Washington, D.C. — Higher incomes among Asian American and Pacific Islanders compared to other communities of color have occasionally lead to the view of Asian Americans as economically more advantaged than other groups, a notion that ignores the high degree of economic inequality of Asian Americans reflected in the data on wealth.
This is among the findings published today by the Center for American Progress in a new report, based on original analysis with exclusively obtained data from the Federal Reserve Board’s triennial Survey of Consumer Finances. In the report, experts Christian E. Weller and Jeffrey P. Thompson look at the wealth gap among Asian Americans and Pacific Islanders living in the United States, finding that wealth inequality among Asian Americans is far greater than the already high wealth inequality among whites.
Additional findings include:
- While Asian American average and median wealth has become comparable to white wealth, wealth inequality among Asian Americans has risen faster than wealth inequality among whites, and Asian Americans owe more debt than whites. As a result, a large portion of Asian Americans is ill-prepared for short-term emergencies and retirement.
- Although Asian Americans have lower homeownership rates than whites, many of the wealth increases for upper-income Asian Americans resulted from housing market booms in large urban areas. While this shows that Asian Americans are wealthy because of the housing boom, it also means that their wealth is often tied to a mortgage, which makes savings particularly vulnerable to house price declines, creating a potentially precarious situation for Asian American families.
- Asian Americans at the bottom of the income distribution have less wealth than whites at the bottom of the income distribution, and Asian Americans have fewer retirement benefits than whites. Most notably, Asian Americans are much less likely than whites to be covered by a defined benefit pension. This difference is not offset by more savings in 401(k)s and Individual Retirement Accounts, or IRAs, for instance, as Asian Americans resemble whites when it comes to these types of retirement accounts.
Asian Americans are not only the fastest growing racial group in the United States, they are also economically one of the most diverse groups, with a substantial share of Asian Americans struggling day to day. While the economic inequality among Asian Americans has long been recognized, the data to support this case are often missing. Because of the large variations within this community, the Center for American Progress has for years now called for the need to collect more nuanced and disaggregated data in order to ensure efficient policy solutions.
“The analysis of the data available for this report suggest that a large share of Asian Americans are in need of effective wealth-building policies,” said Christian E. Weller, Senior Fellow at the Center for American Progress and a co-author of the report. “That could come, for example, in the shape of more efficient policy interventions to boost savings, or more access to retirement savings for workers whose employers do not offer retirement benefits. Whatever it is, we will continue to need more systematic and targeted data collection on Asian Americans, Pacific Islanders, and all the communities represented therein.”
Read the full report, “Wealth Inequality Among Asian Americans Greater Than Among Whites,” here.
For more information or to speak to an expert on this topic, please contact Tanya Arditi at [email protected] or 202-741-6258.