[Marxism] Recession hits Latinos hardest

Louis Proyect lnp3 at panix.com
Tue Jul 26 08:49:32 MDT 2011

NY Times July 26, 2011
Recession Study Finds Hispanics Hit the Hardest

WOODBRIDGE, Va. — Hispanic families accounted for the largest 
single decline in wealth of any ethnic and racial group in the 
country during the recession, according to a study published 
Tuesday by the Pew Foundation.

The study, which used data collected by the Census Bureau, found 
that the median wealth of Hispanic households fell by 66 percent 
from 2005 to 2009. By contrast, the median wealth of whites fell 
by just 16 percent over the same period. African Americans saw 
their wealth drop by 53 percent. Asians also saw a big decline, 
with household wealth dropping 54 percent.

The declines have led to the largest wealth disparities in the 25 
years that the bureau has been collecting the data, according to 
the report.

Median wealth of whites is now 20 times that of black households 
and 18 times that of Hispanic households, double the already 
marked disparities that had prevailed in the decades before the 
recent recession, the study found.

“It’s a very stark reminder of the high share of minorities who 
live at the economic margins of this country,” said Paul Taylor, 
executive vice president of the Pew Research Center and an author 
of the report. “These data really show their economic vulnerability.”

Household wealth, also referred to in the report as net worth, is 
made up of assets, like a house, a car, savings and stocks, minus 
debts, like mortgages, car loans and credit cards. It is tracked 
by the Census Bureau in the Survey of Income and Program 
Participation, a broad sampling of household wealth by race and 

Nearly two-thirds of Hispanics’ median net worth in 2005 came from 
home equity, according to the report, and when the housing market 
collapsed, so did their wealth. Median home equity for Hispanics 
fell by 51 percent in the period of the survey. The drop was 
compounded by the fact that Hispanics tended to live in the places 
that were hit hardest in the recession, like Florida and 
California, the report said.

Armando Moya, a Mexican immigrant from Woodbridge, outside 
Washington, experienced these swings of fortune first-hand. For a 
few happy years, he believed he had avoided his father’s fate of 
scraping by. He bought a house with a backyard and opened a taco 
restaurant with his brothers. His bank account was growing, and he 
took his family on vacations several times a year.

Mr. Moya lives in Prince William County, where the Hispanic 
population more than tripled from 2000 to 2010, according to the 
Migration Policy Institute, with many newcomers working in 
construction trades that were flourishing in the rapidly growing 
suburbs of Washington.

To capitalize on the influx, Mr. Moya, who is now 38 and had been 
working in restaurants since he came to the United States in the 
early 1990s, decided to start his own, and together with his 
brother opened Ricos Tacos Moya in 2005.

In the same year, he bought a house valued at $350,000. His 
monthly payments were more than $2,300, and with hungry workers 
filling his restaurant, he managed.

But when the collapse of the housing market swept like a wave 
through this Northern Virginia county, taking his house, and his 
bank account, and many of his customers along with it, he lost his 
middle-class lifestyle.

“Everything was going down,” he said.

Now he is back where he started, living with his family in a 
rented apartment, and working seven days a week in the taco 
restaurant. His house sold for $135,000 to a couple from Morocco, 
he said.

“My money changed,” he said. “I lost my house.”

The share of Americans with no wealth at all rose sharply during 
the recession. A third of Hispanics had zero or negative net worth 
in 2009, up from 23 percent in 2005. For blacks, the portion rose 
to 35 percent from 29 percent, and for whites, it rose to 15 
percent from 11 percent.

About a quarter of all black and Hispanic households owned nothing 
but a car in 2009. Just 6 percent of whites and 8 percent of 
Asians were in that situation.

Whites were less affected by the crisis, largely because their 
wealth flowed from assets other than housing, like stocks. A third 
of whites owned stocks and mutual funds in 2005, compared with 8 
percent of Hispanics and 9 percent of blacks.

The median value of stocks and mutual funds owned by whites 
dropped by 9 percent from 2005 to 2009. In comparison, the median 
value of holdings for those blacks who held stocks dropped by 71 
percent, most likely because they had to sell when prices were 
low, Mr. Taylor said.

The median wealth of Hispanic and black households is at its 
lowest point since 1984, when the Census Bureau first conducted 
the study, the report said.

Mr. Moya counts himself lucky to still have his restaurant. He has 
to work weekends at a nightclub in Washington to keep up with his 
rent. His life is increasingly resembling his father’s — 
subsisting, without saving — but he has pinned his hopes for a 
better life on his sons, and he has discarded the idea of 
returning to Mexico.

“I want my house back,” he said. “I’m working for my house right now.”

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