[Marxism] Recession hits Latinos hardest
lnp3 at panix.com
Tue Jul 26 08:49:32 MDT 2011
NY Times July 26, 2011
Recession Study Finds Hispanics Hit the Hardest
By SABRINA TAVERNISE
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
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
“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,
“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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