Wealth, Income and Race in the United States
Are We A More Equitable Society Than We Were Ten Years Ago?
Edward J. Dodson
[A compilation of statistics prepared by Edward J. Dodson, 1990]
Despite the expenditure of hundreds of billions of dollars over the
last twenty-five years, the incidence of poverty in the United States
is on the rise. By any measure one might care to use, our society is
becoming two-tiered, and the plight of those at the bottom Is
worsening. The problem seems to be beyond the ability of our
institutions even to mitigate, let alone resolve.
All across the nation the problems have a similar pattern. Inner city
neighborhoods are plagued by high unemployment, drug and alcohol abuse
and crime, deteriorating housing stocks, the breakdown of traditional
family life and diminishing public resources. Rural populations, long
dependent on agriculture and single industries, have experienced an
even more decline in economic activity and reduced services. As a
consequence, the migration from rural to metropolitan areas has
Rural families and single men and women have arrived in the cities at
a time when the availability of affordable housing and blue collar
employment opportunities are already in short supply. When combined
with immigration from Mexico and other parts of Latin America, the
rural to metropolitan migration has overwhelmed the strained resources
of state, county and municipal governments, leaving them hard pressed
to deal with what we must recognize is a national problem.
At the same time, social scientists (including a number of prominent
Blacks) now conclude that the long-term result of many government
social welfare programs, in combination with public housing that has
concentrated poor into areas with few employment opportunities or
community services, has condemned many of the poorest in our society
to a life of isolation and dependency.
We should be deeply troubled by the extent of poverty that continues
to plague our society. To be sure, we are a diverse people and our
experiment in pluralism is new to mankind. Government cannot force
individuals of differing values and backgrounds to live as one people:
however, justice demands that our laws secure equality of opportunity
for all and protect us equally. We are not merely being measured by
history; our survival as a society depends on our success in bringing
even the poorest of the poor into the mainstream of our society. As
one social critic writes:
"It Is commonplace that a
society reveals its reverence or contempt for history by the respect
or disregard that it displays for older people. The way we treat our
children tells us something of the future we envision. The
willingness of the nation to relegate so many of these poorly housed
and poorly fed and poorly educated children to the role of outcasts
in a rich society is going to come back to haunt us."
Each year, we are presented with reports by various government and
private groups that use statistics to tell us something about how our
society is changing. A key measurement of the overall economic health
of our nation is that of Gross National Product, or the total value of
all goods and services produced in a year. More meaningful to us as
individuals is whether our purchasing power is increasing or
decreasing. Our personal decisions and obligations to others play an
extremely important role in how much we are able to save, for
instance, or whether we can afford a home, new car or vacation.
Economic statistics are also good benchmarks for evaluating the
degree of equality of opportunity that exists and whether opportunity
is increasing or decreasing. Most revealing are statistics on
individual and household income and wealth ownership.
What follows are some of the key statistical measurements of how well
various groups in our society are doing. In looking at this
information, a word of caution is necessary. Much of this data is
obtained from the U.S. census, the results of which are always in
dispute, as well as other limited studies performed by research
organizations. Each of us must reach our own conclusions about what
these numbers say to us.
The total population of the United States Is now around 245 million.
Nearly half reside in just 37 metropolitan areas with populations of a
million or more. The nation's rural population has fallen as a
percentage of the total, yet is 66.2 million today versus 54 million
in 1950. Only 1.9% of our total population actually live on farms
(97.4% are White; 1.8% are Black; and, 2.9% are Hispanic). Broken down
by very general racial/ethnic groupings, our nation looks as follows:
The racial make-up of our society is changing. Birthrates for
non-White groups are generally higher, and as our population ages the
non-White portion of the work force will grow considerably. By the
year 2020, for example, Blacks will account for 1 out of 6 working age
Blacks remained concentrated in the South, and for the first time
this century the Black population in the South has increased. 56% of
all Blacks now live in the South, compared with 52% in 1980.17% live
in the Northeast, 19% in the Midwest, and 9% in the West.
There were an estimated 80.7 million households in the U.S. at the
beginning of 1980. Of these, 33 million were families with Children.
By 1989 this number increased to 92.8 million, although the rate of
increase was less than in the 1970s when the majority of baby boomers
One reason for the increase In households is the lower number of
persons per household. In 1970, the average family household contained
3.58 persons; in 1988, this had fallen to 3.17 persons. For all
households the drop was from 3.14 down to 2.64 persons.
Nearly 75% of all women ages 25-54 are now in the work force. This
compares to only 49% as recently as 1969.
During the 1980s, 960,000 moderately high paying blue collar jobs
were eliminated. A total of 18.8 million new jobs were created;
however, fully 77% of these jobs were in retail trade and services,
the two lowest paying industries. As a result, the real median income
for those most affected-individuals aged 25-34 (and who have only a
high school education) -- fell 5%, to $20,400.
For less experienced people in the 20-24 age group, income fell by
12%, to $13,1000.
There has been much discussion about whether the policies of the
Reagan years resulted in a greater concentration of income among those
at the top. The increase in the number of individuals reporting
incomes above $100,000 between 1982-1988 is as follows:
|$1 million or more
|$500,000 - $999,000
|$200,000 - $499,000
|$100,000 - $199,999
Between 1977 and 1990 the income received by the top 1% of all
households combined increased from 7.3% to 12.6% of the total.
The median income of households living in their own homes is
considerably higher than for those who rent. This is true for people
of all races. A comparison based on 1989 statistics Is shown below.
The median household income in 1987 for all Americans was $30,850.
Adjusted for inflation this represented a 1 % increase over 1986.
The total income received by all Americans in 1990 was $3.65
trillion. Based on population only, Blacks could be expected to
receive 12.5%, or $456 billion of the total. in fact, Blacks received
only 7.1%, as shown below:
Money Income, By Race: 1990
Household income is also strongly tied to the type of family that
makes up a household. In all cases, the median figures are highest for
households where there are two parents (although this statistic
includes a significant number of cases where only one spouse is
|Household Headed By
Among Blacks, the number of two-income families increased by 300,000
during the 1980s, to 2.4 million (or, one-third of all Black
Only 15 million households (17% of the total) receive income of
$50,000 or more. Even then, in 3 out of 5 instances two or more
incomes within a household are needed to achieve this level. Half of
the income earners in these households are college graduates.
For Whites in the top fifth by income, the median household income is
$82,000. For Blacks, $55,000.
Between 1977-87 and measured after taking inflation into
consideration, the wealthiest 1% of U.S. households increased their
annual income by 74% -- from $174,500 to $303,900. The number of
millionaires doubled during this period. At the same time, the incomes
of the poorest 10% of U.S. households fell 10.5% -- to $3,160 from
$3,530. More than 80% of all U.S. households had a net loss of income.
The average household income for Blacks narrowed the gap against
Whites during the 1980s but is still only 57% of that received by
For young families real median income in the period 1973-86 decreased
more than for any other group. By race the decrease for Blacks was
The U.S. is both an upwardly and downwardly mobile society. Many
people fall into and rise out of poverty several times during their
lifetime. In fact, in any given 10-year period, one-third of Americans
experience a 50% drop in standard of living.
|Distribution of Income
|top 1% of Pop.
85% of Americans in the top fifth are married couples living
together, versus only 15% of those In the bottom fifth.
The total net worth of all U.S. households today is roughly $8.4
trillion. The wealthiest 3% of the population holds 27% of this total,
or $2.27 trillion.
The U.S. has 62 individuals who earn more than $1 billion each year,
and 37 additional households have a net worth of over $1 billion.
The richest 1% of the U.S. population (2.45 million) receive an
after-tax income equal to that received by the bottom 40% (98
million). Those in the bottom 20% by income hold only 7% of all net
worth. Broken down by category of wealth, the top 1% hold the
following percentages of all net worth held (1983):
|Stocks and Bonds
|Real Estate (other than primary home)
In 1983, 8 million households had a net worth of $250,000 or more,
while the median net worth for all households was $32,700. One
household in a thousand, 70,000 households, had a net worth of $10
million or more.
Median Net Worth - 1984
|Equity in Home
|Stocks, bonds, etc.
Despite the rise In housing values between 1986-88, the median net
worth for both White and Black households fell because of Increased
indebtedness. For Whites this was $43,300; for Blacks, $4,200. When
only married couples are considered, however, the figures for both
Whites and Blacks increase, to $62,400 and $17,600, respectively.
Overall, 43% of the net worth of all U.S. households combined is tied
up in home equity. For those who have owned their homes since 1960,
they have experienced an average Increase In value of nearly 1,000%.
The total market value of all residential real estate In 1960 was
estimated to be $373 billion; by 1986 the total value was set at $3.7
Total consumer debt increased from $97.1 billion in 1969 to $716.6
billion in 1989. Household debt, which adds first mortgage loans to
the total, was $3.5 trillion in 1989.
The number of personal bankruptcies has also continued to climb
during the 1980s:
Wealth Inherited Between
By the end of this year, property (land, houses, stocks, bonds,
annuities, etc.) worth over $925 billion will be handed down through
inheritance. The 64 million people born during the baby boom
generation of 1946-1959 will inherit wealth worth almost $7 trillion.
Distribution of Inheritance
Households in Poverty
More than 32 million people live in households with incomes below the
official poverty line (based on an income of $11,600 for a family of
four). Yet, 60% of the households in poverty have at least one person
working full or part-time.
The percent of Blacks living In poverty has remained unchanged over
the last 20 years.
Households in Poverty
There are 7.5 million households headed by single mothers in the U.S
and 11.6 million headed by females (a large percentage of whom are
elderly and living alone). This is broken down as follows:
|No. with female heads of household (millions)
|% of total households
|No. with single mothers as heads of household
Who Are The Poor?
Among the households that comprise the bottom fifth of the population
(measured by income), three-fourths are White. Only 11% of the adults
have full-time jobs, and fully 65% are unemployed. Around 54% are
households comprised of only one person. The elderly (42% of whom own
their own homes) make up 40% of the households in the bottom fifth of
the population by income.
In 1959 there were 39.5 million people (23% of the U.S. population)
in poverty. By 1973 this had dropped to its lowest point as measured
by the government; still there were 23 million poor -- 11.5% of the
population. By 1987 the number of poor was back up to 32.5 million, or
13.5% of the population.
Of all the poor in the U.S. today: 66% are White; 30% are Black; 17%
(5.2 million in 1986) are Hispanic; 52% are households headed by
single females; and, 50% of all Black children live in poverty.
Among Hispanics the highest poverty rate is among Puerto Ricans, the
lowest among Cubans; however, the number of Mexicans living in poverty
is increasing faster than any other group because of the large number
of poor and uneducated immigrants.
Rural Versus Urban
There are 57 million people, 23% of the U.S. population, living
outside metropolitan areas. Only 7% of the rural population live on
farms; most live in small towns. Some 9.7 million, or 18.1%, are poor.
Thus, rural poor represent 30% of the nation's poor.
3 out of 4 rural poor are white.
42% of all rural Blacks are poor (11% higher than in cities).
Housing Arrangements for the
|Live with spouse
|Live with relatives
Educational Levels Achieved
Today there is a 30% drop-out rate from high school for the entire
population of teenagers. In areas where schools are racially
segregated the rate is 60%. The fact that 40-60% of inner city kids do
not graduate from high school indicates the degree to which our
schools remain segregated.
Some 30 million people in the U.S. are functionally Illiterate; 5% of
all young adults are illiterate and 20% are semi-Illiterate; 5% of
adults between the ages of 21-25 read at a 4th grade level; and, 20%
of those aged 21-25 read below an 8th grade level.
In 1988, college enrollment for Blacks and Whites age 18 was as
The affect education has on earnings is shown in the average monthly
Income statistics below:
|High school diploma
Homeownership Rates for Married
Couples With Children
Since 1975 some 1.8 million housing units previously affordable to
lower Income households have been lost to gentrification; hundreds of
thousands more are too seriously deteriorated to be lived in.
More than one-fourth of all households cannot find housing that will
not absorb more than one4hird of their gross annual Income. In the
metropolitan areas of Washington, D.C., San Francisco, Boston or Los
Angeles, an Income of $14/hour Is needed to afford a typical (and
reasonably livable) 2-bedroom apartment.
In Massachusetts, Nevada, California and Vermont, over 50% of all
rents do not earn enough for this type of housing.
In Washington, D.C., Maryland and Virginia, some 46% of all rents do
not meet this Income standard.
Approximately 62% of the nation's poor are renters, and 45% of the
poor spend 70% or more of their income on rent. As a consequence,
between 4-14 million households live on the verge of homelessness.
||Income Under $10,000
Of the 3.8 million children born in 1986, 40,000 died before reaching
their first birthday. Overall, the U.S. ranks 20th among the world's
nations If the U.S. is measured based on infant mortality statistics
for Blacks, we would be 28th.
More than 11 million children have no health Insurance at all.
40% of all children In the U.S. have not received basic immunizations
for childhood diseases.
Estimates of the number of homeless are extremely unreliable. The
number ranges from several hundred thousand to upwards of 3-5 million.
Moreover, many people are homeless for short periods of time due to
temporary loss of income. Non-homeowners are far more likely to become
homeless at some period of their lives.
One-third of the homeless suffer from drug and/or alcohol abuse, have
no skiIls, seIf-discipIine or family structure to fall back on.