be poor than their white counterparts. For example, the report found that 38.5 percent of black women over the age of 65 who lived alone were poor compared with only 16.7 percent of white women. The lack of income from things such as pensions, Social Security, savings or other assets contribute to this gap. Only 25.4 percent of Black women receive any income from assets during their retirement age compared to 60.4 percent of white women.  In fact, more than 25 percent of black women depend solely on Social Security during their retirement years. Few have anything to pass on to future generations.

McNeal said the report has made people more aware of the importance of wealth and has helped put Black women in the proper mindset for the future.

 "There's room for a lot of growth," said McNeal. "With a few lifestyle changes things can turnaround."

Broussard agreed. She said churches and organizations such as the NAACP  and National Urban League , can play a role in teaching minority communities about money management, investing and entrepreneurship.

 “The bottom line is every single industry is being outsourced. We are becoming a global economy," said Broussard. "We better wake up. We are being more affected by this than anyone.”