Another Measure of the Staggering Wage Gaps in the United States: Comparing Walton Family Wealth to Typical Households by Race and Ethnicity
Last week, I noted that two recent data releases—the Federal Reserve’s Survey of Consumer Finances and the Forbes 400—painted a stark picture of growing wealth concentration in the U.S. economy. Specifically, I looked at the single largest conglomeration of family financial wealth in the Forbes 400, the combined net worth of the six Walmart heirs, and compared it to that held by typical American families.
If you arrange American families by net worth in ascending order, you would have to aggregate the net worth of the bottom 42.9 percent (52.5 million) of American families to equal the net worth held by the six Waltons. Further, you would need to add together more than 1.7 million American families that all had the median U.S. net worth ($81,200 in 2013) to equal the Walton family holdings.1
In this post, I’ll do the same calculations, but look just at non-white families. It is a stark fact that racial wealth gaps in the U.S. economy are enormous. For example, the median white family had net worth of roughly $142,000 in 2013, while the median net worth of non-white families was just $18,100.
So, arranging non-white families by ascending order of net worth, one would need to aggregate the net worth of the bottom 67.4 percent of non-white families to match the net worth of the Waltons.2 And it would take 7.9 million families that had the median net worth of non-white families to match the Waltons’ wealth.
Using the SCF data, we can make these same calculations regarding Black and Hispanic families in the United States. These should be taken with a large grain of salt, as sample sizes get smaller estimates become less precise. But, caveats aside, one would need to aggregate the net worth of the bottom 79 percent of black families and the bottom 77.8 percent of Hispanic families, respectively, to match the Walton family wealth. And, one would need to take 11.9 million families with the median net worth of Black families and 10.6 million families with the median net worth of Hispanic families to equal the Walton family holdings.
In short, taking account of race and ethnicity in assessing the concentration of American wealth provides a stunning illustration of wealth inequality in the United States and how the very rich compare to large facets of our population.
1. Reminder: median net worth is the net worth of the family in the exact middle of the wealth distribution: they are wealthier than half of all American families and less-wealthy than half.
2. Slightly technical side-note: One needs to remember that this number includes families with negative net worth. Because very large negative net worth values are actually associated disproportionately with white families, this actually makes the number of non-white families needed to add up to the Walton family net worth slightly smaller than one might think at first.