Connecticut Has Among Nation's Largest Wealth Gap by Race and Ethnicity

Connecticut has among the nation’s biggest wealth gaps, according to a new analysis comparing various racial groups in states across the country.  The state is ranked as having the 5th largest gap; only the District of Columbia, Wisconsin, Minnesota and Iowa had larger gaps in their populations.

The analysis, by the financial website WalletHub, noted that in the United States “there is racial inequality in many areas, including our wealth.”  The site noted that current trends show that a wide financial gulf continues to divide racial groups in the U.S., with Hispanic and black Americans still at the bottom of the economic ladder. The site pointed out that non-Hispanic white Americans have a median household wealth of $139,300, compared to $12,780 for black households and $19,990 for Hispanic households.

Some key factors driving the racial wealth gap include unequal access to higher education and employment for minorities, the website points out, as well as residential segregation that still persists.  Rounding out the ten states with the most sizable wealth gaps were Massachusetts, North Dakota, Nebraska, Rhode Island, and Utah.

To measure the wealth gap among races in the U.S., WalletHub analyzed the 50 states and the District of Columbia across 21 key metrics. To determine the overall ranking of each state, the analysis used the biggest gap between racial groups for each metric. 

The metrics included median household income gap, homeownership rate gap, unemployment rate gap, poverty rate gap, educational attainment gap, and uninsured rate gap. In Connecticut, the largest wealth gap is in the poverty rate, followed by home ownership and educational attainment and home ownership.

“The gap between the wealth of Blacks and Whites is tremendous, and has been for a long time. Researchers at the Federal Reserve using data from the Survey of Consumer Finances report that in 2019 the median wealth of a White family was about eight times the median wealth of a Black family ($188,200 vs. 24,000),” explained Patricia K. Smith, Professor Emerita of Economics – University of Michigan-Dearborn.

“Wealth provides a buffer against setbacks, allowing families to weather an economic crisis. Wealth provides security, thus reducing stress, she continued. “Well-educated Blacks with good-paying jobs who own homes still hold significantly less wealth than similar Whites. This suggests differences in individual effort and choices cannot fully explain the racial wealth gap. Larger forces are at work.”

Data used to create the rankings were obtained from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics.