Study finds wealth surged during pandemic

(CN) — Although wealth surged during the Covid-19 pandemic, Black and Hispanic families remained saddled by debt, a new study says.

The typical U.S. household saw its wealth increase by 37% between 2019 and 2021, but poorer families likely remained in debt, according to an analysis released Monday by the Pew Research Center.

The center reviewed U.S. Census data for December 2019, 2020 and 2021 to study household wealth. It found that poorer households — those in the bottom 25% — were likely to be in debt before the pandemic and at the end of 2021. Half of those households had a net worth of $500 or less, which was modestly more than December 2019 when half had a net worth of zero or less.

However, households overall gained wealth or at least cut down on their debt during the pandemic regardless of their race. Although poorer Black households remained in debt, the median debt load dropped from $10,100 in 2019 to $4,000 in 2021. Poorer Hispanic families neared financial solvency, with their median debt worth rising to zero dollars in 2021, compared to a debt of $1,100 in 2019.

Brian Marks, an economics professor at the University of New Haven, said many Americans were able to boost their savings by cutting down on expenses during the pandemic. 

Pew’s analysis points out that U.S. households saved about $2.3 trillion in 2020 and the first half of 2021 through closures of restaurants and shops. Meanwhile home prices increased 31% from December 2019 to December 2021 and Marks noted that the value of vehicles also rose, which contributed to a rise in wealth.

Although unemployment spiked at 14.7% in April 2020 as about 25 million people lost their jobs, Marks noted the federal government took several measures to lessen the impact on Americans through stimulus checks, the CARES Act and the Payroll Protection Program.

“The amount of money that went in to support the overall economy really helped big time,” he said. “It really was quite supportive to avoid a complete collapse.”

The study also highlighted continuing wealth inequality nationwide. About one-in-four Black households had no wealth or were in debt in 2021, compared to 11% of households overall.

Racial and ethnic gaps in wealth remained stark during the pandemic, with white households having nine times as much wealth as Black households in 2021. They also had five times as much wealth as Hispanic households and three times as much as multiracial households. Asian households had more household wealth than white households in 2021.

The wealth gap is even wider at lower income levels. The analysis found that lower-income white households had 21 times the median wealth of lower-income Black households. But middle- and upper-income white households only had three times as much wealth as comparable Black households.

Follow @TheNolanStout

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit