|
Minorities Have Trouble Staying in Middle Class
By Brad Finkelstein
NEW YORK-A study conducted by Demos and the Institute for Assets and Social Policy at Brandeis University shows that one in four African-American and fewer than one in five Latino middle-class families in America are financially secure.
The report, "Economic (In)Security: The Experience of the African American and Latino Middle Classes," measures the financial security of the middle class by rating household stability across five core economic factors: assets, educational achievement, housing costs, budget and healthcare. Based on how a family ranked in each of these factors, they were defined as financially "secure," "borderline" or "at risk."
"Financial health eludes the majority of African-American and Latino middle class," said Thomas M. Shapiro, director of IASP and one of the co-authors of the report. "Tremendous middle-class gains earned in schools, achieved on the job, and seen in paychecks are eroded by lack of assets, which seriously undermines the financial security of African-American and Latino middle class families."
Among the findings:
• African-American and Latino families have more difficulty moving into the middle class, and families that do enter the middle class are less secure and at higher risk than the middle class as a whole.
• Only 26% of African-American middle-class families have the combination of assets, education, sufficient income, and health insurance to ensure middle-class financial security. One in three are at high risk of falling out of the middle class.
• Fewer than one in five Latino families (18%) are securely in the middle class. More than twice as many Latino families, 41%, are in danger of slipping out of the middle class.
• About 95% of African-American and 87% of Latino middle-class families do not have enough net assets to meet three-quarters of their essential living expenses for even three months if their source of income were to disappear.
• Only 26% of African-American and 37% of Latino middle-class families spend less than 20 percent of their after-tax income on housing - both are below the national average of 40%.
"African-American and Latino families, even those who have made it into the middle class, still face very serious barriers to financial security," said Jennifer Wheary, Senior Fellow at Demos and report co-author.
"Strengthening the middle class was a theme early in the election cycle. While both candidates seem to have forgotten about the topic, building a strong and inclusive middle class is more important than ever.
"Given the forecasts for population growth, candidates who say they are trying to build a better future for America cannot continue to ignore the great disparities, especially in key areas such as assets and housing costs that make the African-American and Latino middle classes financially weaker and less stable than their white counterparts."
More emerging market news
| 
